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Annual report and
accounts 2023
i-nexus Global plc
i-nexus, we believe
Welcome to our 2023 Annual Report
transforming
At
Strategy, our customers take control and ensure that every
action, measurement and decision contributes to achieving
organisational goals
that by digitally
Contents
STRATEGIC REPORT
2023 Highlights
Company Overview
Chairman’s Statement
Chief Executive Officer’s Report
Chief Financial Officer’s Report
Principal Risks and Uncertainties
Stakeholder Engagement
CORPORATE GOVERNANCE
Board of Directors
Corporate Governance Statement
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
Note to the Statement of Cash Flows
Notes to the Group Financial Statements
Company Information
01
03
05
07
10
12
19
24
25
30
36
42
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44
45
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48
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i-nexus Global plc
267084 i-nexus AR pp01-pp11.qxp 20/12/2023 12:31 Page 01
2023 Highlights:
Financial Highlights
• Monthly recurring revenue (“MRR”),
the key financial metric for the
Group, grew by 16% in the year to
£289k at 30 September 2023
(30 September 2022: £250k) as the
business delivered a second year of
improved double-digit growth
01
Total MRR (£000)
Net Retention (%)
• Net
in
retention1
the period
improved to 107% (FY22: 98%),
increasing
highlighting both the
strength of our client relationships
and the quality of our product
• Total revenue, 92% of which is recurring, increased by 13% to £3,528k (FY22: £3,127k) as a consequence of the
new business and account expansion successes since the start of 2022
• Adjusted EBITDA2 loss for the period has reduced against prior period levels to £499k (FY22: £552k), with the
increase in revenue being partially netted against the full-year cost impact of the select investments made
towards the end of FY22 considered fundamental to the Group realizing the market opportunity
• Cash and cash in transit3 at the period end improved to £267k (30 September 2022: £99k), with the Group
continuing with its plan of deferring the placement of additional investment until such time that the business
delivers a position of at least Adjusted EBITDA breakeven
• The Group reported a loss before taxation for the year of £982k (FY22: loss of £1,105k)
•
In July 2023, the Company raised £500k by way of Convertible Loan Notes from its supportive shareholder
base, strengthening its cash position for FY24
Strategic progress and operational highlights
• Successfully delivered on the two-year go-to-market objective of achieving back-to-back years of improved
double-digit MRR growth through our land and expand customer strategy
• A key highlight of this strategy was over 70% of new logos signed in the last two years have expanded their use
of the solution by an average value of 66% since onboarding
• Seven new logos secured in the year (2022: nine) delivering £23k MRR (FY22: £30k MRR), with equivalent levels
of expansion opportunity in these accounts through FY24 to customers signed in the last two years
• New customers span several new industries and countries, demonstrating our ability to adapt and cater to
diverse markets. This is testament to our belief that all companies, regardless of their industry or size, can
benefit from a well-executed strategy
• Establishment of a growing partner programme, several agreements signed with consulting firms in the year
resulting in our first new logos secured via the partner route
• The Group continues to explore opportunities for product innovation, with progress in FY23 culminating in the
successful completion of several “proof of concepts” for new products, which are set to be trialled with new
customers during FY24
Consolidated Financial Statements for the year ended 30 September 2023
267084 i-nexus AR pp01-pp11.qxp 20/12/2023 12:31 Page 02
02
2023 Highlights: continued
Outlook
• The Group has developed a new three-year strategy, focusing on enhancing our product suite’s capabilities.
This strategic approach is designed to expedite our customers’ path to real value, allowing them to
prioritise processes over tools
• New businesses successes in the first months of the year include two new customer wins and an expansion
with a key client generating £12k MRR, with a further opportunity moving into the contracting phase
• As previously announced, one significant legacy customer, currently generating MRR of £54k, will not be
renewing its contract with i-nexus from January 2024. The Company has swiftly implemented mitigation
strategies to protect cash flows and minimise the impact on its progression towards an EBITDA breakeven
position
• Business is well positioned to capitalise on the continued rise in interest for a strategy execution software
solution as companies across all industries accelerate the digitization of mission-critical processes in this
post-pandemic era
Throughout this announcement:
1 Net Retention is measured by the total of on-going MRR at the period-end from clients in place at the start
of the period as a percentage of the opening MRR from those clients.
2 Adjusted EBITDA excludes the impact of any impairment, loss on disposal of assets, share based payment
expenses and non-underlying items.
3 Cash and cash in transit includes the combined value of cash and cash equivalents and cash in transit
classified within trade and other receivables.
i-nexus Global plc
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STRATEGIC REPORT
CORPORATE GOVERNANCE
FINANCIAL STATEMENTS
03
STRATEGIC REPORT:
Company Overview
i-nexus provides strategy software to the world’s largest organisations who want to achieve more
of their goals with less effort, using i-nexus as the place to plan, execute, and track their strategic,
transformational, and operational efforts so that they can deliver the change they want to see.
Our purpose
We’re driven by our passion to help
organisations thrive and deliver the
change they want to see.
Every i-nexus employee represents
these values, and it’s what helps us to
support our customers in delivering the
change they want to see:
This reality is crystallized with Gartner’s
estimates that two thirds of well
formulated strategies
in their
delivery phase.
fail
Through our intuitive, powerful strategy
software, we align everyone and
everything in an organisation to help
our customers achieve more of their
goals with less effort.
Who we are
Founded in 2001, i-nexus was created
from a vision that a learning culture is
the
for organisational
success.
foundation
the
the
core of
Beginning with operational excellence
at
software,
industry- leading practitioners drove
adoption in global organisations, soon
Kanri
leading
functionality – the x-matrix and bowling
chart.
key Hoshin
to
In 2018 the company was admitted to
AIM, marking a key milestone in its
mission to help organisations thrive
and deliver change.
Today, i-nexus is a G2 award-winning
software provider, powering strategies
around the world across manufacturing,
industrial engineering, life sciences, and
automotives.
What we value
To ensure we live and breathe our
purpose, i-nexus believes that everyone
has their PLACE.
• Partnership
We work with the spirit of partnership,
seeing our colleagues, customers, and
vendors as part of i- nexus, working
with a common cause to learn and
succeed.
• Leadership
We act with courage to lead by example
to shape a better future.
• Agility
We strive for early and continuous
delivery, breaking the complex down to
the simple so that we can change with
our customers.
• Curiosity
We are open minded and actively
understand, explore, and try new
approaches, with data and learning at
the heart of our efforts.
• Empathy
We appreciate that there is a person
behind every organisation, so we take
extra effort to understand and support
our
customers, and
vendors.
colleagues,
The problem we solve
A survey of more than 400 global CEOs
found that the ability to execute their
goals – both strategic and operational –
is the number one challenge facing
leaders.
At the heart of the problem is a lack of
a single source of truth.
Organisations don’t have a place where
the entire business can plan goals,
execute portfolios of projects tightly
aligned to these goals, and not only
track, but measure,
report, and
replicate this across the organisation to
create a culture of achievement.
Getting everyone and everything
focused and collaborating on goals isn’t
easy.
This iceberg exists for leaders in every
business. Underneath the surface are
issues in building shared purpose,
aligning operational work to strategic
portfolios, replicating best practices,
bringing business and operating
systems to life, over-engineering, and
proving the impact and benefits of
programs and projects.
The misalignment, planning silos,
disconnected delivery of work, and
manual tracking and reporting
is
worsened with the use of a patchwork
of tools not fit for purpose.
Taking a strategy-to-action is hard.
How we solve it
for
solutions
the whole
With
organisation, from shopfloor to c-suite,
i-nexus helps customers embrace the
challenges of strategy execution and
operational excellence.
Consolidated Financial Statements for the year ended 30 September 2023
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04
STRATEGIC REPORT:
Company Overview continued
• We wrap around customers
i-nexus wraps around how an
organisation wants to deliver their
goals. From bringing to life a business
or operating system, to adapting to
their different locations, languages,
products, and processes, i-nexus gives
customers exactly what they want, how
they want it, all inside one solution.
• We support
i-nexus customers rely on a G2
award- winning team with over fifteen
years of experience in strategy execution,
Hoshin Kanri, Lean, and project
management to overcome challenges,
spot gaps, and accelerate success.
• We integrate
i-nexus provides a single source of
truth, connecting project management
software, ERP, CRM, and other critical
systems to give organisations a total
view of what matters to delivering
results, moving
from
patchwork technology slowing success.
them away
• Plan
Wherever in the organisation, our
x-matrix, balanced scorecard, and
portfolio tools support well-balanced,
transparent plans.
• Execute
Whether controlling the portfolio, or
contributing to a project, i-nexus gives
user vast tools to align everyone to
non-strategic
off
plans,
disruptions, and build a stronger
execution culture.
ward
• Track
Whatever metric, goal, countermeasure,
or
team-focusing scorecards are
needed, i- nexus makes it easy to enter
data and build a crisp picture of
performance, enabling the businesses
to readily change direction.
Why i-nexus?
Every day, manufacturers, industrial
engineers, automotives, FMCGs and
beyond use i-nexus for their strategic,
transformational, and operational goals
so that they can deliver the change they
want to see in the world.
With 200,000+ strategic goals being
delivered inside i-nexus, our customers
choose us to help align their goals,
engage
in strategy
teams
execution, power their systems, and
drastically reduce the time once spent
on manual reporting.
their
• Strategy execution
i-nexus helps everyone focus and
collaborate on delivering the strategy.
Designed for strategy offices and
transformation teams, i-nexus links
plans, portfolios, and performance
metrics for a simpler strategy execution
experience whether using Hoshin
Kanri, Balanced Scorecard, or a custom
business system.
value
• Operational excellence
i-nexus helps businesses unlock
repeatable
from
strategic
operations. Built for PMOs and Lean,
Six Sigma, and process professionals,
i-nexus ensures goals across portfolios,
programs, and projects are executed
according to their approach, powering
Kaizen, Lean, Six Sigma, project
management, process
risk
governance, and custom operating
systems.
and
• Strategic portfolio management
i-nexus strategic portfolio management
tools help leaders group and deliver
projects and programs in portfolios
across
growth, CAPEX,
transformation, Mergers & Acquisitions,
Environmental- Social-Governance, and
operational excellence.
revenue
How our tools help
i-nexus gives its users a canvas for
planning, executing, and tracking goals
across the entire organisation in an
aligned and transparent manner.
i-nexus Global plc
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STRATEGIC REPORT
CORPORATE GOVERNANCE
FINANCIAL STATEMENTS
05
STRATEGIC REPORT:
Chairman’s Statement
“Despite the recent global economic challenges, many
industries have recovered and continue to do so in what
has been a high-inflation environment. The impact for
i-nexus has been that we have continued to win new
customers and that some of our most engaged customers
have or are looking to substantially increase their use of
our software. Our customers are looking to speed up
delivery across all aspects of their businesses, whether it
is production, supply chains, yields, marketing and sales
to name just a few areas. The use of products such as
i-nexus helps our customers achieve these fundamental
business improvement aims and increase their ability to
achieve their strategic goals with relative ease.”
In my previous Chairman’s statement I
discussed the challenges that i-nexus
faced as global economies recovered
the Covid-19 pandemic and
from
we all faced new challenges from
global economic disruption.
Few
commentators envisaged not only the
severity of the economic ructions but
also the global political uncertainty, in
Europe, Africa, China and the Middle
East. Despite these challenges many
industries have recovered and continue
to do so in what has been a high
inflation environment.
The impact for i-nexus has been that we
have continued to win new customers
and that some of our most engaged
customers have or are
looking to
substantially increase their use of our
software. Our customers are looking to
speed up delivery across all aspects
it
of their businesses, whether
is
production, supply chains,
yields,
marketing and sales to name just a
few areas. The use of products such
as
i-nexus helps our customers
achieve these fundamental business
improvement aims and increase their
ability to achieve their strategic goals with
relative ease.
ensure our efforts are aligned to
addressing this fundamental challenge.
Our core product, Workbench, is one of
the leading products to automate the
deployment of strategy across complex
enterprises and once deployed in scale
it is critical to large customers gaining
visibility of progress towards their
objectives. It is increasingly clear that all
our major customers have their own
unique strategy execution models, in
many cases based around established
models such as Hoshin Kanri or OKR
(Objectives and Key Results) but almost
always adjusted to the customer’s
particular requirements. We incorporate
much of the functionality required by our
customers to automate their strategic
processes and we continue to strive to
make it faster and easier to deliver
business value. We are looking at how
our customers, existing and new, can
engage faster, deploy quicker and reap
benefits from the outset of an i-nexus
deployment, reducing the risk of a
lengthy time to value and speeding up
the demand
for
additional licences. We continue to
from customers
i-nexus has no direct
Although
dependency upon raw materials, high
inflation has had a significant impact on
our staff, the lifeblood of a software
business. Our staff remain extremely
loyal to the business and in turn we have
tried wherever possible to ensure
remuneration
remain
competitive. We must continue to retain
vital talent in the business.
packages
I am cognisant of the current market
capitalisation of the business which, in
my view, does not reflect the quality of
the Company’s products, the expertise
within the staff, nor the quality of the
customer base. The business and core
product, Workbench, have continued to
make progress during FY23 but we
remain an extremely small company in
the quoted arena. We have little option
but to continue to focus on how to grow
faster, getting the business profitable
and finding ways in which stability can be
enhanced. The Board of Directors and
myself continue to strive to achieve these
Consolidated Financial Statements for the year ended 30 September 2023
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06
STRATEGIC REPORT:
Chairman’s Statement continued
aims as quickly and effectively as
possible. With Government increasingly
interested in encouraging institutional
investors to support small UK businesses
building for the long term. we remain
alert to all opportunities to accelerate the
growth of i-nexus.
Once again I would like to take this
opportunity to thank our loyal staff,
customers and shareholders for their
support and I look forward to FY24 and
the continued development of our
to solve our customers
products
challenging business needs.
Richard Cunningham
Chairman
20 December 2023
i-nexus Global plc
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STRATEGIC REPORT
CORPORATE GOVERNANCE
FINANCIAL STATEMENTS
07
STRATEGIC REPORT:
Chief Executive Officer’s Report
“I am pleased to share with you the encouraging progress i-nexus has
made over the past year, marking the conclusion of our two-year strategy.
The focus of this strategy was the decision to revise our go-to-market
approach, shifting our marketing focus to a content-led strategy and
deliberately securing smaller initial deals, servicing limited business areas
or teams within the customer where demonstration of value would lead
to the potential for significant expansion opportunities.
Under this approach, the Group has successfully delivered a consistent
volume of such logos (seven in FY23 and nine in FY22), expanding the use
of the solution in over 70% of the accounts signed across FY21 and FY22,
with an average MRR growth value of 66% since signing date. These
successes have culminated in the Group achieving one of its key financial
goals of delivering back-to-back years of improved double-digit MRR
growth, with a 16% increase in FY23 (FY22: 12%) to a year-end exit rate
of £289k (30 September 2022: £250k, 30 September 2021: £223k).”
Overview
I am pleased to share with you the
encouraging progress i-nexus has made
over the past year, marking the
conclusion of our two-year strategy
which was developed following the
global challenges brought on by the
Covid-19 pandemic.
a
The focus of this strategy was the
decision to revise our go-to-market
approach, shifting our marketing focus
and
to
strategy
content-led
deliberately securing smaller
initial
deals, servicing limited business areas
or teams within the customer where
demonstration of value would lead to
the potential for significant expansion
opportunities.
Under this approach, the Group has
successfully delivered a consistent
volume of such logos (seven in FY23
and nine in FY22), expanding the use of
in over 70% of the
the solution
accounts signed across FY21 and FY22,
with an average MRR growth value of
66% per logo since signing date.
These successes have culminated in the
Group achieving one of its key financial
goals of delivering back-to-back years of
improved double-digit MRR growth, with
a 16% increase in FY23 (FY22: 12%)
to a year-end exit rate of £289k
£250k,
2022:
(30
30 September 2021: £223k).
September
our
Supplementing this result has been the
partner
of
establishment
programme, providing a new path to
market for the business beyond our
internal team, with several consulting
firms signing agreements in the year.
These partners endorse our solutions
to their clients, thereby providing us
with additional opportunities, with our
first partner-led deals being secured in
FY23 and a further one in Q1 FY24. The
continued growth and development of
this programme is seen as a strategic
priority for the forthcoming year.
that
Our accomplishments are a reflection of
our strategic focus and the market
opportunity
lies ahead. The
business is optimistic about the direction
in which it is heading and we eagerly
anticipate
sharing our continued
progress.
Trading
The business continued to deliver a
steady flow of new logos this year with
the addition of seven accounts
(FY22: nine) generating £23k of MRR
(FY22: £30k MRR). Whilst these were
contracted at a marginally lower initial
average value to the prior year, the
opportunity for expansion is equivalent
to the profile of accounts signed in the
prior year.
Encouragingly, our new customers span
a variety of new industries and countries
outside of our key markets, reflecting
our capability to cater to diverse
markets. This diversity underpins our
conviction
companies,
irrespective of their industry or size, can
reap the benefits of a well-executed
strategy.
that
all
A highlight of this year, and a key
strategic objective, has been the level of
expansion within existing accounts,
which totalled £36k of MRR (FY22: £10k).
As a consequence of this growth, net
retention (measured by the total value
of on-going MRR at the period-end from
clients in place at the start of the period
as a percentage of the opening MRR
from those clients) grew to 107%, up
from 98% in the previous year.
Consolidated Financial Statements for the year ended 30 September 2023
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08
STRATEGIC REPORT:
Chief Executive Officer’s Report continued
impact of
that
While the delivery of several operational
and financial goals
represents a
successful outcome of the Group's
two-year strategy, especially considering
the pandemic, we
the
recognise
the business has
significant potential for far greater
market penetration. The Group’s new
three-year plan, summarised within the
Strategic Focus section of this report, has
been developed to capitalise on this
potential, with particular focus on serving
an increasing proportion of businesses
that are eager to deliver value with
minimal implementation requirements.
Market Opportunity
In today's dynamic business landscape,
success hinges on more than just
setting goals – it's about executing them
swiftly, with keen insight, and across
intricate ecosystems. At i-nexus, we
recognise this challenge, and our
Strategy Execution Management (SEM)
software is purpose-built to deliver
substantial value.
Bridging Strategy and Execution:
Our SEM software category continues to
evolve and gain traction as companies
hasten
to digitalise mission-critical
processes in this post-pandemic era. We
believe that strategy without execution is
merely a wish, and execution without
strategy lacks direction. Our mission is to
bridge this gap, providing a seamless
platform where strategy and operations
converge. Key
aspects of our
solution are:
Growth Indicators:
• Active Buyers on G2: We have seen
a remarkable surge in businesses
looking for a strategy solution on the
world’s largest tech marketplace – a
staggering 222% increase since 2018.
• Agility at Pace: Organisations need
to move swiftly. Our platform
ensures that strategy execution
keeps pace with the ever-changing
business environment.
•
Insightful Visibility: In complex
ecosystems, visibility is paramount.
high-level
i-nexus
transparency, allowing leaders to
track performance seamlessly.
provides
• Collaboration at the Core: We
foster collaboration across teams,
departments, and even entire
organisations. Our platform ensures
that everyone is aligned, working
toward common goals.
integrate
• Strategy Meets Operations: We
seamlessly
strategic
planning with operational execution.
No more silos – just a holistic view of
progress.
• Web Traffic Surge: At i-nexus, our
web traffic has skyrocketed. We've
experienced a outstanding 561%
growth since 2018. This surge aligns
perfectly with the escalating demand
for effective strategy execution.
• Sales Momentum: Our efforts
translate into results. Sales accepted
leads have risen by 50% since 2018.
Industry Validation:
• Gartner's Stamp of Approval:
Strategic Portfolio Management, a
cornerstone of our offering, has
been
validated and accepted.
focus on
Organisations now
organisational readiness, recognising
the value of solutions like ours.
• McKinsey's Insight: The rise of
remote teams underscores the need
for software that facilitates seamless
strategy execution and collaboration.
this
We're positioned
demand head-on.
to meet
The market opportunity before us is
substantial and expanding. As we
navigate this exciting landscape, i-nexus
stands ready to empower organisations
worldwide.
People
The Board extends
its heartfelt
gratitude to our employees for their
unwavering support and dedication to
the business and our customers. Their
commitment
the
successes we have achieved. At i-nexus,
we are fortunate to have a team of
talented and devoted individuals who
work together towards a common goal,
consistently delivering results. Their
reflected
in
is
i-nexus Global plc
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STRATEGIC REPORT
CORPORATE GOVERNANCE
FINANCIAL STATEMENTS
09
collective efforts are the driving force
behind our accomplishments.
on going value to our customers and
evolve in the marketplace.
Strategic Focus
As we transition from our successful
two-year strategy, we embark on a new
is positioned
three-year plan that
around three key themes:
1. Customer
Experience
and
Engagement: We will help deliver
strategic value by finding new ways
to encourage user adoption, making
our products more engaging and
enjoyable, and offering obligation-
free trials of our software. The
business will also focus on enabling
customer
from
onboarding to expansion with a key
ensure
component being
configuration is more accessible.
self-service,
to
development
2. Product Enhancement: i-nexus is
committed to leveraging modern,
cloud-native technology to help
simplify
and
maintenance. The business will
provide our customers with rich, out-
of-the-box
and
analytics, and gradually transition
our products to self-serve account
management.
visualisations
3. Strategic Planning and Execution:
Focus placed on helping customers
orchestrate and "do the work” in-
between data entry and reporting
insight. This is particularly true in the
execute phase of Strategy. On the
other end of the spectrum, the
business acknowledges the growing
in capabilities around
interest
formulating
before
strategic planning.
strategies
themes
represent
our
These
overarching goals for the next three
years and provide a clear direction for
our efforts as we continue to delivery
In terms of 2024, our strategic focus will
be on four key areas that will drive
our growth:
1. More efficient go-to-market
(GTM) approach: We aim
to
enhance our efficiency in delivering
new growth while addressing the
challenge of lengthy sales cycles,
ensuring a more streamlined and
agile process.
2. Develop compelling customer
case studies: We will
further
strengthen our understanding of
their needs and maximise our
impact on their businesses. We plan
to go live with a streamlined set of
customer value metrics generating
insightful case studies.
3. Deliver
enhanced/optimised
management
Workbench
capability: Having worked closely
with customers and prospects,
development of several stories
which are key areas of improvement.
4. Capitalise on successful proof of
concepts: The business continues
to explore opportunities for product
innovation. With several "proof of
successfully
concept" products
concluded, we will
these
trial
innovations with new customers.
Outlook
The business is off to a promising start
this year, with our core use cases
consistently delivering progress. The
active trials of our platform by potential
customers, coupled with the growing
expansion opportunities within our
existing
are
encouraging signs. We've kicked off the
year on a positive note, securing a new
customer
base,
customer win and an expansion with a
key client, and we have two more
promising opportunities moving into
the contracting phase.
While we did experience the loss of a
significant, albeit legacy, customer, we
swiftly
implemented mitigation
strategies to protect our cash flows and
minimise the impact on our progress
towards an EBITDA breakeven position.
This
loss, while unfortunate, has
allowed us to shift our focus entirely to
our newer systems, propelling us
forward.
loss, we have
Our attention remains firmly on
ensuring the adequacy of our cash
resources and executing mindful
investment decisions as we steer i-
nexus towards profitability. Despite the
customer
taken
necessary measures to safeguard the
business from a cost perspective. The
Directors continue to be of the opinion
that the Group has sufficient working
capital for its present requirements,
that is for at least 12 months from the
date of this release.
The increasing interest in strategy
execution, our growing confidence in
lead nurturing and generation, our
ongoing product improvements, and
the heightened engagement from our
partners all fuel our optimism for
in
delivering
customer numbers and upsells. These
factors collectively contribute to our
positive outlook for the future.
incremental growth
Simon Crowther
Chief Executive Officer
20 December 2023
Consolidated Financial Statements for the year ended 30 September 2023
267084 i-nexus AR pp01-pp11.qxp 20/12/2023 12:31 Page 10
10
STRATEGIC REPORT:
Chief Financial Officer’s Report
“During the year, the Group’s cash position was
enhanced by securing £500k of funding through
the issue of Fixed Rate Unsecured Convertible
Redeemable Loan Notes in order to assist with the
Group’s working capital headroom in the near term
to enable the business to focus its efforts on delivering
on its pipeline opportunities and realizing the growing
expansion opportunities within its customer base.”
(FY23: seven, FY22: nine) delivering £23k
MRR (FY22: £30k MRR) with equivalent
levels of expansion opportunity in these
accounts through FY24 to customers
signed in the last two years.
software
expected,
As
revenues
recognised in 2023 increased by 13%
to £3,236k
(FY22: £2,857k) as a
consequence of the new business and
account expansion successes since the
start of 2022. These now represent 92%
of overall revenue (FY22: 91%).
As announced, following the year-end,
the Group was informed that a major
legacy customer, using the older, highly
customised version of the
i-nexus
software, does not intend to renew its
contract at the calendar year-end. Whilst
the Board has rapidly put in place
mitigating actions such that the impact
on the Group’s cash flows is minimised
and the adjusted EBITDA breakeven
position can be substantially preserved,
it is likely to moderate the Group’s FY24
MRR growth against FY22 and FY23
levels. Positively, the business continues
to deliver MRR growth through its core
proposition, securing a further two new
logos and delivering a key account
expansion in Q1 FY24, totalling £12k
MRR.
Services revenues
Revenue from associated professional
services has increased by 8% to £292k
(FY22: £270k), driven by an uplift in H2
through the timing of delivering new
customer deployments and existing
change orders, a trend expected to
continue into FY24 underpinned by the
deferred revenue balance related to
services at 30 September 2023 being a
third higher than at 30 September 2022.
Gross Margin
Gross margin in the year remained
stable at 80% (FY22: 79%) with the
increase in revenue driving the uplift
from £2,461k to £2,833k.
Reported Gross Margin
the
combined Gross Margin over both
recurring software subscriptions and
professional services.
is
Revenue
Licence revenues
Monthly recurring revenue (‘MRR’), the
key financial metric for the Group, grew
by 16%
in the year to £289k at
30 September 2023 (30 September
2022: £250k) as the business delivered a
second year of improved double-digit
growth (FY22: 12% increase in MRR).
A key contributor to this success is the
realisation of our revised land and
expand go-to-market strategy from the
start of 2022, with logos secured during
the last two years having seen average
growth in MRR value of 66% by the end
of FY23. This level of expansion is
testament to the increasing strength of
our client relationships and quality of our
product, with net retention (measured by
the total value of on-going MRR at the
period-end from clients in place at the
start of the period as a percentage of the
opening MRR from those clients) in the
year rising to 107% (FY22: 98%).
Supporting this growth was the Group’s
continued ability to secure a consistent
the year
logos
level of new
in
i-nexus Global plc
267084 i-nexus AR pp01-pp11.qxp 20/12/2023 12:31 Page 11
STRATEGIC REPORT
CORPORATE GOVERNANCE
FINANCIAL STATEMENTS
11
Adjusted EBITDA
Adjusted EBITDA (EBITDA excluding the
impact of impairment, loss on disposal
of assets, share-based payments, and
non-underlying items) totalled a loss of
£499k for the period (FY22: loss of
£552k), with the increase in revenue
being partially netted against an uplift
in overhead costs reflecting the Board’s
decision towards the end of FY22 to
select number of
accelerate a
investments both
its existing
employee base to preserve retention
and in additional resource needed for
operational delivery.
in
As mentioned in the FY22 Annual
Report, there remains no plans to make
further investments until such time as
the business is delivering a positive
Adjusted EBITDA.
Depreciation, amortisation and
impairment
Total costs in respect of depreciation,
amortisation, and impairment were
£339k in FY23 (FY22: £385k). With the
business having low capital expenditure
requirements, the value is principally
made up of amortisation on intangible
assets, being capitalised development
costs, totalling £198k (FY22: £165k) and
any subsequent impairment charges
(FY23: £126k, FY22: £155k).
These costs are reflective of the
continual evolution of the market in
which the Group operates, the needs of
its customers, both present and
prospective, and the Group’s agile
approach to continually developing and
improving its offering.
Statutory results
The Group reported a loss before
taxation for the year of £982k (FY22:
loss of £1,105k).
Cash and cash equivalents
The Group had cash & cash in transit at
30 September 2023 of £267k (FY22:
£99k), with the end of the financial year
representing the annual cash low point
for the business given the seasonality
in cash flows arising from the timing of
the invoicing and collection of the
Group's recurring revenue, the majority
of which is billed during Q1 and Q2.
During the year, the Group’s cash
position was enhanced by securing
£500k of funding through the issue of
Fixed Rate Unsecured Convertible
Redeemable Loan Notes in order to
assist with the Group’s working capital
headroom in the near term to enable
the business to focus its efforts on
delivering on its pipeline opportunities
and realising the growing expansion
opportunities within its customer base.
the
The business continues to drive a
reduction in its net cash outflow from
operating activities (FY23: £228k, FY22:
£237k), with
impact of new
business successes, improved service
billing
renewal
performance in the year being offset
against the full-year cost impact of the
select investments made towards the
end of FY22.
strong
and
a
Whilst the loss of a major legacy
customer following the year-end will
affect the FY24 operating cash flows,
the Board has rapidly put in place
mitigating actions such that the impact
on the Group’s cash flows is minimised.
Careful cash management will continue
to be a priority focus for the Board. As
previously outlined, there are currently
no plans to increase the existing cost
base until such time as the business
achieves a position of at least Adjusted
EBITDA breakeven.
The Group also continues to apply
treasury and foreign currency exposure
management policies where possible to
minimise both the cost of finance and
our exposure to foreign currency
exchange rate fluctuations.
Net debt at 30 September 2023 was
£1,964k (30 September 2022: £1,710k).
On 21 June 2023, the Company agreed
with the holders of the £1,325k and
£650k Convertible Loan Note tranches
to extend the redemption date from
4 November 2024 to 4 November 2025
and
to
September
29 September 2025 respectively, see
note 7 for further details.
2024
29
The Group prepares budgets, cashflow
forecasts and undertakes scenario
planning to ensure that the Group can
meet its liabilities as they fall due.
The Board’s assessment in relation to
going concern, including a description
of its current scenario planning, is
included on page 16 of the report.
receivables have
Balance sheet
Trade
remained
broadly in line with FY22 levels at £580k
(30 September 2022: £609k) due to the
timing of receipt of annual licence fee
and subscription invoices issued in the
final months of the year.
The growth in the Group’s MRR and
accompanying services resulted
in
deferred revenue increasing to £1,477k
at 30 September 2023 (30 September
2022: £1,320k). The Group’s cash
collection
remain
strong with DSO (debtor days) at
30
57
September
(30 September 2022: 60).
disciplines
2023
of
Principal risks and
uncertainties
The Group’s principal
uncertainties
set
pages 12 to 18.
are
risks and
on
out
Drew Whibley
Chief Financial Officer
20 December 2023
Consolidated Financial Statements for the year ended 30 September 2023
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12
STRATEGIC REPORT:
Principal Risks and Uncertainties
The Board of the Company regularly reviews business risk and the Group’s appetite for risk relative to its goals. There are a
number of potential risks and uncertainties, some of which could have a material impact on the Group’s performance, and
therefore could cause actual results to differ materially from those expected.
Set out below are the significant business risk areas identified, together with an overview of the mitigating factors considered by
the Board. This is not an exhaustive list of the risks faced by the Group and is not necessarily presented in order of priority.
Mitigation
Trend: Level risk
The Group prepares regular business
forecasts and monitors its projected cash
flows, which are reviewed by the Board.
and
scenarios
sensitivities
The
demonstrate that there are mitigating
actions management can
implement
should the plans not deliver the expected
sales growth.
The Group's Annual Licence Fee model, in
which software licence fees are received
annually in advance, provides good levels
of visibility such that any required
mitigating actions can be implemented on
a timely basis.
Risk
Description
Working capital
Vulnerability of the Group’s
working capital.
Whilst the Directors believe that the
improvement in sales conversion seen
across FY22 and FY23 is sustainable, the
Group’s working capital position is still
exposed should this weaken and /or its
expected growth within existing accounts
be lower than planned in FY24.
issues
The recent injection of funds, as a result
in
of the Convertible Bond
June 2023 will provide the necessary
flexibility and coverage to the risk posed
should any customer delay payment in
order to satisfy the Group’s near term
funding requirements
The Group’s continuing viability in the
longer term remains critically dependent
on its ability to secure new sales and
expand the use of the software in existing
accounts.
It
is possible that the Group will
experience a slower and/or lower sales
conversion rate than the Directors have
modelled within their base case financial
projections. This could in turn have a
material adverse effect on the Group’s
business, results of operations, financial
condition and prospects.
i-nexus Global plc
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STRATEGIC REPORT
CORPORATE GOVERNANCE
FINANCIAL STATEMENTS
13
Risk
Description
Market & product
development
The strategy market may
not evolve as expected or
our products fail to meet
the expectations of the
market.
Whilst the Board believes that there is
strong evidence of an increasing trend to
digitalize strategy by its target customers,
a large proportion of the Group’s target
market continues to use traditional
methods and
in-house developed
systems.
that
Although the Group has achieved its
market position
through a deep
understanding of the market, and the 15
years of development of its i-nexus
software, there is no guarantee that either
our product continues to meet customer
expectations or
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
to
products, respond more quickly
changes in customer requirements and
devote greater
the
enhancement, promotion and sale of
their products, which could have a
negative impact on the Group’s business.
resources
to
Account Proliferation
Failure of our existing
to grow as
accounts
from
planned, resulting
dissatisfaction with
the
product and/or deployment
issues.
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
year, this is no guarantee that it will
continue to happen at the increasing rate
predicted. Any failure of this anticipated
account proliferation occurring will impact
the Group’s future success and adversely
affect its business, prospects and financial
position.
Mitigation
Trend: Level risk
The Group has
internal sales and
marketing functions, which are also
supported by a network of consulting
partners,
that work with potential
customers to educate them on the
benefits of digitising strategy and the
associated benefits the product can offer
an organisation.
The rate of incoming enquiries continues
to support the view that the need to
digitise strategy is becoming ever more of
a focus for businesses.
The Board feels that the continued
enhancement along with the Group’s
product strategy and R&D focus mitigates
this risk. 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.
Trend: Reducing risk
Many of the new logos signed across FY22
“Land and Expand”
and FY23 were
opportunities with clear intent, whereby a
smaller subset of a much larger future
deployment have commenced using the
product first. The business has seen the
beneficial impact of this strategy in FY23
with record levels of account growth both
in terms of volume and value. This team’s
efforts at growing our existing accounts
has been assisted by the recent product
enhancements aimed at improving user
experience.
The Board continue to monitor the efficacy
and outcomes of the Group’s efforts in
growing existing accounts in FY24.
Consolidated Financial Statements for the year ended 30 September 2023
267084 i-nexus AR pp12-pp23.qxp 20/12/2023 12:32 Page 14
14
STRATEGIC REPORT:
Principal Risks and Uncertainties continued
Description
The Group’s ability to attract new clients or
retain existing clients is largely dependent
on
to provide a reliable
high-quality product and services and to
maintain a good reputation.
its ability
Because many of the engagements of the
Group involve projects that are critical to
the business, the failure or inability of the
Group to meet a client’s expectations could
have an adverse effect on the client’s
operations and could result in damage to
the reputation of the Group.
Certain contracts may provide for a
reduction in fees payable by the client if
service levels fall below certain specified
thresholds, thus potentially reducing or
eliminating the profit margin on any
particular contract.
If the Group fails to meet its contractual
obligations or perform
client
expectations, it could be subject to legal
liability or damage to its reputation and the
client may ultimately be entitled to
terminate the contract.
to
Technology
Adverse economic conditions worldwide
can contribute to slowdowns in the
Information
spending
environment and may impact the Group’s
business, resulting in reduced demand for
its products as a result of decreased
spending by clients and increased price
competition for the Group’s products.
The Group’s revenues, expenses and
operating results could vary significantly
from period to period as a result of a
variety of factors, some of which are
outside the Directors’ control.
Mitigation
Trend: Level risk
The Group employs highly skilled
personnel and has business processes in
place to endeavour to ensure that any
lapse is quickly identified and addressed.
In addition, significant issues and client
to senior
escalations are reported
management and, if appropriate, the
Board.
The Board reviews monthly dashboards
on project delivery and client-related risks.
Trend: Level risk
The Group’s preferred annual licence fee
model generates recurring revenue which
provides some resilience against the full
effects of market deterioration.
Additionally, the Group operates
in
multiple geographic regions across a
number of business sectors. The present
macro-economic environment is being
monitored closely in conjunction with
regular pipeline reviews.
Risk
Contractual
obligations
Failure to optimize our
deployed product or meet
our contractual obligations,
client expectations or
agreed service levels
Macroeconomic
conditions
may
affected
Demand for the Group’s
be
products
adversely
if
economic and market
conditions
are
unfavourable.
i-nexus Global plc
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STRATEGIC REPORT
CORPORATE GOVERNANCE
FINANCIAL STATEMENTS
15
Risk
Description
Dependence on key
Customers
Failure to retain our larger
key customers.
Security Breaches and
Cyber Attacks
of
the
Vulnerability
Group’s
to
security breaches or cyber
attacks.
systems
During the year, a relatively small group of
key customers provided approximately
half of the Group’s 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.
Following the year-end, the Company was
informed
these key
that one of
customers, the last remaining client using
the older, highly customized version of
the i-nexus software, does not intend to
renew at its calendar year-end.
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 Group or its
customers’ business.
Given the reliance of the business on its
information technology systems, the
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.
Mitigation
Trend: Reducing risk
The majority of this small group of
in contracts with a
customers are
remaining term of more than one year and
all bar one of them have been longstanding
clients for a period of at least five years.
Whilst it was unfortunate to part ways with
a valued customer following the year-end,
especially one with whom we have
enjoyed a strong working relationship, the
use of the highly customized version of
the software always provided an increased
level of inherent risk within their account
that was difficult to mitigate.
of
team
As previously reported, the Group has a
dedicated
long-standing
experienced professionals acting as
Success Managers.
have
well- established processes and reporting
that allow them to get early warning of
any issues.
They
Trend: Level risk
The Group takes its Information Security
very seriously as demonstrated by its
ISO27001 accreditation. Employees are
trained in this area to ensure best practice
measures are followed for Information
Security.
The Group utilises the latest security
products, with staff receiving regular
security awareness training and testing.
The security regime is regularly reviewed,
and the Group invests in state-of-the-art
systems to keep both its cloud platform
and office networks protected against
cyber-attack.
In addition, our systems are subjected to
frequent
third-party
penetration testing to help ensure our
system integrity.
rigorous
and
The Group has cyber security insurance in
place and the Group endeavors to secure
limitations of
its
customer contracts.
liability clauses
in
Consolidated Financial Statements for the year ended 30 September 2023
267084 i-nexus AR pp12-pp23.qxp 20/12/2023 12:32 Page 16
16
STRATEGIC REPORT:
Principal Risks and Uncertainties continued
Mitigation
Trend: Level risk
The Group works closely with external
parties to ensure competitive pay and
benefits are being offered to both attract
and retain people.
to
invest
opportunities
in people
We continue
development and training initiatives to
provide
career
fulfillment and progression. Wherever
appropriate we seek to develop and
the existing
promote
staff pool.
from within
for
Executive and staff remuneration plans,
incorporating long-term incentives, have
been implemented to mitigate this risk.
Trend: Reducing risk
Significant efforts
in relation to the
evolution of this strategy have taken place
across FY23 with good levels of success.
in place a
The business has put
comprehensive process
in order to
identify and ensure all channel partners
are the right strategic fit, with all
agreements including clauses to preserve
against the under-delivery or non-delivery
of customer requirements.
The Board will continue to closely monitor
progress through FY24 in this area.
Risk
Description
Recruitment &
retention
Risk of failing to attract
and/or
key
personnel.
retain
As the Group grows it has a dependence
on the recruitment and retention of highly
skilled employees and an ongoing reliance
on a limited number of key personnel,
including
the Directors and senior
management, who have significant sector
experience.
The job market is increasingly competitive
in the cloud technology sector, particularly
following the pandemic and subsequent
acceleration of cloud adoptions and digital
transformation trends.
The business requires specialist technical
skills that can be scarce.
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.
is to
Part of the Group’s strategy
increasingly sell its software through
There are no
channel partners.
guarantees
channel
partners will be found to sell the Group’s
software at the rates planned.
sufficient
that
confident
The Directors are
that
engagements to date by existing and
prospective channel partners provide
strong evidence of the opportunity
available. During the year, the Group
delivered multiple new logos through its
channel partners, with several further
agreements with strategic partners
providing well progressed pipeline
opportunities at year end.
Despite the significant progress made in
the year, unlocking the full potential of a
productive channel partner programme
in the future could affect the Group’s
future success.
Dependence on
Channel Partners
Failure to develop this
additional route to market
effectively.
i-nexus Global plc
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STRATEGIC REPORT
CORPORATE GOVERNANCE
FINANCIAL STATEMENTS
17
Risk
Financial risk
management
The principal financial
instruments used by the
Group,
which
from
financial risk arises, are
trade receivables, cash at
bank, trade and other
payables.
Description
Credit risk
Mitigation
Trend: Level risk
Credit risk is the risk of financial loss to the
Group if a partner or customer fails to
meet its contractual obligations.
The Group is principally exposed to credit
risk from credit sales and/or bank default.
It is Group policy to assess the credit risk of
new customers and partners before
entering new contracts and it has a
frequent and proactive collections process.
Under the terms of our contracts many
services are charged for in advance of
delivery, thus mitigating the risk further.
Liquidity risk
Trend: Level risk
Liquidity risk arises from the Group’s
management of working capital. It is the
risk that the Group will encounter
difficulty
its financial
obligations as they fall due.
in meeting
On a monthly basis, the Directors review
the Group’s trading to date, the Group’s
full year financial projections as well as
information regarding cash balances,
debtors, trading and prospects. This
allows the Directors to form an opinion as
to the working capital of the Group and its
likely future requirements in order to plan
accordingly.
Currency risk
Trend: Level risk
As a consequence of
the Group’s
exposure transacting in foreign currencies
there are risks associated with changes in
foreign currency exchange rates.
is based
The Group
in the United
Kingdom and presents its consolidated
financial statements in pounds Sterling.
The Group’s current revenues are
generated primarily in Sterling, US dollar
and Euros. The Group also has some
contractual
are
obligations
denominated in US Dollars.
that
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
foreign currency
our exposure
exchange rate fluctuations.
to
these
Notwithstanding
hedging
arrangements, the Group does have
exposure to translation effects arising from
movements
in the relevant currency
exchange rates against sterling. Therefore,
there can be no assurance that its future
results or resources will not be significantly
affected by fluctuations in exchange rates.
Consolidated Financial Statements for the year ended 30 September 2023
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18
STRATEGIC REPORT:
Principal Risks and Uncertainties continued
Risk
Description
Mitigation
Inflation risk
Future
inflationary
increases could affect the
Group’s margins
inflationary
Any significant
increases
would quickly impact the Group’s cost
base, with a delay of potentially over
12 months before increased costs can be
passed to clients. Services rates typically
cannot be increased during the initial
deployment for a client.
Trend: Increasing risk
The inflationary environment continues to
be closely monitored, and commercial
modelling undertaken to assess the
impact of inflationary increases.
The Group is able to reduce the exposure
in its client contracts with the majority
allowing for inflationary increases to be
applied to fees.
i-nexus Global plc
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STRATEGIC REPORT
CORPORATE GOVERNANCE
FINANCIAL STATEMENTS
19
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.
This duty underpins the Board’s decision-making processes and the Group’s strategic direction, with due consideration given
to the long-term impact of its decisions on shareholders, employees, customers and wider stakeholders. Practical measures
that the Board takes to ensure the interests of these stakeholders are reflected in the Board’s decision making process are
as follows:
Stakeholder Group
Principal Methods of Engagement
Shareholders
Employees
Customers
The Board engages with shareholders throughout the year. During FY23, engagements
with major shareholders and investors were as and when required which also included
detailed feedback reports via our various advisors. This feedback is factored into the
Board’s decision-making process and to ensure that the Group’s market communications
meet investor needs.
All shareholders are encouraged to submit questions prior to the Annual General Meeting
and to lodge their votes ahead of the meeting to ensure that these are counted. The
Annual Report is sent to shareholders at least 20 working days before the Annual General
Meeting and each issue for consideration at the Annual General Meeting is proposed as
a separate resolution. All Directors generally attend the Annual General Meeting.
The Board is fully committed to ensuring that the opinions of employees across all
business areas are regularly sought and factored into its decision-making process.
Through these engagement activities, the Board is able to gather opinions and ideas from
the wider workforce, identify any communication gaps or common areas of concern and
address these through the Group’s activities.
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 CFO along with monthly All Hands briefing emails 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 is proactive in engaging directly with its clients to monitor and continually
improve its service delivery and client satisfaction levels. The Board receives monthly
reports on client-related matters, including support ticket levels, service delivery and
project status reports, which enable it to identify any trends or any areas requiring specific
oversight or investment. In the event that any concerns are raised by clients, the Group
ensures that these are addressed swiftly and that proactive engagement occurs to ensure
ongoing high standards of service delivery.
The Group seeks direct engagement with clients throughout their customer journey,
providing opportunities to speak to their support team, account manager or a member
of senior management.
Consolidated Financial Statements for the year ended 30 September 2023
267084 i-nexus AR pp12-pp23.qxp 20/12/2023 12:33 Page 20
20
STRATEGIC REPORT:
Stakeholder Engagement continued
Stakeholder Group
Principal Methods of Engagement
Suppliers
Environment
The Group engages closely with its suppliers and has internal procedures to ensure that
appropriate due diligence is undertaken on these vendors. Engagement with any new
supplier is subject to a formal process and requires final approval from an Executive
Director. Significant supplier contracts of a recurring nature require approval from the
Board as a whole. Suppliers are chosen according to their ability to meet the Group’s own
high standards and to demonstrate values that are consistent with those of the Group.
Regular engagement takes place with key suppliers, monitoring their performance against
contractual obligations and providing regular feedback in order to foster and support
long-term relationships for the benefit of the Group. In the event that delivery standards
do not meet the Group’s expectations, proactive steps will be taken to communicate and
address these directly with the supplier to ensure that there is no detrimental impact
upon the Group’s activities.
As a provider of software solutions, the Group’s operations have a relatively limited impact
on the environment. However, the Board is committed to implementing measures that
will result in incremental improvements to the Group’s environmental impact, such as
avoiding unnecessary travel and using video-based meeting facilities where appropriate.
The entire workforce is also provided the technology and flexibility to work remotely to
minimise travel.
Environmental impact is also included in the decision-making process for new and existing
suppliers, for example, Amazon Web Services, the provider of our hosting services are
committed to running their business in the most environmentally friendly way possible
and achieving 100% renewable energy usage for their global infrastructure.
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21
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
At the end of each financial year, the Board approves the
annual budget, strategy and growth plans of the Group for the
year ahead.
Shareholders,
Employees,
Customers, Suppliers
Performance of the
Group
Shareholders,
Employees,
Customers, Suppliers,
Environment
In October 2023, the Board approved the Budget for FY24
which incorporated a number of revenue growth and cost
targets. It is felt that these are 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 along with
compliance with ISO requirements as applicable.
During the year, the Board spent significant time reviewing and
agreeing the Group’s sales and product strategy alongside
making a number of tactical decisions, for example on the timing
and quantum of investment into the product development,
customer engagement and marketing teams and the decision
to seek approval from the holders of the Convertible Loan Notes
to extend the final redemption date or the tranches in place at
the start of the year by 12 months to 4 November 2025.
In addition, the Board concluded that in order to allow for a
greater focus on the execution of the Group’s land and expand
strategy, a strategy which has seen good progress in the year,
that it was right to review strategic options for additional
financing in order to provide the business with a cash buffer.
This review resulted in the successful issue of Convertible Loan
Notes in June 2023.
Consolidated Financial Statements for the year ended 30 September 2023
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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. By way of example the
Group runs employee-wide Mental Health Workshops
throughout the year.
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. In July 2023, this process resulted in annual salary
increases and improved pension packages for both Executive
Directors and the wider employee base.
During the year, the Board issued 2,255,343 options to
Directors and employees, see page 71 for details.
Governance,
Regulatory
Requirements and Risk
The Board reviews and approves the results announcements
and trading updates, the half year and annual reports 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
investor roadshows, the Board are
Through the half-year and annual year-end results process
in
alongside any
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 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 compliance with
requirements.
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23
Maintaining a reputation for high standards of business conduct
The Board is mindful that the continued growth and success of the Group is dependent upon maintaining high standards of
business conduct, including:
•
•
•
•
the ability to successfully compete within the market, to attract and retain clients, and to service these clients to a high
standard;
the ability to attract and retain high quality employees;
the ability to attract investors and to meet their expectations of good governance and sound business conduct; and
the ability to meet the Group’s regulatory obligations, and to meet the expectations of relevant regulatory bodies.
This awareness underpins the formulation of the Group’s strategy and is evident throughout the Board’s decision-making
process.
Ensuring that members of the Company are treated fairly
The Board ensures that the Group’s shareholders are treated equally and fairly, regardless of the size of their shareholding
or their status as a private or institutional shareholder. The Group provides clear and timely communications to all
shareholders in their chosen communication medium, as well as via the Group’s website and via a Regulatory News Service.
All holders of Ordinary shares are eligible to receive dividend payments and to vote at general meetings of the Company.
By Order of the Board
Drew Whibley
Director
20 December 2023
Consolidated Financial Statements for the year ended 30 September 2023
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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 (‘CEO’)
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 degrees from Birmingham University: one in mathematics
and the second in computer science.
Drew Whibley, Chief Financial Officer (‘CFO’)
Drew Whibley joined the Group as CFO in 2022, assuming a strategic role and is responsible for
managing and controlling all finance, legal and company secretarial-related activities. A Chartered
Accountant, most recently Drew spent five years with LSE-listed software business Aptitude
Software Group plc, during which he, as Group Finance Manager, oversaw both the internal and
external reporting and budgetary requirements while playing a key role in delivering on the Group’s
strategy.
David Firth, Independent Non-Executive Director
David is a Fellow of the Institute of Chartered Accountants in England and Wales and is a highly
experienced PLC board member with a strong understanding of the software industry. His current
directorships include Parity Group Plc, an IT services and data consultancy business and Celadon
Pharmaceuticals Plc, a UK based pharmaceutical company focused on the research, cultivation,
manufacturing, and supply of cannabis-based medicines. He is chairman of the remuneration
and audit committees at both companies. David was previously Chairman and a non-executive
director of Best of the Best plc, an organiser of weekly competitions on-line to win cars and other
luxury prizes. He was the Finance Director of Penna Consulting plc from 1999 to 2016 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.
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25
CORPORATE GOVERNANCE:
Corporate Governance Statement
Chairman’s Introductory Statement on Corporate Governance
As the Chairman of the Board I must ensure its 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
Chief Executive Officer’s Report 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 whilst the AGM provides an opportunity for all shareholders to engage and to
ask questions of the Board. The Group also 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 Stakeholder
Engagement section of the Strategic report on pages 19 to 23.
Consolidated Financial Statements for the year ended 30 September 2023
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CORPORATE GOVERNANCE:
Corporate Governance Statement continued
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 12 to 18. 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 24. 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 24.
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
During the year, the Group formally communicated its company values to all employees after seeking input from several areas
of the business. These include but are not limited to the following behaviours and attitudes; ego-less, customer centric, high
integrity, respectful, supportive, caring, professional, quality driven, passionate, think for themselves.
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27
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
implementing appropriate systems and controls 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, these will continue to be reviewed by the
Board to ensure they remain appropriate as the business 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 alongside each receiving 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 2023, 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 providing 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 – 3/3
Drew Whibley 12/12 – 3/3
Roles and Responsibilities
The roles of the Chairman and Chief Executive Officer are separated and clearly defined.
Consolidated Financial Statements for the year ended 30 September 2023
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CORPORATE GOVERNANCE:
Corporate Governance Statement continued
The Chairman provides leadership to the Board by ensuring that there is sufficient time to discuss issues on the agenda and
facilitates 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, 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, a Chartered Accountant who brings a high level of
financial and corporate governance experience, chairs 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 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 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 compliance with
accounting standards on software revenue recognition, capitalisation of software development costs and other key
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 findings reported by the Independent Auditor
and discussions with the Chief Financial Officer.
The Committee reviewed the effectiveness of the Group’s internal controls, including enquiry of the Independent Auditor and
concluded that they were appropriate for a business of the size, scale and complexity of i-nexus. The Committee also
determined that a separate internal audit function was not required during the year, but this decision will be kept under review.
The independence and objectivity of the Independent Auditor were considered and found to be satisfactory.
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29
Independence and objectivity
The Committee has a policy that aligns with current ethical standards in 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 LLP that there are no relationships between the Group and Saffery
LLP or its associates that may have a bearing on its independence.
Further details of the audit fees paid, to Saffery LLP for the 2023 and 2022 financial years can be found in note 6 to the
financial statements. To comply with the FRC Revised Ethical Standards 2019 Saffery LLP did not undertake any non-audit
services across the periods covered in this report. Those relating to the Group's Tax services, specifically those relating to the
Tax compliance and advisory services were provided by Azets.
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. During the prior
year the Committee met and approved the appointment of Drew Whibley as a Director from 1 August 2022 following Alyson
Levett’s decision to step down from the Board in order to pursue her career as a pluralist non-executive director.
Consolidated Financial Statements for the year ended 30 September 2023
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CORPORATE GOVERNANCE:
Directors’ Report For the year ended 30 September 2023
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 2023.
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
Simon Crowther
Drew Whibley
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 Group and Company financial statements for each financial year. The Directors
have elected under company law and are required under the Listing Rules of the Financial Conduct Authority to prepare the
Group financial statements in accordance with UK-adopted International Accounting Standards.
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.
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 UK-adopted International Accounting Standards, 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 Group’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 Companies Act 2006. They are also responsible for safeguarding
the assets of the Group and hence for taking reasonable steps for the prevention and detection of fraud and other
irregularities.
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 23 to the financial statements.
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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 2023 remuneration proposals based on what the
Remuneration Committee believe to be appropriate remuneration levels for the Group at its current stage of development.
During the year the salaries of the Directors were increased from 1 July 2023 in conjunction with the review of salaries for the
wider workforce. Simon Crowthers’ salary was increased by 5%, taking this from £190,071 to £199,575 whilst Drew Whibley’s
salary was increased by 8%, taking this from £130,000 to £140,400. The average of these salary increases is aligned with the
increases that were received by the Group’s wider workforce.
Following the Customer Update on 17 October, all of the Directors voluntarily agreed to reduce their remuneration for the
period from 1 October 2023 to 31 December 2023, at which point the position will be reviewed by the Board in light of the
Group’s trading performance during the quarter. Simon Crowthers’ salary decreased by 5% from £199,575 to £189,595 and
Drew Whibley’s by 4.7% from £140,400 to £133,380.
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 being to deliver on the annual budget targets which are
approved at the start of each financial year. In 2023, 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. On 3 October 2022 and
11 November 2022, the Group granted 2,255,343 share options of which 1,044,883 were awarded to Directors. Each award
was granted in the form of an option with an exercise price of 10p per share. The vesting of these options to Directors is
subject to the satisfaction of the performance conditions based on continued employment and a revenue growth target.
396,260 of these awards are subject to vest at the end of 2023 with the remainder at the end of 2024.
Director
Mr S Crowther
Mr D Whibley
Total
Shares subject to award
702,075
342,808
1,044,883
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.
All of the LTIP awards granted to Directors vested in respect of the performance in 2023, with the post year-end non-renewal
of a major legacy impacting the performance conditions of those awards subject to rest in 2024.
Consolidated Financial Statements for the year ended 30 September 2023
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CORPORATE GOVERNANCE:
Directors’ Report continued
Subject to Vesting Vested
award percentage shares
Director
Mr S Crowther 257,273 100% 257,273
Mr D Whibley 138,987 100% 138,987
Total 396,260 100% 396,260
Value
£
–
–
–
The value included in the single total figure of remuneration is based on the estimated vesting outturn and the estimated
value of a share at vesting calculated by reference to the three-month average share price up to 30 September 2023 less the
per share exercise price (10 pence).
Directors’ Remuneration
The remuneration of Directors for the year ended 30 September 2023 and 2022 was as follows
2023
2022
Total cash
Total cash
& cash
& cash
Benefits equivalent
equivalent
Salary in Kind Pension remuneration remuneration
£
Director £ £ £ £
Mr S Crowther 192,455 576 19,244 212,275
Mr R Cunningham 48,000 – 937 48,937
Mr D Firth 30,000 – – 30,000
Mr D Whibley (appointed 1 August 2022) 132,608 329 13,260 146,197
Ms A Levett (resigned 1 August 2022) – – – –
Total 403,063 905 33,441 437,409
195,814
49,253
30,000
23,838
116,547
415,452
In addition to the above remuneration, the directors have been granted share options with fair value as shown in the below
table below. These options are presently out of the money but are ascribed a fair value and included as a component of
directors’ remuneration in line with the requirements of IFRS 2.
2022
2023
Fair value of Total
Total
share options remuneration remuneration
£‘000’s
Director £‘000’s £‘000’s
Mr S Crowther 1,408 213,683
Mr R Cunningham – 48,937
Mr D Firth – 30,000
Mr D Whibley (appointed 1 August 2022) 682 146,879
Ms A Levett (resigned 1 August 2022) – –
Total 2,090 439,499
198,520
49,253
30,000
23,838
118,498
420,109
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33
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
Richard Cunningham
David Firth
30 September 30 September
2023
%
2023
Number
868,475
1,083,100
180,000
2.94
3.66
0.61
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, 2021 and 2023 Fixed Rate Unsecured Convertible Redeemable Loan Notes. His participation
represents a maximum interest of 3,765,000 in new Ordinary Shares that could be issued pursuant to the 2020, 2021 and
2023 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 and Drew Whibley held no external Non-Executive Directorships in the period. Richard Cunningham and David Firth
held those external Non-Executive Directorships detailed on page 24 in the period.
Results and Dividends
The results for the year are set out on page 42 and are also discussed in the Strategic Report. The Directors do not recommend
payment of a dividend (FY22: nil).
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. There were no share
issues and changes to the capital structure during the year.
Consolidated Financial Statements for the year ended 30 September 2023
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34
CORPORATE GOVERNANCE:
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
1 Private Stakeholders (UK)
2 Herald Investment Mgt (London)
3 Abrdn plc
4 Antrak Limited (UK)
5 Gresham House (London)
6 Hargreaves Lansdown plc
7 Bury Fitzwilliam-Lay and Partners LLP (UK)
8 BPCE (Paris)
9 Morgan Stanley
10 Richard Cunningham
30 September 30 September
2023
%
2023
Number
4,693,684
4,031,490
2,906,103
1,852,210
1,582,279
1,487,029
1,459,460
1,250,000
1,149,968
1,083,100
15.87
13.63
9.83
6.26
5.35
5.03
4.94
4.23
3.89
3.66
There were no notified changes in these holdings in the period after year end to the date of signing the financial statements.
Qualifying Indemnity Provision
The Group has in place insurance protection, including a Directors and Officers liability policy, to cover the risk of loss when
management deems it appropriate and cost effective; however in some cases risks cannot be effectively covered by insurance
and the cover in place may not be sufficient to cover the extent of potential liabilities.
Going Concern
After reviewing the Group’s forecasts and projections, the Directors have a reasonable expectation that the Group has
adequate resources to continue in operational existence for the foreseeable future, being a period of at least twelve months
from the date of approval of these financial statements. The Group therefore continues to adopt the going concern basis in
preparing its financial statements. Information used to make this decision is detailed below.
A scenario testing exercise, in which the Directors prepared detailed cash flow forecasts for the period covered by the going
concern forecast, was performed. The forecasts take into account the Directors’ views of current and future economic
conditions that are expected to prevail over the period including assumptions regarding the sales pipeline, future revenues
and costs with various scenarios which reflect growth plans, opportunities, risks and mitigating actions.
Alongside management’s base case forecast, which incorporates the impact of the Customer Update announcement, the
Group prepared an extreme downside scenario where, outside of the deals secured or in contracting, any growth in MRR
across the period would be offset by non-renewals, reducing total billing across recurring and services revenue by £350k.
Under this extreme scenario, the Group has given consideration to the potential actions available to management to mitigate
the impact of these sensitivities, in particular the discretionary nature of certain costs incurred by the Group, alongside the
employment of further mitigating actions in order to ensure the continued availability of funds. Financial performance in 2024
is not expected to be materially impacted from current year levels due to the long-range revenue visibility achieved through
the recurring revenue business model. These recurring revenues, representing 90% of total revenue, are considered resilient
given the majority are on multi- year terms. The forecast also assumed that the Group does not have access to any further
external funding. Based on current trading, the extreme downside scenario is considered very unlikely.
The Group continues to monitor the collection of monies from clients with no material delays in payment being cited. The
business benefits from an Annual Licence Fee Model in which software licence fees are received annually in advance.
i-nexus Global plc
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CORPORATE GOVERNANCE
FINANCIAL STATEMENTS
35
Auditors
The Board are recommending Saffery LLP for re-appointment as auditor of the Company, Saffery 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 2023 AGM on Monday 26 February 2024. The Notice of the Meeting accompanies the
Annual Report and Accounts.
By Order of the Board
Drew Whibley
Director
20 December 2023
Consolidated Financial Statements for the year ended 30 September 2023
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FINANCIAL STATEMENTS:
Independent Auditor’s Report For the year ended 30 September 2023
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 2023 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 the preparation of the group financial
statements is applicable law and UK-adopted international accounting standards. 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 2023 and of the group’s loss for the year then ended;
the group financial statements have been properly prepared in accordance with UK-adopted international
accounting standards;
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.
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 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.
The group manages its operations centrally and has common financial systems, processes and controls covering all significant
components. The audit of both significant components was performed by the Group 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 significant component.
There was one non significant component for which analytical procedures were performed.
Key audit matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial
statements of the current period and include the most significant assessed risks of material misstatement (whether or not
due to fraud) we identified, including those which had the greatest effect on the overall audit strategy, the allocation of
resources in the audit; and directing the efforts of the engagement team. These matters were addressed in the context of
our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate
opinion on these matters.
i-nexus Global plc
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FINANCIAL STATEMENTS
37
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
licencing of
associated
cloud-based
maintenance, support, software customisation
and professional consultancy services.
the development and
and
software
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.
Due to the significance of the going concern
assumption to the financial statements and
the current economic and trading conditions,
going concern is considered to be a key
audit matter.
Our audit procedures included the following:
• We assessed the design and effectiveness of internal controls relating
to revenue recognition;
• We reviewed the revenue recognition policy to ensure compliance with
IFRS 15;
• 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;
• We have substantively tested revenue streams on a sample basis by
reference to purchase orders, customer contracts and time records;
• 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 obtained and 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 for
period in excess of twelve months from the date of approval of these
financial statements;
• 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;
• We performed a range of sensitivity analyses on management’s key
assumptions, assessing the impact of each on the liquidity position;
• 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, to assess that these
disclosures are appropriate.
Based on this and our procedures, we concluded that there is not a
material uncertainty in relation to going concern and that the continued
adoption of the going concern basis of accounting in these financial
statements remains appropriate.
Consolidated Financial Statements for the year ended 30 September 2023
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38
FINANCIAL STATEMENTS:
Independent Auditor’s Report continued
Key Audit Matter How our scope addressed this matter
The recognition, capitalisation and
carrying value of development costs
As detailed in the notes to the financial
statements, the group carries out research and
development relating to internally generated
software. The expenditure that does not meet
the recognition criteria of IAS 38 is expensed to
the consolidated statement of comprehensive
income. The expenditure that meets the
recognition criteria of IAS 38 is capitalised as an
intangible asset and amortised over the period
in which the group expects to benefit from it.
requires annual assessment of
IAS 36
recoverable amounts for all intangible assets.
The determination of recoverable amount is a
judgement requiring assumptions concerning
the future which are subject to estimation
uncertainty. During the period an impairment
charge of £125,585 has been recorded in
respect of these 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 measurement of
recoverable amount all involve judgements. Due
to the inherent subjectivity and judgements
made the recognition, capitalisation and carrying
value of development assets is considered to be
a key audit matter.
Our audit procedures included the following:
• We reviewed the assertions and assumptions made by management
against the criteria for capitalisation set out in 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
determination that certain assets were not available for use at the
reporting date; and
the appropriateness of
• 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
whether any contradictory evidence existed. In addition, we considered
the likelihood of meeting forecasts based upon our understanding of
the business, the trading history of the group and the current prospects.
Separate sensitised calculations were prepared to assess the impact
of variance in assumptions on the recoverable amount of the
individual assets.
Based on our procedures we have concluded that the recognition criteria
have in all material respects 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
the circumstances.
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 £3,892,810 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.
This has led to us identifying this as a key
audit matter.
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 the expected manner of
the recovery and recovery period of the balance;
• We critically appraised management's assessment of recoverable
amount. This included challenging management regarding critical
assumptions, obtaining corroborative evidence and considering
contradictory evidence. We also assessed 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 impairment charge
is materially complete, takes account of all available facts and
circumstances, and is based on a series of assumptions and judgements
which are appropriate to the circumstances.
i-nexus Global plc
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STRATEGIC REPORT
CORPORATE GOVERNANCE
FINANCIAL STATEMENTS
39
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 threshold, 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 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 £106,000 (2022: £85,000). 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 90% (2022: 90%) of the above materiality level.
We agreed with the Audit Committee that we would report to the Committee all individual audit differences in excess of £5,000
(2022: £4,000). We also agreed to report differences below this threshold that, in our view, warranted reporting on
qualitative grounds.
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. Our evaluation of 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 accounting matters’
section above.
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.
Other information
The other information comprises the information included in the annual report, other than the financial statements and our
auditor’s report thereon. The directors are responsible for the other information. 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.
Consolidated Financial Statements for the year ended 30 September 2023
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40
FINANCIAL STATEMENTS:
Independent Auditor’s Report continued
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the group and the parent company and their environment obtained in
the course of the audit, we have not identified material misstatements in the Strategic Report or the Directors’ Report.
We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to
report to you if, in our opinion:
• adequate accounting records have not been kept by the parent company, or returns adequate for our audit have not been
received from branches not visited by us; or
•
the parent company financial statements are not in agreement with the accounting records and returns; or
• certain disclosures of directors’ remuneration specified by law are not made; or
• we have not received all the information and explanations we require for our audit.
Responsibilities of directors
As explained more fully in the Directors’ Responsibilities Statement set out on page 28, 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 company 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.
i-nexus Global plc
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STRATEGIC REPORT
CORPORATE GOVERNANCE
FINANCIAL STATEMENTS
41
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.
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.
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.
further description of our responsibilities
A
www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s report.
is available on the Financial Reporting Council’s website at:
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 LLP
Chartered Accountants
Statutory Auditors
St Catherine’s Court
Berkeley Place
Clifton
Bristol
BS8 1BQ
20 December 2023
Consolidated Financial Statements for the year ended 30 September 2023
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42
Group Statement of Comprehensive Income
For the year ended 30 September 2023
Revenue
Cost of sales
Gross profit
Administrative expenses
Operating loss
Adjusted EBITDA
Depreciation, amortisation, impairment and profit/loss on disposal
Share based payment expense
Investment revenues
Finance costs
Other gains and losses
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
Total items that will not be reclassified to profit or loss
Total other comprehensive income for the year
Total comprehensive income for the year
Notes
4
6
5
11
12
13
14
2023
£
3,527,681
(694,230)
2,833,451
(3,672,313)
2022
£
3,126,804
(666,280)
2,460,524
(3,408,424)
(838,862)
(947,900)
(498,748)
(338,789)
(1,325)
19
(261,060)
117,619
(982,284)
(552,357)
(384,975)
(10,568)
68
(231,288)
73,845
(1,105,275)
226,214
234,391
(756,070)
(870,884)
(47,745)
(47,745)
(486)
(486)
(47,745)
(803,815)
(486)
(871,370)
Profit and total comprehensive income for the financial year is all attributable to the owners of the parent company.
All results are derived from continuing operations.
The notes on pages 49 to 76 form part of these Group financial statements.
Notes
15
2023
£
2022
£
(0.03) (0.03)
(0.03) (0.03)
Earnings per share
Basic
Diluted
i-nexus Global plc
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STRATEGIC REPORT
CORPORATE GOVERNANCE
FINANCIAL STATEMENTS
43
Group Statement of Financial Position
As at 30 September 2023
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
Deferred revenue
Net current liabilities
Non-current liabilities
Trade and other payables
Borrowings
Convertible loan notes
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
16
17
19
24
21
26
24
21
22
29
30
31
32
2023
£
738,847
28,533
767,380
929,812
225,758
79,668
1,235,238
2,002,618
719,529
9,952
1,477,488
2,206,969
(971,731)
421,831
22,435
2,135,108
2,579,374
4,786,343
(2,783,725)
2022
£
915,696
26,413
942,109
781,838
224,000
98,987
1,104,825
2,046,934
682,840
9,707
1,319,674
2,012,221
(907,396)
254,407
32,387
1,766,925
2,053,719
4,065,940
(2,019,006)
2,957,161
7,256,188
(46,355)
21,387
269,622
10,653,881
(23,895,609)
(2,783,725)
2,957,161
7,256,188
1,390
20,062
231,851
10,653,881
(23,139,539)
(2,019,006)
The financial statements were approved by the board of directors and authorised for issue on 20 December 2023 and are
signed on its behalf by:
Mr S P Crowther
Director
The notes on pages 49 to 76 form part of these Group financial statements.
Consolidated Financial Statements for the year ended 30 September 2023
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Company Statement of Financial Position
As at 30 September 2023
2023 2022 As restated
Notes £ £ £ £
Non-current assets
Investments 37 1,683,844 1,682,519
Other receivables 38 2,010,295 5,377,765
3,694,139 7,060,284
Current assets
Trade and other receivables 38 62,597 59,377
Cash and cash equivalents 1,178 545
63,775 59,922
Current liabilities (232,157) (101,746)
Net current assets (168,382) (41,824)
Total assets less current liabilities 3,525,757 7,018,460
Non-current liabilities 39 2,556,939 2,021,332
Net assets 968,818 4,997,128
Equity
Called up share capital 29 2,957,161 2,957,161
Share premium account 30 7,256,188 7,256,188
Equity reserve 31 269,622 231,851
Share option reserve 21,387 20,062
Retained earnings (9,535,540) (5,468,134)
Total equity 968,818 4,997,128
As permitted by s408 Companies Act 2006, the company has not presented its own income statement and related notes.
The company’s loss for the year was £4,067,406 (2022 - £1,923,723).
The 2022 Company Statement of Financial Position was restated to reclassify the Amounts owed by subsidiary undertakings
from current assets to non-current assets, as this reflects the expected realisation of the asset. See note 38 for details.
The financial statements were approved by the board of directors and authorised for issue on 20 December 2023 and are
signed on its behalf by:
Mr S P Crowther
Director
Company Registration No. 11321642
The notes on pages 49 to 76 form part of these Group financial statements.
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Group Statement of Changes in Equity
For the year ended 30 September 2023
Share Foreign Share
Share premium Equity Merger exchange option Retained
capital account reserve reserve reserve reserve earnings Total
Notes £ £ £ £ £ £ £ £
Balance at
1 October 2021 2,957,161 7,256,188 231,851 10,653,881 1,876 12,989 (22,272,150) (1,158,204)
Year ended
30 September 2022:
Loss for the year – – – – – – (870,884) (870,884)
Other comprehensive
income:
Currency translation
differences – – – – (486) – – (486)
Total comprehensive
income – – – – (486) – (870,884) (871,370)
Transactions with owners
in their capacity as owners:
Share option expense
in the year – – – – – 10,568 – 10,568
Share options cancelled – – – – – (3,495) 3,495 –
Total contributions by and
distributions to owners
of the Company
recognised directly in equity – – – – – 7,073 3,495 10,568
Balance at
30 September 2022 2,957,161 7,256,188 231,851 10,653,881 1,390 20,062 (23,139,539) (2,019,006)
Year ended
30 September 2023:
Loss for the year – – – – – – (756,070) (756,070)
Other comprehensive
income:
Currency translation
differences – – – – (47,745) – – (47,745)
Total comprehensive
income – – – – (47,745) – (756,070) (803,815)
Transactions with owners
in their capacity as owners:
Issue of convertible loan 22 – – 37,771 – – – – 37,771
Share option expense in
the year – – – – – 1,325 – 1,325
Total contributions by and
distributions to owners
of the Company
recognised directly in equity – – 37,771 – – 1,325 – 39,096
Balance at
30 September 2023 2,957,161 7,256,188 269,622 10,653,881 (46,355) 21,387 (23,895,609) (2,783,725)
Consolidated Financial Statements for the year ended 30 September 2023
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Company Statement of Changes in Equity
For the year ended 30 September 2023
Share Share
Share premium Equity option Retained
capital account reserve reserve earnings Total
Notes £ £ £ £ £ £
Balance at 1 October 2021 2,957,161 7,256,188 231,851 12,989 (3,547,906) 6,910,283
Year ended 30 September 2022:
Loss and total comprehensive
income for the year – – – – (1,923,723) (1,923,723)
Transactions with owners
in their capacity as owners
Share option expense in the year – – – 10,568 – 10,568
Share options cancelled – – – (3,495) 3,495 –
Total contributions by and
distributions to owners
of the Company
recognised directly in equity – – – 7,073 3,495 10,568
Balance at 30 September 2022 2,957,161 7,256,188 231,851 20,062 (5,468,134) 4,997,128
Year ended 30 September 2023:
Loss and total comprehensive
income for the year – – – – (4,067,406) (4,067,406)
Transactions with owners
in their capacity as owners
Issue of convertible loan 39 – – 37,771 – – 37,771
Share option expense in the year 41 – – – 1,325 – 1,325
Total contributions by and
distributions to owners
of the Company
recognised directly in equity – – 37,771 1,325 – 39,096
Balance at 30 September 2023 2,957,161 7,256,188 269,622 21,387 (9,535,540) 968,818
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Group Statement of Cash Flows
For the year ended 30 September 2023
2023 2022
Notes £ £ £ £
Operating activities
Loss after tax (756,070) (870,884)
Adjusted for non-cash items:
Taxation credit 14 (226,214) (234,391)
Amortisation, depreciation,
impairments and adjustments on disposal 6 338,789 384,975
Share-based payment expense 28 1,325 10,568
Finance income 11 (19) (68)
Deferred Income 157,814 –
Finance charges 12 261,060 231,288
Decrease in provisions (2,751) –
Other gains 13 (117,619) (73,845)
(343,685) (552,357)
(Increase)/decrease in trade and
other receivables 19 (145,223) 10,126
Increase in trade and other payables 24 36,689 20,043
Cash used in operations (452,219) (522,188)
Income tax refunded 224,456 285,391
Net cash outflow from operating
activities (227,763) (236,797)
Investing activities
Purchase of intangible assets -
internally generated 16 (146,374) (136,234)
Purchase of property, plant and
equipment 17 (17,686) (24,443)
Interest received 19 68
Net cash used in investing activities (164,041) (160,609)
Financing activities
Issue of convertible loans 22 436,000 –
Repayment of bank loans 21 (9,707) (71,425)
Interest paid (6,063) (6,899)
Net cash generated from/(used in)
financing activities 420,230 (78,324)
Net increase/(decrease) in cash and
cash equivalents 28,426 (475,730)
Cash and cash equivalents at beginning of year 98,987 575,203
Effect of foreign exchange rates (47,745) (486)
Cash and cash equivalents at end of year* 79,668 98,987
* At the year-end there was £187,389 of cash in transit held in trade receivables. This cash related to trade in the year and
was received 2 October 2023.
The notes on pages 49 to 76 form part of these Group financial statements.
Consolidated Financial Statements for the year ended 30 September 2023
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Note to the Statement of Cash Flows
For the year ended 30 September 2023
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
2022 cash flows element movements* 2023
£ £ £ £ £
Bank loans 42,094 (9,707) – – 32,387
Convertible loan notes 1,766,925 436,000 (37,771) (30,047) 2,135,107
Other loans – – – – –
1,809,019 426,293 (37,771) (30,047) 2,167,494
At
At 1 October Financing Convertible Other 30 September
2021 cash flows element movements* 2022
£ £ £ £ £
Bank loans 50,000 (7,906) – – 42,094
Convertible loan notes 1,782,458 – – (15,533) 1,766,925
Other loans 63,519 (63,519) – – –
1,895,977 (71,425) – (15,533) 1,809,019
*Other movements in the year ended 30 September 2023 includes;
(1) Interest charged to the statement of comprehensive income of £254,997;
(2) Accrued interest payable of £167,425 based on the convertible loan coupon rate of 8%; and
(3) Gain on modification of tranche one of the convertible loan note liability, credited to the statement of comprehensive in-
come of £117,619.
*Other movements in the year ended 30 September 2022 includes;
(1) Interest charged to the statement of comprehensive income of £224,389;
(2) Accrued interest payable of £166,077 based on the convertible loan coupon rate of 8%; and
(3) Gain on modification of tranche one of the convertible loan note liability, credited to the statement of comprehensive in-
come of £73,845.
The notes on pages 49 to 76 form part of these Group financial statements.
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Notes to the Group Financial Statements
For the year ended 30 September 2023
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 United Kingdom 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.
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);
(e) the requirements of IAS 24 ‘Related Party Disclosures’ to disclose related party transactions and balances between two or
more members of a Group; and
(f) disclosure of key management personnel compensation.
As permitted by S408 Companies Act 2006, the Company had not presented its own Statement of Comprehensive Income.
The company’s loss for the period was £4,067,406.
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.
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.
Consolidated Financial Statements for the year ended 30 September 2023
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Notes to the Group Financial Statements continued
For the year ended 30 September 2023
1 Accounting policies (continued)
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 2023. 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
After reviewing the Group’s forecasts and projections, the Directors have a reasonable expectation that the Group has adequate
resources to continue in operational existence for the foreseeable future, being a period of at least twelve months from the
date of approval of these financial statements. The Group therefore continues to adopt the going concern basis in preparing its
financial statements. Information used to make this decision is detailed below.
A scenario testing exercise, in which the directors prepared detailed cash flow forecasts for the period covered by the going
concern forecast, was performed. The forecasts take into account the directors’ views of current and future economic conditions
that are expected to prevail over the period including assumptions regarding the sales pipeline, future revenues and costs with
various scenarios which reflect growth plans, opportunities, risks and mitigating actions.
Alongside management’s base case forecast, which incorporates the impact of the Customer Update announcement, the Group
prepared an extreme downside scenario where, outside of the deals secured or in contracting, any growth in MRR across the
period would be offset by non-renewals, reducing total billing across recurring and services revenue by £350k. Under this extreme
scenario, the Group has given consideration to the potential actions available to management to mitigate the impact of these
sensitivities, in particular the discretionary nature of certain costs incurred by the Group alongside the employment of further
mitigating actions in order to ensure the continued availability of funds.
Financial performance in 2024 is not expected to be materially impacted from current year levels due to the long-range revenue
visibility achieved through the recurring revenue business model. These recurring revenues, representing 90% of total revenue,
are considered resilient given the majority are on multi- year terms. The forecast also assumed that the Group does not have
access to any further external funding. Based on current trading, the extreme downside scenario is considered very unlikely.
The Group continues to monitor the collection of monies from clients with no material delays in payment being cited. The
business benefits from an Annual Licence Fee Model in which software licence fees are received annually in advance.
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.
Payment terms are agreed on a contract by contract basis.
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 straight line
Amortisation of intangible assets is recognised in administrative expenses.
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:
Fixtures and fittings 33% straight line
Computers 33% straight line
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.
Consolidated Financial Statements for the year ended 30 September 2023
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Notes to the Group Financial Statements continued
For the year ended 30 September 2023
1 Accounting policies (continued)
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.
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.
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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.
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.
The Group assesses impairment on a forward-looking basis using the expected credit loss method and has applied the simplified
approach which permits the use of the lifetime expected loss provision for all trade and other receivables. The amount of any
provision is recognised in the income statement within administrative expenses.
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.
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 22).
Derecognition of financial liabilities
Financial liabilities are derecognised when, and only when, the Group’s obligations are discharged, cancelled, or they expire.
Consolidated Financial Statements for the year ended 30 September 2023
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Notes to the Group Financial Statements continued
For the year ended 30 September 2023
1 Accounting policies (continued)
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 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.
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1.16 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.
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 company is demonstrably committed to terminate
the employment of an employee or to provide termination benefits.
1.17 Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
1.18 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 28.
1.19 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 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.
1.20 Grants
Government grants are recognised when there is reasonable assurance that the grant conditions will be met and the grants will
be received and is recorded in other income.
1.21 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 Group’s financial statements:
• Amendments to IAS 37 Onerous Contracts - Cost of Fulfilling a Contract
• Amendments to IFRS 3 Reference to the Conceptual Framework
• Amendments to IAS 16 Property, Plant and Equipment - Proceeds Before Intended Use
• Annual Improvements to IFRS Standards 2018-2020
Consolidated Financial Statements for the year ended 30 September 2023
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56
Notes to the Group Financial Statements continued
For the year ended 30 September 2023
2 Adoption of new and revised standards and changes in accounting policies (continued)
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:
Classification of Liabilities as Current or Non-Current (Amendments to IAS 1) and
Deferral of Effective Date Amendment
Lease Liability in a Sale and Leaseback (Amendments to IFRS 16)
International Tax Reform - Pillar Two Model Rules (Amendments to IAS 12)
Disclosure of Accounting Policies (Amendments to IAS 1 and IFRS Practice Statement 2)
Definition of Accounting Estimates (Amendments to IAS 8)
Deferred Tax related to Assets and Liabilities arising from a Single Transaction
(Amendments to IAS 12 Income Taxes)
IFRS 17 Insurance Contracts
Effective date – period
beginning on or after
1 January 2024
1 January 2024
1 January 2023
1 January 2023
1 January 2023
1 January 2023
1 January 2023
The adoption of all above standards is not expected to have any material impact on the Group’s financial statements.
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.
Critical judgements
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.
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57
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 £8,512,696
(2022 - £4,619,886) 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.
Impairment
During the year, the directors considered the recoverability of the capitalised development costs, which are included in its balance
sheet at £738,847 (2022 - £915,696) after impairment. For individual assets not yet available for use or where indicators of
impairment existed, 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 £125,585 (2022 - £154,689) has been recognised.
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
USA
Switzerland
Germany
Rest of Europe
Rest of the World
2023
£
2022
£
3,235,964
291,717
3,527,681
2023
£
774,825
1,197,292
659,380
550,668
158,393
187,123
3,527,681
2,856,720
270,084
3,126,804
2022
£
716,295
882,707
639,380
538,561
190,976
158,885
3,126,804
During the year there were two key customers (2022 - two key customers) that accounted for over 10% of revenue each.
Revenue for each of these customers is £659,380 and £439,709 respectively (2022 - £639,380 and £324,936 respectively).
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 end of the previous period was £1,250,062 (2022 - £1,030,315), note 26.
The total amount of revenue deferred and recognised as a contract liability at the year end is £1,477,488 (2022 - £1,319,674)
as shown in note 26.
Consolidated Financial Statements for the year ended 30 September 2023
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Notes to the Group Financial Statements continued
For the year ended 30 September 2023
4 Revenue (continued)
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.
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.
5 Adjusted EBITDA
Operating loss
Add back:
Depreciation, amortisation, impairment and profit/loss on disposal
Share based payment expense
Adjusted EBITDA
2023
£
2022
£
(838,862)
(947,900)
338,789
1,325
384,975
10,568
(498,748)
(552,357)
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 Group Statement of Comprehensive Income.
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
Notes
Operating loss for the year is stated after charging/(crediting):
Exchange losses
Research and development costs
Auditor's remuneration 8
Depreciation of property, plant and equipment 17
(Profit)/loss on disposal of property, plant and equipment
Amortisation of intangible assets 16
Impairment of intangible assets 16
Share-based payments 28
2023 2022
£ £
38,240 15,697
640,647 676,504
58,750 54,550
15,566 43,239
– 21,885
197,638 165,162
125,585 154,689
1,325 10,568
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59
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
2023
£
2022
£
125,585
154,689
125,585
154,689
2023
£
2022
£
58,750
54,550
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 and Company 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
Group
2023
Number
9
25
34
Group
2022
Number
Company
2023
Number
Company
2022
Number
9
21
30
2
–
2
2
–
2
2023
£
2,274,723
284,601
168,671
2,727,995
2022
£
1,942,085
251,229
104,623
2,297,937
Included within wages and salaries is £1,325 (2022 - £10,568) relating to equity settled share based payment expense, as
explained further in note 28.
Included in the above is aggregate remuneration relating to capitalised development costs (note 16) amounting to £146,374
(2022 - £136,234).
Consolidated Financial Statements for the year ended 30 September 2023
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60
Notes to the Group Financial Statements continued
For the year ended 30 September 2023
10 Directors’ remuneration
Remuneration for qualifying services
Company pension contributions to defined contribution schemes
2023
£
403,968
33,441
437,409
2022
£
391,281
28,828
420,109
The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to
3 (2022 - 4)
The number of directors who are entitled to receive shares under long term incentive schemes during the year was 2 (2022 - 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 2023 the Directors received remuneration as follows:
Salary
Director £
Mr S Crowther 192,455
Mr R Cunningham 48,000
Mr D Firth 30,000
Mr D Whibley 132,608
Total 403,063
No share options were exercised in the year.
Benefits
in kind
£
576
–
–
329
905
2023
£
193,031
19,244
212,275
Pension
£
19,244
937
–
13,260
33,441
2022
£
182,846
15,674
198,520
Total
£
212,275
48,937
30,000
146,197
437,409
In addition to the above remuneration, the ascribed fair value of the share options, granted to the directors during the current
and prior year, is shown in the following table as a component of directors' remuneration in line with the requirements of
IFRS 2. These options are presently out of the money and the associated growth based vesting conditions have not been met.
Director
Mr S Crowther
Mr R Cunningham
Mr D Firth
Mr D Whibley
Total
i-nexus Global plc
Fair value of
Total
share options remuneration
£
£
1,408
–
–
682
2,090
213,683
48,937
30,000
146,879
439,499
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61
During the year to 30 September 2022 the Directors received remuneration as follows:
Salary Benefits in kind
£
Director £
Mr S Crowther 180,140
Ms A Levett (resigned 1 August 2022) 106,813
Mr R Cunningham 48,000
Mr D Firth 30,000
Mr D Whibley (Appointed 1 August 2022) 21,671
Total 386,624
–
–
–
–
–
–
Pension
£
15,674
9,734
1,253
–
2,167
28,828
Total
£
195,814
116,547
49,253
30,000
23,838
415,452
No share options were exercised in the year.
In addition to the above remuneration, the ascribed fair value of the share options, granted to the directors during the prior
year, is shown in the following table as a component of directors' remuneration in line with the requirements of IFRS 2. These
options are presently out of the money and the associated growth based vesting conditions have not been met. However,
the remuneration committee decided a percentage would vest, even though certain performance conditions were not met,
in recognition of the directors' performance throughout the period to 30 September 2022.
Director
Mr S Crowther
Ms A Levett (resigned 1 August 2022)
Mr R Cunningham
Mr D Firth
Mr D Whibley
Total
11 Investment income
Interest income
Financial instruments measured at amortised cost:
Bank deposits
12 Finance costs
Other interest payable
Interest on convertible loan notes
Fair value of
share options
£
Total
remuneration
£
2,706
1,951
–
–
–
4,657
2023
£
198,520
118,498
49,253
30,000
23,838
420,109
2022
£
19
68
2023
£
6,063
254,997
261,060
2022
£
6,899
224,389
231,288
Consolidated Financial Statements for the year ended 30 September 2023
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62
Notes to the Group Financial Statements continued
For the year ended 30 September 2023
13 Other gains and losses
Other gains
2023
£
117,619
2022
£
73,845
On 30 September 2023, the redemption date of the first and second tranches of convertible loan notes were extended by a
further year (note 22). At this date, the existing liability has been re-calculated as the present value of the revised future cash
flows discounted at the original effective interest rate and a gain of £117,619 has been recognised.
In the prior year, the redemption date of the first tranche of convertible loan notes was extended by a year. At this date the
existing liability was recalculated as the present value of the revised future cash flows discounted at the original effective
interest rate and a gain of £73,845 was recognised.
14 Taxation
Current tax
UK corporation tax on profits for the current period
Adjustments in respect of prior periods
Total UK current tax
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 22.01% (2022: 19%)
Effect of expenses not deductible in determining taxable profit
Income not taxable
Deferred tax not recognised on unutilised tax losses carried forward
Adjustment in respect of prior years
Enhanced relief on research and development tax credit
Surrender of tax losses for R&D tax credit refund
Other
Taxation credit for the year
2023
£
2022
£
(225,758)
(456)
(226,214)
(224,000)
(10,391)
(234,391)
2023
£
(982,284)
(216,201)
(5,158)
(25,886)
78,977
(456)
(237,264)
180,040
(266)
(226,214)
2022
£
(1,105,275)
(210,002)
11,079
(14,031)
203,705
(10,391)
(224,000)
–
9,249
(234,391)
The UK corporation tax rate rose from 19% to 25% on 1 April 2023. The tax rate shown of 22% is a composite figure and
reflects that two different rates were applied during the year.
Deferred tax balances at the reporting date are therefore measured at 25% (2022 - 25%), being the substantively enacted
rate at the balance sheet date.
i-nexus Global plc
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FINANCIAL STATEMENTS
63
15 Earnings per share
Number of shares
Weighted average number of ordinary shares for basic earnings per share
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
2023
2022
29,571,605
29,571,605
2023
£
2022
£
(756,070)
(870,884)
(0.03)
(0.03)
(0.03)
(0.03)
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 28) and convertible redeemable
loan stock (note 22) that could dilute the earnings per share should the Group become profitable. As at 30 September 2023
both the share options and the convertible loan stock are out of the money.
16 Intangible assets
Cost
At 1 October 2021
Additions - internally generated
At 30 September 2022
Additions - internally generated
At 30 September 2023
Amortisation and impairment
At 1 October 2021
Charge for the year
Impairment loss
At 30 September 2022
Charge for the year
Impairment loss
At 30 September 2023
Carrying amount
At 30 September 2023
At 30 September 2022
At 30 September 2021
Development
costs
£
1,582,265
136,234
1,718,499
146,374
1,864,873
482,952
165,162
154,689
802,803
197,638
125,585
1,126,026
738,847
915,696
1,099,313
The useful economic life of each of the individual assets is deemed to be 5 years. The additions in the year of £146,374 relate
to specific products being developed. These products are deemed to provide future economic benefits to the Group.
Consolidated Financial Statements for the year ended 30 September 2023
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Notes to the Group Financial Statements continued
For the year ended 30 September 2023
16 Intangible assets (continued)
For the year ended 30 September 2023, the Group recorded impairment charges of £125,585 in respect of costs capitalised on
developing the pulse application due to the level of current and forecast customer use. All impairment charges are recognised in
the income statement within administrative expenses. The recoverable amount of £134,235 was based on value in use calculations,
with the application of a 12% discount rate being used in both the current and prior year.
Amortisation and impairment charges are recognised within administrative expenses.
17 Property, plant and equipment
Cost
At 1 October 2021
Additions
Disposals
At 30 September 2022
Additions
At 30 September 2023
Accumulated depreciation and impairment
At 1 October 2021
Charge for the year
Eliminated on disposal
At 30 September 2022
Charge for the year
At 30 September 2023
Carrying amount
At 30 September 2023
At 30 September 2022
At 30 September 2021
Fixtures and
fittings
£
Computers
£
Total
£
64,171
648
(54,044)
10,775
500
11,275
31,320
8,300
(32,159)
7,461
2,920
10,381
894
3,314
32,851
291,018
23,795
(235,194)
79,619
17,186
96,805
256,758
34,939
(235,177)
56,520
12,646
69,166
27,639
23,099
34,260
355,189
24,443
(289,238)
90,394
17,686
108,080
288,078
43,239
(267,336)
63,981
15,566
79,547
28,533
26,413
67,111
18 Subsidiaries
Details of the company’s subsidiaries at 30 September 2023 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) Dormant Ordinary –
–
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.
i-nexus Global plc
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65
19 Trade and other receivables
Trade receivables
Cash in transit
Provision for impairment
VAT recoverable
Other receivables
Prepayments
2023
£
580,379
187,389
(1,639)
766,129
42,622
–
121,061
929,812
2022
£
608,560
–
(4,390)
604,170
50,440
2,390
124,838
781,838
Cash in transit represents monies remitted on 29 September 2023 which were received on 2 October 2023. The accounting
policy is to de-recognise a trade receivable when the cash is received and hence this balance is included in trade and other
receivables.
20 Trade receivables - credit risk
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
2023
£
715,209
8,587
13,335
30,637
767,768
2022
£
538,320
18,362
–
51,878
608,560
All opening and closing trade receivables balances arise from contracts with customer. All other receivables outside of general
terms of business are immaterial to the Group and are within the parent 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 2023 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 715,209 8,587
Specific loss allowance – –
Expected credit loss allowance 715 21
0.50%
13,335
–
67
0.75%
30,637
1,639
230
Total
£
767,768
1,639
1,033
Based on the above, the directors have not recognised the expected credit loss allowance 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.
Consolidated Financial Statements for the year ended 30 September 2023
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Notes to the Group Financial Statements continued
For the year ended 30 September 2023
20 Trade receivables - credit risk (continued)
The Group has however recognised a specific provision as follows:
Movement in the allowances for doubtful debts
Balance at 1 October
Allowance (released)/recognised
Balance at 30 September
21 Borrowings
2023
£
4,390
(2,751)
1,639
2022
£
–
4,390
4,390
Current Non-current
2023
£
2022
£
2023
£
2022
£
Borrowings held at amortised cost:
Bank loans 9,952
9,952
9,707
9,707
22,435
22,435
32,387
32,387
The Group had the following borrowings at 30 September 2023:
• 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 £32,387 in the financial statements. This loan is
unsecured.
The directors consider the value of all financial liabilities to be equivalent to their fair value.
22 Convertible loan notes
In 2021, two tranches of convertible loan notes were issued. The first tranche was issued on 4 November 2020 with total
proceeds of £1,325,000 and the second tranche was issued on 29 September 2021 with total proceeds of £650,000. In the
current year, a further tranche was issued with total proceeds of £500,000.
When issued, the first two trances had a redemption date three years, and the third tranche has a redemption date of
two 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, or, convert all or part of their holding of loan notes into fully paid Ordinary Shares at the conversion
rate; and/or redeem all or part of their holding of loan notes.
In respect of the first two tranches, at the issue date the net proceeds received were split between the financial liability element
of £1,743,149 and an equity component of £231,851, representing the fair value of the embedded option to convert the
financial liability into equity. The equity component of the convertible loan notes has been credited to the equity reserve
(note 31).
In respect of the third tranche, at the issue date the net proceeds received were split between the financial liability element
of £462,229 and an equity component of £37,771, representing the fair value of the embedded option to convert the financial
liability into equity. The equity component of the convertible loan notes has been credited to the equity reserve (note 31). The
issue of the third tranche attracted transaction costs to the total of £64,000 which have been deducted from the carrying
amount of the loan notes.
i-nexus Global plc
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FINANCIAL STATEMENTS
67
In the prior year the redemption date of the first tranche was extended by a further year, to give a revised redemption date
of 4 years following the original date of issue, being November 2024. This modification was not considered to be substantial,
as defined in IFRS 9, therefore the existing liability was re-calculated as the present value of the revised future cash flows
discounted at the original effective interest rate. A gain of £73,845 on the modification of the liability has been recognised in
other gains and losses (note 13).
In the current year the redemption date of the first and second tranches were extended by a further year, to give a revised
redemption date of five years and four years following the original date of issue, being November 2025 and September 2025
respectively. This modification was not considered to be substantial, as defined in IFRS 9, therefore the existing liability was
re-calculated as the present value of the revised future cash flows discounted at the original effective interest rate. A gain of
£117,619 on the modification of the liabilities has been recognised in other gains and losses (note 13).
The extension to the redemption date is a modification only of the existing convertible loan notes and therefore has no impact
on the equity element.
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 1 October 2021
Interest charged
Interest accrued
Gain on modification
Liability component at 30 September 2022
Issue of convertible loan notes
Interest charged
Interest accrued
Gain on modification
Liability component at 30 September 2023
Liability component due within 12 months
Liability component due after 12 months
Liability
£
1,782,458
224,389
(166,077)
(73,845)
1,766,925
398,229
254,997
(167,424)
(117,619)
2,135,108
–
2,135,108
Consolidated Financial Statements for the year ended 30 September 2023
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68
Notes to the Group Financial Statements continued
For the year ended 30 September 2023
23 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 2023
Trade and other receivables
Cash and cash equivalents
Trade and other payables
As at 30 September 2022
US Dollars
£
332,658
288
(71,383)
261,563
US Dollars
£
224,217
733
(53,086)
171,864
Euros
£
344,135
–
(27,431)
316,704
Euros
£
338,752
–
(2,632)
336,120
Total
£
676,793
288
(98,814)
578,267
Total
£
562,969
733
(55,718)
507,984
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 2023, the Group would have recognised
an increase in its reported profits and net assets of approximately £57,827 (2022 - £50,798). If Sterling had appreciated by
10% against US Dollars and Euros as at 30 September 2023, the Group would have recognised a decrease in its reported
profits and net assets of approximately £57,827 (2022 - £50,798).
Interest rate risk
The convertible loan notes (note 22) carry a coupon rate of 8% and are recognised at their net present value using a discount
rate of 12%. The 8% interest is fixed for the life of the loan and therefore does not convey interest rate risk for the Group.
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 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.
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FINANCIAL STATEMENTS
69
A maturity analysis of the Group's borrowings, being a Bounce Back Loan Scheme loan and the liability element of the
convertible loan notes, is shown below:
Less than one year
One to two years
Two to five years
Capital risk management
2023
£
9,952
1,055,075
1,166,467
2,231,494
2022
£
9,707
9,950
1,789,362
1,809,019
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.
Further disclosures for credit risk are shown in note 20.
The carrying amount of financial instruments is shown below:
Financial assets held at amortised cost
Financial liabilities held at amortised cost
2023
£
2022
£
578,740
(3,206,970)
606,560
(2,576,928)
(2,628,230)
(1,970,368)
Consolidated Financial Statements for the year ended 30 September 2023
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70
Notes to the Group Financial Statements continued
For the year ended 30 September 2023
24 Trade and other payables
Current Non-current
2023
£
2022
£
2023
£
2022
£
Trade payables 287,252
Accruals 241,596
Social security and other taxation 165,885
Other payables 24,796
719,529
255,570
186,504
169,495
71,271
682,840
25 Deferred taxation
Deferred tax liabilities
Deferred tax assets
–
421,831
–
–
421,831
2023
£
(188,928)
188,928
–
–
254,407
–
–
254,407
2022
£
231,700
(231,700)
–
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 2021 287,000 (400,976)
Deferred tax movements in prior year
Charge/(credit) to profit or loss (284,300) 178,676
Deferred tax liability/(asset) at
1 October 2022 2,700 (222,300)
Deferred tax movements in current year
Charge/(credit) to profit or loss 1,516 38,236
Deferred tax liability/(asset) at
30 September 2023 4,216 (184,064)
Retirement
benefit
obligations
£
Capitalised
R&D
£
Total
£
(6,200)
120,176
(3,200)
108,824
(9,400)
229,000
4,536
(44,288)
(4,864)
184,712
–
–
–
–
–
The Group has estimated tax losses of £9,992,330 (2022 - £10,700,000) of which approximately £9,236,620 (2022 - £9,800,000)
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 £2,314,109 (2022 - £2,400,000).
i-nexus Global plc
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FINANCIAL STATEMENTS
71
26 Deferred revenue
Arising from contracts with customers
All deferred revenues are expected to be settled within 12 months from the reporting date.
27 Retirement benefit schemes
Defined contribution schemes
Charge to profit or loss in respect of defined contribution schemes
Capitalised as intangible asset
2023
£
2022
£
1,477,488
1,319,674
2023
£
119,800
48,871
168,671
2022
£
75,150
29,473
104,623
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 £19,726 (2022 - £38,113).
28 Share-based payment transactions
Number of share Weighted average
options exercise price
2023
2022
2023
£
2022
£
Outstanding at 1 October 2022 701,796
Granted in the period 2,255,341
Forfeited in the period (69,666)
Lapsed in the period –
Outstanding at 30 September 2023 2,887,471
Exercisable at 30 September 2023 1,491,314
2,390,060
–
(99,820)
(1,588,444)
701,796
701,796
0.10
0.10
0.10
–
0.10
0.10
0.10
–
0.10
0.10
0.10
0.10
The options outstanding at 30 September 2023 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.
The 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 has been based on the rate of comparable government bonds available as at the grant date.
Six tranches of new share options were granted during the current year. The weighted average fair value of the options on
the measurement date was £41,988. Fair value was measured using the Black-Scholes Option-pricing model, with the volatility
input being based solely on the Group's average historical volatility over equivalent recent periods. The risk-free rate is the
rate of comparable government bonds available as at the grant date.
Consolidated Financial Statements for the year ended 30 September 2023
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72
Notes to the Group Financial Statements continued
For the year ended 30 September 2023
28 Share-based payment transactions (continued)
Inputs were as follows:
Weighted average share price
Weighted average exercise price
Expected volatility
Expected life
Risk free rate
Expected dividends yields
There were no new share options granted in the comparative period.
Expenses
Related to equity settled share based payments
2023
2022
£0.0339
£0.1
48% - 64%
1 - 2 years
3.1% - 4.0%
–
–
–
–
–
–
–
2023
£
2022
£
1,325
10,568
During the year a transfer of £nil (2022 - £3,495) was made from the share option reserve to retained earnings in relation to
share options cancelled.
29 Share capital
2023
Ordinary share capital Number
2022
Number
2023
£
2022
£
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.
30 Share premium account
At the beginning and end of the year
2023
£
2022
£
7,256,188
7,256,188
The share premium represents the excess of the subscription price over the par value of shares issued.
31 Equity reserve
At the beginning of the year
Arising in the year
At the end of the year
i-nexus Global plc
2023
£
231,851
37,771
269,622
2022
£
231,851
–
231,851
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FINANCIAL STATEMENTS
73
During the prior years 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.
On 7 July 2023, i-nexus Global Plc issued a further £500,000 fixed rate unsecured convertible redeemable loan stock.
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 22.
32 Other reserves
Merger reserve
2023
£
2022
£
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
2023
£
(46,355)
2022
£
1,390
The foreign exchange reserve relates to the exchange differences arises on the translation of the foreign subsidiary.
33 Events after the reporting date
On 16 October 2023, the business was informed that a major legacy customer, the last using the older, highly customised
version of the i-nexus software, currently generating Monthly Recurring Revenue (“MRR”) of £54k, does not intend to renew
its contract at the calendar year-end. The Board has rapidly put in place mitigating actions such that the impact on the Group’s
cash flows is minimised and the adjusted EBITDA breakeven position can be substantially preserved.
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
2023
£
1,047,952
86,007
409
1,134,368
2022
£
897,333
54,317
7,242
958,892
Mr R Cunningham, a director of the Company, subscribed for convertible loan notes from the company and proceeds of
£30,000 (2022: nil) were received and shown within note 22. The loan balance outstanding at the year end was £317,500
(2022: £287,500). The interest charge attributable to these loan notes amounted to £36,419 (2022: £31,879) and is payable
on redemption. The cumulative value of unpaid interest included within creditors amounted to £64,718 (2022: £54,716).
35 Controlling party
There is no ultimate controlling party of i-nexus Global Plc.
Consolidated Financial Statements for the year ended 30 September 2023
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74
Notes to the Group Financial Statements continued
For the year ended 30 September 2023
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
37 Investments
2023
£
2022
£
3,892,810
1,724,886
Current Non-current
2023
Company £
2023
£
2022
£
2022
£
Investments in subsidiaries –
Capital contribution –
–
–
–
–
1,654,770
29,074
1,683,844
1,654,770
27,749
1,682,519
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 18.
Movements in non-current investments
Cost or valuation
At 1 October 2022
Additions regarding share based payment
At 30 September 2023
Shares in
subsidiaries
£
Capital
contribution
£
Total
£
1,654,770
–
1,654,770
27,749
1,325
29,074
1,682,519
1,325
1,683,844
Carrying amount
At 30 September 2023
At 30 September 2022
1,654,770
1,654,770
29,074
27,749
1,683,844
1,682,519
i-nexus Global plc
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FINANCIAL STATEMENTS
75
38 Trade and other receivables
Current Non-current
2023
2023
Company £
VAT recoverable 16,913
Amounts owed by subsidiary undertakings –
Prepayments 45,684
62,597
2022
As restated
£
–
–
59,377
59,377
2022
As restated
£
–
5,377,765
–
5,377,765
£
–
2,010,295
–
2,010,295
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 22.
Carrying value of convertible loan note
Accrued interest on convertible loan note
40 Trade and other payables
2023
£
2,135,108
421,831
2,556,939
2022
£
1,766,925
254,407
2,021,332
Current Non-current
2023
Company £
2022
£
2023
£
2022
£
Trade payables 144,313
Amounts owed to fellow group undertakings 64,000
Accruals 17,564
Social security and other taxation 6,036
Other payables 244
84,419
–
10,644
6,196
487
–
–
421,831
–
–
232,157
101,746
421,831
–
–
254,407
–
–
254,407
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 28.
Consolidated Financial Statements for the year ended 30 September 2023
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76
Company Information
Directors
Mr S P Crowther
Mr R H Cunningham
Mr D S P Firth
Mr D D Whibley
Secretary
Mr D D Whibley
Company number
11321642
Registered Office
Auditor
27-28 Eastcastle Street
London
W1W 8DH
Saffery LLP
St Catherine’s Court
Berkeley Place
Clifton
Bristol
BS8 1BQ
i-nexus Global plc
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