Annual Financial Report
DXS INTERNATIONAL PLC
ANNUAL
RESULTSfor the year ended
30 April 2022
The Board of DXS International plc (“the
Company”), the AQSE Growth Market quoted healthcare information and
digital clinical decision support systems provider, is pleased to
announce its audited Final Results for the year ended 30 April
2022.
The company has had a challenging year. The
principal contributing factors were a one-off EU order which, as
anticipated, was not repeated in this year and the NHS
restructuring the primary care system. The current 106 CCGs
(Clinical Commissioning Groups) are being merged into 42 ICBs
(Integrated Care Boards) which range from one to nine CCGs per ICB.
During this change process, as the ICBs have rationalised their CCG
groups and Digital Tools being used, some customers were lost.
Equally an opportunity exists to gain new clients.
In the period, turnover, although generally
robust, decreased by 8% to £3,285,050 (2021: £3,605,766). As a
result of the reduced turnover, the Company produced an Operating
Loss of £57,776 (2021: a profit of £288,016). However, the Company
managed to produce a Profit after tax although this was reduced to
£222,250 compared to £496,913 in the previous year. Cash at bank at
the period end was £452,329 (2021: £792,318).
The drop in turnover is being addressed and has
already been reduced by £60,000 p.a. after the period end as some
clients have renewed their current agreements at an increased
annual license fee.
The Covid-19 pandemic continues to place a huge
strain on the NHS creating a massive backlog of usual care
treatment. While the Covid-19 situation, as far as hospital
admissions are concerned, has significantly eased, the number of
recognised cases since March 2022, although now declining, have
been at their highest levels ever, bringing new challenges for the
NHS. Coupled with the restructuring in England of 106 CCGs
(Clinical Commissioning Groups) into 42 ICBs (Integrated Care
Boards) is the organising of 7,000 GP practices into 1,250 PCNs
(Primary care Networks). For NHS digital solution providers such as
ourselves, the current state of disruption in our main market
presents significant challenges in gaining access to procurement
decision-makers.
On the positive side, both Covid and the ensuing
health demand aftermath has spotlighted the importance of using
digital and other technologies to drive greater health care
delivery efficiency and effectiveness. We believe that after many
years of lagging behind other industry sectors regarding the
adopting of digital technologies, health care systems have finally
come alive to the potential benefits digital solutions offerings to
both providers and patients.
During the past 24-months, we have continued to
significantly invest in development and innovation of our existing
and new Digital AI solutions which strongly align with the NHS and
global healthcare providers strategy of Digital First. Our
development and marketing programs feature two key product
lines:
- We are
continuing with the improvement of our existing DXS Point of Care
solution which will take this product to the cloud and ensure that
it offers our existing and new customers super digital
functionality in line with their needs. An exciting development is
the conclusion of an agreement with an established AI middleware
provider, a spinout company from Oxford University, University
College London and Cancer Research UK to help develop the Company’s
AI offerings. Not only has this negated the need for DXS to build a
complex AI layer within our new Point of Care Cloud Solution, this
AI solution takes our future offer to a new level. This highly
sophisticated AI-based platform and applications can be used in
numerous clinical environments to bring significant clinical
compliance benefits and ROI.
- With regards to
the therapeutic management of long-term conditions, where a
significant percent of healthcare costs are incurred, we continue
with our sales and marketing efforts to GP Practices, Primary Care
Networks and the newly formed ICB’s. Although the uptake is
frustratingly slow, we are at varying stages of progress of getting
our hypertension solution trials active across nine ICB’s
(Integrated Care Boards) representing almost thirteen million
registered patients. In parallel to this direct approach, we are
actively engaged with various AHSN’s (Academic Health Science
Networks) to help provide endorsement of the potential benefits of
ExpertCare to the UK healthcare sector. Hypertension, which affects
16 million people in the UK, has been our first long term condition
to be added to the engine which aligns with the NHS priority of
better managing cardiovascular disease, particularly when,
according to the Royal College of GPs, there is a backlog of two
million untreated hypertensive patients – an iceberg under the
water.
During the past year, we have increased our
development and sales and marketing efforts into our digitally
systemised AI solutions and we are on track to achieve the
aggressive growth in the UK healthcare market that we have been
planning and preparing for.
Yet, while this market penetration has been
slower than expected, the past two and a half years have changed
the healthcare landscape for ever. It has changed the mindset of
clinicians to the reality and potential benefits of collaborating
remotely with patients. Now it is up to digital healthcare
companies like DXS with world beating AI solutions to provide
healthcare workers with the tools they so desperately need. Tools
that will save lives, optimise clinician resource, and dramatically
cut soaring healthcare costs.
According to Public Health England, the NHS, in
England alone, could save £90 million annually on reduced heart
attacks and strokes by optimally managing hypertension! We have the
tools to significantly contribute towards achieving this. Consider
the additional impact by adding Diabetes, Atrial Fibrillation,
Cholesterol, COPD and Asthma to name a few. Therefore, it is
imperative that we continue with an accelerated investment program
into focused development of additional long-term conditions and an
aggressive sales and marketing campaign. With solutions, such as
ours, with high barriers to entry but easily scalable to
international territories the opportunity for significant growth is
clear.
Our existing solution DXS Point of Care, coupled
with new Aios cloud-based AI capability, and our new long term
condition medicine management solution ExpertCare place us firmly
in the health care AI domain and provides us with real world
capabilities and market appeal.
Having accepted that the past thirty months have
been challenging, we remain focused on growing our revenue and
profits and believe that we are now well positioned to take our
business to new heights with a range of advanced and highly
competitive clinical decision support solutions that can deliver
measurable ROI supported by an exceptional team of people, a
winning formula.
We are slowly gaining ground and remain
extremely positive about the real benefits our solutions, both
existing and new, can provide to healthcare providers locally and
internationally.
David Immelman, Chief Executive of DXS commented:
“Although the past two-and-a-half years have
been challenging, we remain more optimistic than ever about the
prospects of significant future growth for DXS, both in the UK and
Internationally.
This enthusiasm is fuelled by the global
healthcare sector having no alternative but to embrace new ways of
working such as remote and virtual consultations and improving
efficiencies to manage huge backlogs of patient care. The health
care market is now showing unequivocal signs that healthcare
organisations and clinicians have accepted that digital health
solutions are essential to achieving improved healthcare delivery
and outcomes. And that data is fast becoming a key driver of
enhanced efficiencies.
DXS’ vision and belief in investing in SMART
Expert digital solutions, that align with current market needs,
puts us in a strong position to begin seeing the revenue growth we
have been planning for and emphatically believe we will achieve.
While access to healthcare decision makers, against the current
backdrop of NHS restructuring and pandemic residual, remains
challenging, we are making progress on the sales and marketing
front.
All of this is supported by an amazing and
enthusiastic team who have the vision and belief of our direction
of travel and the competence to achieve the goals we have set for
this business.”
The Directors of DXS International plc accept
responsibility for this announcement.
Contacts :
David
Immelman 01252
719800DXS International plcwww.dxs-systems.com
AQSE Corporate BrokerHybridan
LLP 020 3764
2341Claire Louise Noyce
Corporate AdvisorCity &
Merchant 020 7101
7676David Papworth
Notes to Editors
About DXS:
DXS International presents up to date treatment
guidelines and recommendations, from Clinical Commissioning Groups
and other trusted NHS sources, to doctors, nurses and pharmacists
in their workflow and during the patient consultation. This
effective clinical decision support ultimately translates to
improved healthcare outcomes delivered more cost effectively and
which should significantly contribute towards the NHS achieving its
projected efficiency savings.
The following information is extracted from the
DXS International plc audited accounts for the year ended 30 April
2022.
REPORT OF THE DIRECTORS
The directors present their annual report and
the audited financial statements for the year ended 30 April 2022.
The Chairman’s statement which is included in this report includes
a review of the achievements of the Company, the trading
performance, financial position, and trading prospects.
DIRECTORS
The directors for the year were:
- Bob Sutcliffe –
Chairman
- David Immelman –
CEO
- Steven Bauer –
COO
PRINCIPAL ACTIVITIES
The group's principal activities during the
period were the development and distribution of clinical decision
support to General Practitioners, Nurses, and Retail Pharmacies in
the United Kingdom. The commercial side included the licensing of
DXS to various Clinical Commissioning Groups (CCGs) and the sale of
e-detailing opportunities to the Pharmaceutical Industry.
The group continues to invest in research and
development both locally and internationally and during this
financial year has invested £1,284,961 into R&D for the
introduction, continuation, and completion of a number of new DXS
solutions. These are targeted at providing clinicians and patients
with solutions to long term conditions. These products are aligned
with the NHS strategy of “Connected Care” and the hypertension
solution, ExpertCare, and the specialised template and toolkit
solution, CompleteCare, while delayed due to COVID-19, are market
ready.
During the period we repaid £164,512 on bank and
third-party loans.
FINANCIAL INSTRUMENTS
The Directors believe that there is no material
risk arising in respect of interest rates on loans, credit, and
liquidity.
DIVIDEND
The Directors do not recommend a dividend.
DIRECTORS’ RESPONSIBILITIES
The directors are responsible for preparing the
financial statements for each financial year. The directors have
elected to prepare the financial statements in accordance with
United Kingdom Generally Accepted Accounting Practice (United
Kingdom Accounting Standards and applicable law). 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 Company and of the profit or loss of the Company for
that period. In preparing these financial statements, the directors
are required to:
- Select suitable
accounting policies and apply them consistently.
- Make judgments and
accounting estimates that are reasonable and prudent.
- State whether UK
accounting principles have been followed subject to any material
departures disclosed and explained in the financial statements
and,
- Prepare the
financial statements on the going concern basis unless it is
inappropriate to presume that the Company will continue in the
business.
The directors are responsible for keeping
adequate accounting records that are sufficient to show and explain
the Company's transactions and disclose with reasonable accuracy at
any time the financial position of the 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
Company and hence for taking reasonable steps for the prevention
and detection of fraud and other irregularities.
DIRECTORS’ RESPONSIBILITIES TO
AUDITORS
The directors have taken all the necessary steps
that they ought to have taken as directors in order to make
themselves aware of all relevant audit information and to establish
that the Company's auditors are aware of that information.
As far as the directors are aware, there is no
relevant audit information of which the Company’s auditor is
unaware.
Approved by the board and signed on its behalf
by:
D A ImmelmanDirector
8th August 2022
STRATEGIC REPORT
SECTION 172 REPORT
Section 172 of the Companies Act requires that a
director of the Company is managing in the best interests of all
stakeholders – Customers, Employees and Shareholders.
In the spirit of above, the Directors of DXS
International plc, strive to maintain a reputation for high but
fair standards in the best interest of its stakeholders.
Our primary focus is on our customers and here
we regard our relationships and channels of communications of
paramount importance. We operate in a sensitive environment,
healthcare, and as such ensure that we meet all the standards
required by our customers, such as Information Governance and
Clinical Safety. In addition, we comply with ISO standards which
assures an overarching good governance approach to all
operations.
The Board is focused on delivering value for
Shareholders underpinned by motivated Employees delivering above
average delivery of solutions and service to Customers. In
achieving the foregoing, the Company focuses on continued
innovation via a policy of research and development funded through
organic investment plus capital raises, as agreed at shareholder
meetings, noting it has not as a Company raised any external equity
financing in the year to April 2022, and supported by clearly
communicated vision and direction.
In our communication to Shareholders the Board
is clear in terms of its short, medium, and long-term strategy and
maintains an open-door approach to Shareholders seeking additional
clarity on any issue. The Board release notices on a regular basis
informing Shareholders of developments in areas of business
progress, non-confidential strategic decisions, and any change to
company policy. Risks and opportunities are set out in this
strategic review.
The Group is small and while clear management
structures are in place all Employees, if required, have direct
access to the Executive Directors on a daily basis and, if
necessary, to the Chairman. The group retains HR services to ensure
the fair and equitable treatment of Employees. The Company promotes
a policy of promoting from within supported by training and
mentorship. We encourage diverse thinking and recognise strengths
and contribution to the business.
REVIEW OF THE GROUPS
BUSINESS
The Group Profit after Tax is £222,250 (2021 -
£496,913). The Operating (loss)/Profit amounts to (£57,776) (2021
£288,016). There was a reduction in amortisation of £320,394 to
£660,289. The Group has a credit of £320,985 for UK Corporation Tax
(2021 credit- £243,240) for the year.
The profit after tax for the year decreased by
£274,663 after a significant investment into R&D of £1,284,961.
Considering the overall impact of COVID-19, revenue remained robust
with a decrease of 8% in revenue. Of this 3% was due to a one-off
EU sale in the previous year. As an accredited NHS solutions
provider, DXS has well-established business continuity and disaster
recovery protocols in place. These ensured business continuity
throughout the COVID-19 pandemic and at this point, staff, both in
the United Kingdom and South Africa are returning to the office
albeit in a controlled way and the Company remains fully
operational.
The expected revenue increase due to increased
pricing as a result of GPITF accreditation has not materialised as
expected due to operational NHS delays. These are now becoming
effective after April 2022 and as a result £60,000 annual recurring
revenue has been added. This is expected to continue over the
coming months.
We have continued the development of our
existing DXS Point of Care solution into our new Aios cloud-based
system. Coupled with this has been the recent conclusion of a JV
agreement with a leading AI middleware provider, enabling us to
include this Oxford born AI module with Aios.
We have continued to use the delays in
commercialisation caused by COVID to add certain enhancements to
our ExpertCare hypertension solution which we believe will increase
the attractiveness of our offering and pricing in our favour as the
market slowly reopens for business as usual.
Our strategy remains aligned with both the new
NHS Long Term Plan and opportunities abroad.
PRINCIPAL RISKS AND
UNCERTAINTIES
The principal risk to the Company in the UK is
that the NHS dramatically changes its plans or cuts its budgets.
This seems unlikely, particularly with the current pandemic
highlighting the need for clinicians to operate using digital
technologies. We are also confident that our new Aios and
ExpertCare solutions will play a significant role in assisting
already overloaded clinicians to manage patient backlogs as the
situation begins to normalise.
Failure to achieve predicted quantities of DXS
contracts, and slower development of additional revenue streams may
result in revenues growing more slowly than anticipated. These may
be mitigated due to the launch of market ready new products once
the current situation normalises.
While the NHS begins to normalise, even though
current COVID levels are at their highest ever, we are beginning to
engage on a commercial level – even if slowly.
Our plans for expansion outside of the UK
mitigate this risk. Here we continue with our research and
development plans to take our new Expert Hypertension solution into
international markets where improved management of Hypertension and
other long-term conditions are a top priority. In this regard, we
are in discussion with both an EU and South African healthcare
company to white label ExpertCare for these territories.
ANALYSIS OF BUSINESS DURING YEAR ENDING
APRIL 2022
Revenue was 16% below market expectations,
decreasing by £320,716 while Operating Profit decreased by
£345,792. Decreased revenue was attributable to the one off EU sale
of £110,000 in the previous year and a loss of two clients due to
NHS restructuring.
FINANCIAL METRICS
- Group Revenue of
£3,285,050 has decreased by 8%. Definition: Total Group sales
including distribution of clinical decision support to General
Practitioners and the licensing of DXS to CCGs and healthcare
publishers. Group Revenue includes the sale of medicine education
slots to the pharmaceutical industry.
- Underlying Group
Profit after Tax was £222,250, a 55% decrease. This was mainly due
to a reduction of turnover and increased costs. Definition:
Underlying profit provides information on the underlying
performance of the business.
- Depreciation and
amortisation of deferred Research and Development expenditure and
Goodwill in 2022 was £660,280 and in 2021 was £980,683.
- Earnings Per Share
2022 0.5p, 2021 1.0p. Definition: Earnings per share is the
underlying profit divided by the weighted average number of
ordinary shares in issue.
- ROE 2022 5 %, 2021
12%. Definition: Return on Equity (ROE) is the ratio of net profit
of a company to its shareholders funds. It measures the
profitability of a company by expressing its net profit as a
percentage of its shareholders funds which include share capital,
share premium, provision for costs of share option awards and
retained earnings.
CORPORATE GOVERNANCE
We are committed to establish, maintain, and
continually improve an Integrated Management System (IMS) that
conforms to ISO 22301:2012, ISO 20000-1:2018 and ISO 27001:2013
requirements.
To achieve this objective, we commit to:
- continual
improvement in our performance and services to our
stakeholders.
- Identify, assess,
reduce, and eliminate hazards and risks pertaining to our
business.
- Setting risk-based
objectives and targets to meet applicable statutory, business,
information security and service level obligations.
- Comply with
mutually agreed quality and service level requirements of our
customers
- Develop our people
and provide sufficient resources to meet our objectives and
targets.
We communicate the IMS Policy to all personnel
working for or on behalf of DXS to ensure that they are made aware
of their individual IMS obligations.
Approved by the board and signed on its behalf
by:
D Immelman
Director
8th August 2022
FINANCIAL STATEMENTS
INCOME STATEMENT
Year ended 30 April
2022
|
|
2022Continuing
Operations |
|
2021Continuing
Operations |
|
|
|
|
|
|
|
£ |
|
£ |
Turnover |
|
3,285,050 |
|
3,605,766 |
Cost of
Sales |
|
(412,904) |
|
(419,757) |
|
|
_________ |
|
_________ |
Gross Profit |
|
2,872,146 |
|
3,186,009 |
Administration
Costs |
|
(2,269,633) |
|
(1,917,310) |
Depreciation and
Amortisation |
|
(660,289) |
|
(980,683) |
|
|
_________ |
|
_________ |
Operating
profit |
|
(57,776) |
|
288,016 |
Sundry
income |
|
2,153 |
|
9,539 |
|
|
_________ |
|
_________ |
|
|
(55,623) |
|
297,555 |
Interest
payable and similar expenses |
|
(43,022) |
|
(43,882) |
|
|
_________ |
|
_________ |
Profit on
ordinary activities before taxation |
|
(98,645) |
|
253,673 |
Tax on profit
on ordinary activities |
|
320,895 |
|
243,240 |
|
|
_________ |
|
_________ |
Profit for the
year |
|
222,250 |
|
496,913 |
|
|
========= |
|
========= |
Profit per share |
|
|
|
|
|
|
0.5p |
|
1.0p |
|
|
0.5p |
|
1.0p |
|
|
========= |
|
========= |
Statement of Other Comprehensive Income
Year ended 30 April 2022
|
|
2022£ |
|
2021£ |
|
|
|
|
|
Profit for the
year |
|
222,250 |
|
496,913 |
Other
comprehensive income |
|
- |
|
- |
Tax
on components of other comprehensive income |
- |
|
- |
|
|
_________ |
|
_________ |
Total comprehensive income for the year |
222,250 |
|
496,913 |
|
|
========= |
|
========= |
Statement of Financial Position
Year ended 30 April 2022
|
Group 2022 |
Group 2021 |
Company
2022 |
Company
2021 |
|
|
£ |
£ |
£ |
Fixed
Assets |
|
|
|
|
Intangible
Assets |
5,183,683 |
4,557,969 |
- |
- |
Tangible Assets |
2,645 |
1,333 |
- |
- |
Investments |
|
- |
2,815,831 |
2,348,899 |
|
_________ |
_________ |
_________ |
_________ |
|
5,186,328 |
4,559,302 |
2,815,831 |
2,348,899 |
|
_________ |
_________ |
_________ |
_________ |
Current
assets |
|
|
|
|
Debtors: amounts
falling due within one year |
693,702 |
850,258 |
32,762 |
43,471 |
Cash at bank and in
hand |
452,379 |
792,318 |
195,800 |
642,377 |
|
_________ |
_________ |
_________ |
_________ |
|
1,146,081 |
1,642,576 |
228,562 |
685,848 |
Creditors: amounts
falling due within one year |
(889,761) |
(951,673) |
(50,478) |
(38,227) |
|
_________ |
_________ |
_________ |
_________ |
Net current
assets |
256,320 |
690,903 |
178,084 |
647,621 |
|
_________ |
_________ |
_________ |
_________ |
|
|
|
|
|
Total assets less
current liabilities |
5,442,648 |
5,250,205 |
2,993,915 |
2,996,520 |
|
|
|
|
|
Creditors: |
|
|
|
|
Amounts falling due
after more than one year |
(331,330) |
(449,125) |
- |
- |
Deferred
income |
(746,676) |
(653,688) |
- |
- |
|
_________ |
_________ |
_________ |
_________ |
|
4,364,642 |
4,147,392 |
2,993,915 |
2,996,520 |
|
========= |
========= |
========= |
========= |
Capital and
reserves |
|
|
|
|
Called up share
capital |
159,246 |
159,246 |
159,246 |
159,246 |
Share Premium |
2,676,321 |
2,676,321 |
2,676,321 |
2,676,321 |
Share option
reserve |
173,808 |
173,808 |
173,808 |
173,808 |
Retained
earnings |
1,360,267 |
1,138,017 |
(10,460) |
(12,855) |
|
_________ |
_________ |
_________ |
_________ |
Shareholders’
funds |
4,364,642 |
4,147,392 |
2,993,915 |
2,996,520 |
|
========= |
========= |
========= |
========= |
|
|
|
|
|
As permitted by Section 408 of the Companies Act 2006, the
Income Statement of the parent company is not presented as part of
these financial statements. The Company made a profit of £20,475
(2020 - £80,099) for the year.
The financial statements were approved and
authorized for issue by the Board on 8th August 2022.
D ImmelmanDirector |
S BauerDirector |
Company Registration number
: 06311313
STATEMENT OF CASH FLOWS
Year ended 30 April
2022
|
|
Group2022 |
|
Group
2021 |
|
|
£ |
|
£ |
Cash flow from
operating activities |
|
907,862 |
|
1,088,409 |
Interest
paid |
|
(43,022) |
|
(43,882) |
Sundry
Income |
|
2,153 |
|
9,539 |
R&D tax
credit received |
|
249,895 |
|
186,240 |
|
|
_________ |
|
_________ |
Net cash flow
from operating activities |
|
1,116,888 |
|
1,240,306 |
|
|
_________ |
|
_________ |
|
|
|
|
|
Cash flow from
investing activities |
|
- |
|
- |
Payments to
acquire intangible fixed assets |
|
1,284,961 |
|
(1,529,762) |
Payments to
acquire tangible fixed assets |
|
(2,354) |
|
(1,707) |
|
|
_________ |
|
_________ |
|
|
(1,287,315)_________ |
|
(1,531,469)_________ |
Financing
Activities |
|
- |
|
|
Expense in
respect of share issue in February 2020 |
|
(5,000) |
|
- |
Repayment of
long term loans |
|
(164,512) |
|
(117,164) |
Advance of
long term loans |
|
- |
|
190,000 |
|
|
_________ |
|
_________ |
|
|
(169,512) |
|
72,836 |
|
|
_________ |
|
_________ |
|
|
|
|
|
Net (decrease)
in cash and cash equivalents |
|
(339,939) |
|
(218,327) |
Cash and Cash
equivalents at 1 May 2021 |
|
792,318 |
|
1,010,645 |
|
|
_________ |
|
_________ |
Cash and Cash
equivalents at 30 April 2022 |
|
452,379 |
|
792,318 |
|
|
========= |
|
========= |
Cash and Cash
equivalents consists of: |
|
|
|
|
Cash at bank
and in hand |
|
452,379 |
|
792,318 |
|
|
========= |
|
========= |
|
|
|
|
|
|
|
|
|
|
Net Debt
Reconciliation |
Current Debt |
Non Current Debt |
Cash |
Total |
|
£ |
£ |
£ |
£ |
At 30 April
2020 |
(420,131) |
(376,289) |
1,010,645 |
214,225 |
Cash Flow |
212,992 |
(72,836) |
(218,327) |
(78,171) |
|
_________ |
_________ |
________ |
_________ |
At 30 April
2021 |
(207,139) |
(449.125) |
792,318 |
136,054 |
Cash Flow |
(85,993) |
117,795 |
(339,939) |
(308,137) |
|
_________ |
_________ |
________ |
_________ |
At 30 April
2022 |
(293,132) |
(331,330) |
452,379 |
(172,083) |
|
========= |
========= |
========= |
========= |
NOTES TO THE FINANCIAL STATEMENTS
1 Summary
of significant accounting policies
(a) General
information and basis of preparation.
DXS International PLC is a public company
limited by shares incorporated in England and Wales. The address of
the registered office is given in the company information on Page 1
of these financial statements.
The group's principal activities during the year
were the development and distribution of clinical decision support
to General Practitioners, Nurses and Retail Pharmacies in the
United Kingdom and South Africa. The commercial side includes the
licensing of DXS products to various CCG's (Central Commissioning
Groups), the sale of e- detailing opportunities to the
pharmaceutical industry, the UK Primary Care sector and the
licencing of DXS technology to healthcare publishers.
The financial statements have been prepared in
accordance with applicable accounting standards including Financial
Reporting Standard 102 Applicable in the UK and Republic of Ireland
(FRS 102) and the Companies Act 2006. The financial statements have
been prepared on a going concern basis under the historical cost
convention. The financial statements are prepared in sterling which
is the functional currency of the company.
In the opinion of the Directors the group has
sufficient funding to continue as a going concern for at least
twelve months from the date of approval of the financial
statements.
Should the group be unable to continue trading,
adjustments would have to be made to reduce the value of assets to
their recoverable amounts and to provide for any further
liabilities that might arise. The financial statements do not
reflect any such adjustments.
The significant accounting policies applied in
the preparation of these financial statements are set out below.
These policies have been consistently applied to all years
presented unless otherwise stated.
(b) Intangible
assets
Intangible assets acquired separately from a
business are capitalised at cost.
Research and development expenditure, other than
specific identifiable development expenditure, is written off
against profits in the year in which it is incurred.
Identifiable development expenditure is
capitalised to the extent that the technical, commercial and
financial feasibility can be demonstrated. Developed products are
for use within the NHS and other medical institutions within both
the UK and internationally. The Group is already a supplier of
services to the NHS.
Goodwill arising on business combinations is
capitalised, classed as an asset on the balance sheet and amortised
over its useful life. The period originally chosen for writing off
the current goodwill was 20 years because the directors believed
that this was the period of time for the benefit to be received.
The Directors reviewed the anticipated future life of the goodwill
during 2020. It
was considered that
the anticipated future life of the goodwill would not exceed 3
years from 1 May 2020.
Accordingly the Net Book Value of the goodwill
at 30 April 2020 is being amortised over 3 years.
Intangible assets are amortised over a straight
line basis over their useful lives. The useful lives of intangible
assets are as follows:
Intangible type |
Useful life |
Reasons |
Development expenditure |
5 years from the date that the specific product is completed and
available for distribution. |
Period of time for benefit to be received |
Provisions is made for any impairment.
(c) Tangible fixed
assets
The company capitalises items purchased as
Tangible Fixed Assets which have a cost in excess of £550.
Tangible fixed assets are stated at cost less
accumulated depreciation.
Depreciation is provided on all tangible fixed
assets at rates calculated to write off the cost , less estimated
residual value, of each asset on a systematic basis over its
expected useful life as follows:
Plant and
equipment 3-4 years
straight line
(d) Debtors and
creditors receivable/ payable within one year
Debtors and creditors with no stated interest
rate and receivable or payable within one year are recorded at
transaction price. Any losses arising from impairment are
recognised in the profit and loss account in other administration
expenses
(e) Loans and
borrowings
Loans and borrowings are initially recognised at
the transaction price including transaction costs. Subsequently
they are measured at amortised cost using an effective interest
rate method. If an arrangement constitutes a finance transaction it
is measured at present value
(f) Grants
Government Grants, including non - monetary
grants, shall not be recognised until there is reasonable assurance
that :
(a)
the entity will
comply with the conditions attached to them; and
(b) the grants will
be received.
An entity shall recognise grants either based on
the performance model or the accrual model. This policy choice
shall be applied on a class-by-class basis.
A Grant received during the year has been
recorded as other income where receivable
(g) Tax
Current tax represents the amount of tax payable
or receivable in respect of the taxable profit for the current or
past reporting periods. It is measured at the amount expected to be
paid or recovered using the tax rates and laws that have been
enacted or substantively enacted by the reporting date.
(h) Turnover and
other income
Turnover is measured at the fair value of the
consideration received or receivable net of VAT and trade
discounts. The policy adopted for the recognition of turnover is as
follows:
Sale of services
Turnover is from the sale of products and
services to the pharmaceutical industry and the UK Primary Care
sector and is recognised over the term of service contract and is
apportioned on a time basis representing the delivery of the
service.
(i) Foreign
currency
Foreign currency transactions are initially
recognised by applying to the foreign currency amount the exchange
rate between the functional currency and the foreign currency at
the date of the transaction.
Monetary assets and liabilities denominated in a
foreign currency at the balance sheet date are translated using the
closing rate.
Foreign exchange gains or losses are recognised
in the Income Statement.
(j) Employee
benefits
When employees have rendered service to the
company, short term employee benefits to which the employees are
entitled are recognised at the undiscounted amount expected to be
paid in exchange for that service.
The company operates a defined contribution plan
for the benefit of its employees. Contributions are expensed as
they become payable.
(k) Leases
Rentals payable under operating leases are
charged to the income statement on a straight line basis over the
period of the lease.
(l) Share option
policy
The company recognised as an expense, the fair
value of share options granted over their vesting period. The fair
value is calculated by applying an option pricing model.
(m) Key judgements
and Key accounting estimates
The Key judgements or Key Accounting estimates
with a material effect on the carrying value of assets and
liabilities are set out below -.
In regards to the going concern of the company,
the directors have considered cash flow forecasts for the period to
April 2024 which include estimates to be earned from the new Aios
and Expertcare A1 solutions which are expected to be revenue
generating from late 2022. Also included are increased costs which,
if forecasted sales are slower than anticipated, can be reduced
accordingly. In addition the forecast include the receipt of new
financing for £500,000 which was agreed in July 2022 and is in the
process of being drawn down. Given the additional funds received
and the market potential for the new products, supported by trial
results, the directors consider it appropriate to adopt the going
concern basis of accounting and are satisfied that there is no
material uncertainty.
The Research and Development tax credit received
from HMRC is not a Government grant but a recognition of the costs
incurred in respect of the company's research and development and
is received through an adjustment to the taxable income of the
company
The Group has used a level of judgement around
key assumptions on the technical feasibility of products under
development, the consideration of the estimated useful lives of
these products and a degree of estimate in respect of the
capitalised attributable cost including the estimated amount of
time charged by employees.
(n) Reduced
disclosure
DXS International PLC meets the definition of a
qualifying entity under FRS 102 paragraph 1.12(b) and has therefore
taken advantage of the disclosure exemption in relation to the
parent cash flow statement.
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