TIDMINHC
RNS Number : 9399G
Induction Healthcare Group PLC
29 July 2019
29 July 2019
Induction Healthcare Group PLC
("Induction", the "Company, or the "Group")
Audited results for the year and 26 days ("Period") ended 31
March 2019
Induction Healthcare Group PLC, a leading healthcare technology
company helping to streamline the delivery of care, announces its
maiden results for the Period ended 31 March 2019.
The Group's proprietary mobile app, Induction Switch, provides
healthcare professionals with the tools for getting quick access to
essential hospital information, such as guidelines and telephone
extension numbers, as well as enabling direct and time-saving
communication, all in a secure and regulatory compliant
setting.
Highlights
-- Successful IPO on AIM in May 2019
- GBP16.6m gross proceeds to fund working capital and
acquisitions
-- Continued strong growth in registered user base
- 38% increase in the six months to 31 March 2019
-- Established, engaged user base using the Induction Switch app
- 45% of NHS hospital doctors, 14% of NHS healthcare
professionals*
* NHS Workforce Statistics - March 2019
Current trading and outlook
-- Development of new Induction Switch features progressing well
-- Continued growth in users and engagement from period end to 25 July 2019
- Registered user base up 18% to 94,020
- Growth in lookups (directory / guidelines), calls and document
downloads
- Private workspaces up 21% to 210
- Number of Level 1 users in private workspaces up 42% to
2,022
-- Strong acquisition pipeline targeting new and complementary products, users and geographies
Ibs Mahmood, CEO at Induction, said:
"2019 has been an important year for Induction. Our IPO raised
GBP16.6m to accelerate our growth strategy, both organically and
via acquisitions. We are pleased with the continued growth in the
user base and user engagement with our app, Induction Switch, which
is helping healthcare professionals to deliver patient care more
effectively.
We are excited about the future and remain confident that we
have the right strategy in place to create value for all our
stakeholders and healthcare professionals."
ENQUIRIES
Induction Healthcare
Ibs Seb Jantet, Chief Financial Via FTI Consulting
Officer Mahmood, Chief Executive Via FTI Consulting
Officer
Numis Securities (Nominated
Adviser and Broker)
James Black / Freddie Barnfield
/ Huw Jeremy / Matthew Jones +44 (0) 207 260 1000
---------------------
FTI Consulting
Brett Pollard / Jamie Ricketts
/ Elena Kalinskaya / Sam Purewal +44 (0) 203 727 1000
---------------------
About Induction
Induction Healthcare Group PLC is a leading healthcare
technology company focused on helping healthcare professionals to
streamline the delivery of care. The Group's technology enables
healthcare professionals to save time and deliver care more
effectively and to identify ways to allocate resources more
efficiently.
The Group is initially targeting improving the way healthcare
professionals communicate with each other through its Induction
Switch app that provides a telephone directory (allowing healthcare
professionals to easily find extension telephone numbers),
messaging and an administration portal (to share and view hospital
guidelines), all in a secure and regulatory compliant setting.
As at 25 July 2019, the Induction Switch app had over 94,020
registered users, primarily in the UK. The registered user base
grew by 18% from 31 March 2019 to 25 July 2019.
CEO Review
Introduction
2018 was a landmark year for Induction as we embarked on our
journey to help healthcare professionals streamline the delivery of
care. The Group's technology enables healthcare professionals to
save time and deliver care more effectively and healthcare
institutions to identify ways to allocate resources more ef
ciently. The Group is initially targeting improving the way
healthcare professionals communicate with each other, through its
mobile application ("App"), Induction Switch. Induction Switch is
an App that provides a telephone directory (allowing healthcare
professionals to easily nd extension numbers), messaging and an
administration portal (to share and view hospital guidelines), all
in a secure and regulatory compliant setting.
Business review
Key Performance Indicators as at 31 March 2019:
-- 79,649 registered users, an increase of 38% over the last six months;
-- 40,765 average monthly users in the month of March 2019;
-- users looked up 6.3m numbers in the directory, made 1.3m
calls using Induction Switch and looked up 40,654 guidelines during
the last 12 months
-- 45% of NHS hospital doctors and 14% of all NHS healthcare
professionals use Induction Switch;
-- 584 UK healthcare institutions and 140 overseas healthcare
institutions using Induction Switch; and
-- 174 private workspaces set up with 1,423 "Level 1" users.
During the Period the Company was focusing on growing its user
base, building out the Induction Switch functionality and securing
the funds post-Period-end via an IPO to begin to deliver on the
Group's strategy.
Growing the user base
As at 31 March 2019 Induction Switch had 79,649 registered
users, primarily in the UK, including 52,338 doctors, General
Practitioners and consultants, 15,611 nurses and 11,700 other
healthcare professionals. The user base has been growing rapidly
largely through word of mouth between healthcare professionals.
From a geographic perspective, as at 31 March 2019, 74,733 (94%)
of the Group's registered users were based in the UK, 1,723 (2%) in
the US, 1,557 (2%) in South Africa, 832 (1%) in Malta, 677 (1%) in
Australia and 127 (0.2%) elsewhere. Aside from Australia and the
UK, where the Group has a commercial presence, the user base in all
of the other geographies has grown through word of mouth,
demonstrating the need for a product such as Induction Switch.
As at 31 March 2019, the Group's users were based in 724
healthcare institutions. Within this user base, there were 42
healthcare institutions with more than 500 Induction Switch users,
demonstrating both the breadth and depth of current
penetration.
The Group launched private workspaces in September 2018 and by
31 March 2019 174 private workspaces had been created. As at 31
March 2019 there were 1,423 users in the private workspaces also
known as "Level 1" users, with 857 having joined in the last two
months of this financial year as the Group has started to focus on
increasing user numbers in Level 1 workspaces ahead of the full
commercial launch of messaging. Level 1 access is free to
users.
Over the next year, the Group is planning to launch a number of
premium features that will only be accessible to users paying a
monthly fee. Users subscribing to these premium features are known
as "Level 2" users.
One of the Group's strengths is that it has an engaged user base
and it is focused on making sure that Induction Switch's value
proposition remains highly current for all of its users. The Group
does this by engaging with users on a regular basis and designing
product "blueprints" that helps individual users and groups of
users in Level 1 workspaces get the most from Induction Switch.
This engagement is demonstrated both by the high average monthly
user numbers and by what the Directors believe are industry leading
retention rates, with an average of more than 60% of users retained
for more than 6 months.
Building out Induction Switch's functionality
During the Period to 31 March 2019 the Group made a significant
investment in its technology platform, acquiring the intellectual
property rights to the MedX secure messaging app. This allowed the
Group to bring together the original MedX technology platform
developed as part of the proof of concept in Australia with the
well-established Induction Switch App in the UK, launching the
first generation of the combined application in August 2018. The
second generation App incorporating, amongst other features,
instant messaging was launched in late March 2019.
The Group also invested in the Company's technology backbone,
with a view to creating a scalable and reliable platform capable of
servicing the healthcare market. The Groups technology
infrastructure has been designed to cater for country speci c
regulations and data sovereignty.
In addition, the Group has undergone a positive independent
audit by Lloyd's Register Quality Assurance for the purpose of
certi cation in ISO9001:2015 and ISO27001:2013 to cover the
required activities in the provision of software products in a
secure manner. This initial audit took place in January 2019 and
the Group's certi cation to both standards was approved in March
2019.
Successful IPO for future growth
In April 2019, the shareholders in the Company executed a share
for share exchange whereby Induction Healthcare Group PLC acquired
100% of the share capital of the Company and in May 2019 Induction
Healthcare Group PLC successfully completed its Initial Public
Offering (the "IPO") on the Alternative Investment Market ("AIM")
of the London Stock Exchange. This, together with a private placing
completed just ahead of the IPO, raised gross proceeds of GBP16.6m.
These funds will be used for working capital and to fund the cash
consideration of acquisitions.
The Company would like to thank its shareholders, employees and
advisors for their support. The IPO was achieved against a backdrop
of challenging market conditions and continued uncertainty with
regard to the United Kingdom's exit from the European Union.
Growth strategy
The Group's strategy is to leverage its 79,649 (as at 31 March
2019) registered and fast growing user base of healthcare
professionals as a way to bring technology to healthcare delivery
at the grass roots level. The Directors' intention is to grow the
Group's number of users, its breadth of technological functionality
and its geographic reach through a buy and build strategy.
Current trading and outlook
Trading since the Period end has been positive. Registered users
have increased from 79,649 to 94,020 as at 25 July 2019, growth of
just over 18% since the Period end. Moreover, the number of private
workspaces and "Level 1" users in those workspaces have increased
by 21% and 42% respectively, to 210 and 2,022, with the Group
continuing to focus on building an engaged user base.
Induction Switch messaging functionality was launched in March
2019 and is currently being trialled in a handful of workspaces.
The initial user reaction has been positive, and the plan remains
to roll it out to a broader user base during the current financial
year.
The Group continues to make progress expanding Induction Switch
functionality and whilst it has taken slightly longer than expected
to resolve some of the technical teething issues, premium features
are still planned to be launched during the current financial year.
The freemium business model has been well received by healthcare
professionals and the initial signs are encouraging, both in terms
of the value proposition and the Group's ability to access funding
pools as it seeks to upgrade users to "Level 2".
The Group has an active pipeline of acquisition targets, in line
with its strategy to pursue acquisitions that add new and
complementary products, users and geographies.
Ibs Mahmood
CEO
29 July 2019
Financial review
Trading review
The loss for the Period was GBP2.7m. This included GBP0.5m of
non-recurring costs relating to establishing the Group, acquiring
Podmedics and preparatory work for the IPO on AIM. The Group made
significant investment in its technology platform during the
Period, with GBP1.3m spent on product development (excluding
GBP0.2m of capitalised development spend).
Net debt
As at 31 March 2019 the Group had GBP2.5m of loan notes
outstanding. Subsequent to the Period end, GBP2.0m of these loan
notes were converted into Ordinary Shares in Induction Healthcare
Group PLC and the balance was repaid.
Intangibles assets
As at the Period end the total intangible assets were GBP0.2m.
The majority of this related to capitalised development spend
relating to Induction Switch.
Working capital
Current assets mainly comprise the Podmedics option, VAT,
prepayments and other receivables. Current liabilities mainly
comprise trade payables and accruals with accrued IPO fees
accounting for a significant portion of the accruals.
Seb Jantet
CFO
29 July 2019
Consolidated Income Statement
for period 5 March 2018 (date of incorporation) to 31 March
2019
Note 2019
GBP000
Revenue 1,2 -
Cost of sales 1 (66)
_______
Gross loss (66)
Distribution expenses (264)
Development expenses (1,300)
Administrative expenses (1,066)
Other operating expenses (11)
_______
Operating loss 3 (2,707)
Financial income 5 -
_______
Loss before tax (2,707)
Taxation 6 -
_______
Loss for the Period (2,707)
_______
Attributable to:
Equity holders of the parent (2,707)
_______
(2,707)
_______
The notes form an integral part of these Financial
Statements
Consolidated Statement of Comprehensive Income
for period 5 March 2018 (date of incorporation) to 31 March
2019
Note 2019
GBP000
Loss for the Period (2,707)
Other comprehensive income
Items that will be reclassified to profit
or loss
Foreign currency translation differences
- foreign operations (1)
_______
Other comprehensive loss for the Period (1)
_______
Total comprehensive loss for the Period (2,708)
_______
Attributable to:
Equity holders of the parent (2,708)
_______
(2,708)
_______
Pence
Earnings per share:
Basic loss per share 7(6,128.79)
Diluted loss per share 7(6,128.79)
The notes form an integral part of these Financial
Statements
Consolidated Balance Sheet
at 31 March 2019
Note 2019
GBP000
Non-current assets
Intangible assets 8 222
_______
222
_______
Current assets
Other financial assets 10 100
Other receivables 11 128
Cash and cash equivalents 12 169
_______
397
_______
Total assets 619
_______
Current liabilities
Trade and other payables 14 761
Loans and borrowings 13 2,500
_______
3,261
_______
Total liabilities 3,261
_______
Net liabilities (2,642)
_______
Equity attributable to equity holders of
the parent
Share capital 16 66
Translation reserve 16 (1)
Accumulated deficit (2,707)
_______
Total equity (2,642)
_______
The notes form an integral part of these Financial
Statements
These financial statements were approved by the board of
Directors on 29 July 2019 and were signed on its behalf by:
Sebastien Jantet
Director
Company registered number: 11232772
Consolidated Statement of Changes in Equity
for period 5 March 2018 (date of incorporation) to 31 March
2019
Share Accumulated
Note capital Translation reserve deficit Total equity
GBP000 GBP000 GBP000 GBP000
Balance at 5 March 2018 (date of incorporation) - - - -
Total comprehensive loss for the Period
Loss for the Period - - (2,707) (2,707)
Other comprehensive loss for the Period - (1) - (1)
_______ _______ _______ _______
Total comprehensive loss for the Period - (1) (2,707) (2,708)
_______ _______ _______ _______
Transactions with owners, recorded directly in equity
Issue of shares 16 66 - - 66
_______ _______ _______ _______
Total contributions by and distributions to owners 66 - - 66
_______ _______ _______ _______
Balance at 31 March 2019 66 (1) (2,707) (2,642)
_______ _______ _______ _______
The notes form an integral part of these Financial
Statements
Consolidated Cash Flow Statement
for period 5 March 2018 (date of incorporation) to 31 March
2019
Note 2019
GBP000
Cash flows from operating activities
Loss for the Period (2,707)
Adjustments for:
Depreciation, amortisation and impairment 11
Financial income -
_______
11
Increase in trade and other receivables (228)
Increase in trade and other payables 761
_______
Net cash used in operating activities (2,163)
_______
Cash flows from investing activities
Expenditure on internally generated intangibles 8 (197)
_______
Net cash from investing activities (197)
_______
Cash flows from financing activities
Proceeds from the issue of share capital 16 30
Proceeds from new loan 13 2,500
_______
Net cash from financing activities 2,530
_______
Net increase in cash and cash equivalents 170
Cash and cash equivalents at 5 March 2018 -
(date of incorporation)
Effect of exchange rate fluctuations on cash
held (1)
_______
Cash and cash equivalents at 31 March 2019 12 169
_______
The notes form an integral part of these Financial
Statements
Notes
(forming part of the financial statements)
1. Accounting policies
Induction Healthcare Limited is a private company incorporated,
domiciled and registered in England in the UK. Its principal
activity is the provision of software to healthcare professionals.
The registered number is 11232772 and the registered address is
Wework c/o Induction Healthcare, 12 Hammersmith Grove, London,
United Kingdom, W6 7AP.
These financial statements include the consolidated financial
information of Induction Healthcare Limited (the "Company") and its
subsidiaries (together referred to as the "Group"). Details of
Induction Healthcare Limited's subsidiaries are included in Note 9.
The Group has only one reportable segment.
Both the financial statements of the Group and the financial
statements of the company have been prepared and approved by the
Directors in accordance with International Financial Reporting
Standards as adopted by the EU ("Adopted IFRSs"). Under s408 of the
Companies Act 2006 the company is exempt from the requirement to
present its own profit and loss account. This is the first period
for which financial statements have been prepared.
Judgements made by the Directors, in the application of these
accounting policies that have significant effect on the financial
statements and estimates with a significant risk of material
adjustment in the next year are discussed in Note 22.
The financial information included in this preliminary statement
has been prepared in accordance with International Financial
Reporting Standards (IFRS) as adopted by the European Union. The
information in this preliminary statement has been extracted from
the Group's annual report and consolidated financial statements for
the Period ended 31 March 2019 and the accounting policies applied,
and the judgements, estimates and assumptions made in applying
these policies, are consistent with those used in preparing the
annual report and consolidated financial statements. This
preliminary statement does not constitute statutory consolidated
financial statements for the Period ended 31 March 2019 as defined
under section 434 of the Companies Act 2006.
The Group's annual report and consolidated financial statements
for the period ended 31 March 2019 were approved by the Board of
Directors on 29 July 2019. The report of the auditor on those
financial statements was unqualified, did not contain an emphasis
of matter paragraph and did not contain any statement under section
498 of the Companies Act 2006. The annual report and consolidated
financial statements for the Period ended 31 March 2019 will be
filed with the Registrar in due course.
1.1 Measurement convention
These financial statements are prepared on the historical cost
basis except that other financial assets and liabilities are stated
at fair value.
1.2 Going concern
For the Period ended 31 March 2019, the Group made a loss of
GBP2,748,563 and had net current liabilities of GBP2,684,006. The
following matters have been considered by the Directors in
determining the appropriateness of the going concern basis of
preparation in these financial statements:
(a) On 1 April 2019, the shareholders in Induction Healthcare
Limited executed a share for share exchange whereby Induction
Healthcare Group PLC acquired 100% of the share capital of
Induction Healthcare Limited
(b) On 30 April 2019 and 1 May 2019, Mr Peter Davies and the
Induction Healthcare Group PLC entered into a subscription letter
and confirmation letter pursuant to which Peter Davies agreed to
subscribe for 1,739,130 Ordinary Shares in the capital of the
Induction Healthcare Group PLC at a price of GBP1.15 per share
raising GBP2,000,000;
(c) On 22 May 2019, Numis Securities Placed 12,681,915 shares in
Induction Healthcare Group PLC at a price of GBP1.15 per share with
a range of investors raising GBP14,584,202. These funds were paid
into an Induction Healthcare Limited bank account increasing the
intercompany balance between Induction Healthcare Limited and
Induction Healthcare Group PLC. The intercompany balance is
repayable on demand with an interest rate of 0%.
Notes (continued)
1 Accounting policies (continued)
Induction Healthcare Group PLC has provided a letter of support
to Induction Healthcare Limited expressing its intentions to
continue to provide financial and other support, including not
seeking repayment of amounts currently made available through
intercompany loans, for at least twelve months from the date of
signing these financial statements. As with any company placing
reliance on other group entities for financial support, the
directors acknowledge that there can be no certainty that this
support will continue although, at the date of approval of these
financial statements, they have no reason to believe that it will
not do so. Further, the directors are of the opinion that no asset
is likely to be realised for an amount less than the amount at
which it is recorded in these financial statements as at 31 March
2019. Consequently, the Directors are confident that the Group and
Company will have sufficient funds to continue to meet their
liabilities as they fall due for at least twelve months from the
date of approval of the financial statements and therefore have
prepared the financial statements on a going concern basis.
1.3 Basis of consolidation
Subsidiaries
Subsidiaries are entities controlled by the Group. The Group
controls an entity when it is exposed to, or has rights to,
variable returns from its involvement with the entity and has the
ability to affect those returns through its power over the entity.
In assessing control, the Group takes into consideration potential
voting rights. The acquisition date is the date on which control is
transferred to the acquirer. The financial information of
subsidiaries is included in these financial statements from the
date that control commences until the date that control ceases.
Losses applicable to the non-controlling interests in a subsidiary
are allocated to the non-controlling interests even if doing so
causes the non-controlling interests to have a deficit balance.
Change in subsidiary ownership and loss of control
Changes in the Group's interest in a subsidiary that do not
result in a loss of control are accounted for as equity
transactions.
Where the Group loses control of a subsidiary, the assets and
liabilities are derecognised along with any related non-controlling
interest and other components of equity. Any resulting gain or loss
is recognised in profit or loss. Any interest retained in the
former subsidiary is measured at fair value when control is
lost.
Transactions eliminated on consolidation
Intra-group balances and transactions, and any unrealised income
and expenses arising from intra-group transactions, are eliminated.
Unrealised gains arising from transactions with equity-accounted
investees are eliminated against the investment to the extent of
the Group's interest in the investee. Unrealised losses are
eliminated in the same way as unrealised gains, but only to the
extent that there is no evidence of impairment.
1.4 Foreign currency
Transactions in foreign currencies are translated to the
respective functional currencies of Group entities at the foreign
exchange rate ruling at the date of the transaction. Monetary
assets and liabilities denominated in foreign currencies at the
consolidated balance sheet date are retranslated to the functional
currency at the foreign exchange rate ruling at that date. Foreign
exchange differences arising on translation are recognised in the
consolidated income statement. Non-monetary assets and liabilities
that are measured in terms of historical cost in a foreign currency
are translated using the exchange rate at the date of the
transaction. Non-monetary assets and liabilities denominated in
foreign currencies that are stated at fair value are retranslated
to the functional currency at foreign exchange rates ruling at the
dates the fair value was determined.
The functional currency of the Company is Sterling. The assets
and liabilities of foreign operations with functional currencies
other than Sterling, including fair value adjustments arising on
consolidation, are translated to the Group's presentational
currency, Sterling, at foreign exchange rates ruling at the
consolidated balance sheet date. The revenues and expenses of
foreign operations are translated at an average rate for the year
where this rate approximates to the foreign exchange rates ruling
at the dates of the transactions.
Exchange differences arising from this translation of foreign
operations are reported as an item of other comprehensive income
and accumulated in the translation reserve.
Notes (continued)
1 Accounting policies (continued)
Exchange differences arising from a monetary item receivable
from or payable to a foreign operation, the settlement of which is
neither planned nor likely in the foreseeable future, are
considered to form part of a net investment in a foreign operation
and are recognised directly in equity in the translation
reserve.
When a foreign operation is disposed of in its entirety or
partially such that control is lost, the cumulative amount in the
translation reserve related to that foreign operation is
reclassified to profit or loss as part of the gain or loss on
disposal.
1.5 Fair value measurement
Financial instruments measured at fair value are classified into
a fair value hierarchy based on the valuation technique used to
determine fair value as follows:
-- Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities
-- Level 2: inputs other than quoted prices included within
Level 1 that are observable for the asset or liability, either
directly (i.e., as prices) or indirectly (i.e., derived from
prices)
-- Level 3: inputs for the asset or liability that are not based
on observable market data (unobservable inputs).
If the inputs used to measure the fair value of an asset or a
liability fall into different levels of the fair value hierarchy,
then the fair value measurement is categorised in its entirety in
the same level of the fair value hierarchy as the lowest level
input that is significant to the entire measurement.
1.6 Classification of financial instruments issued by the Group
Financial instruments issued by the Group are treated as equity
only to the extent that they meet the following two conditions:
(a) they include no contractual obligations upon the Group to
deliver cash or other financial assets or to exchange financial
assets or financial liabilities with another party under conditions
that are potentially unfavourable to the Group; and
(b) where the instrument will or may be settled in Induction
Healthcare Limited's own equity instruments, it is either a
non-derivative that includes no obligation to deliver a variable
number of Induction Healthcare Limited's own equity instruments or
is a derivative that will be settled by the company exchanging a
fixed amount of cash or other financial assets for a fixed number
of its own equity instruments.
To the extent that this definition is not met, the proceeds of
issue are classified as a financial liability. Where the instrument
so classified takes the legal form of Induction Healthcare
Limited's own shares, the amounts presented in the financial
statements for called up share capital and share premium account
exclude amounts in relation to those shares.
1.7 Financial instruments
Recognition and initial measurement
Non-derivative financial instruments comprise other receivables,
cash and cash equivalents, loans and borrowings, and trade and
other payables. All financial assets and liabilities are initially
recognised when the Group becomes a party to the contractual
provisions of the instrument. Financial assets and liabilities are
initially measured at fair value plus, for items measured at
amortised cost, transaction costs directly attributable to its
acquisition or issue.
Notes (continued)
1. Accounting policies (continued)
Financial assets - classification and subsequent measurement
On initial recognition, a financial asset is classified as
measured at amortised cost or fair value through profit or loss
("FVTPL"). The Group has no financial assets measured at fair value
through other comprehensive income ("FVOCI"). A financial asset is
measured at amortised cost if it is both: held within a business
model whose objective is to hold assets to collect contractual cash
flows; and its contractual terms give rise to cash flows that are
solely payments of principal and interest on the amount
outstanding. For the purposes of this assessment, "principal" is
defined as the fair value of the financial asset on initial
recognition, and "interest" is defined as consideration for the
time value of money and for the credit risk associated with the
principal amount outstanding. In assessing whether the contractual
cash flows are solely payments of principal and interest, the Group
considers the contractual terms of the instrument, including any
terms which may affect the timing or amount of contractual cash
flows. All financial assets not measured at amortised cost are
measured at FVTPL.
Financial assets at FVTPL are subsequently measured at fair
value with net gains and losses, including any interest or dividend
income, recognised in profit or loss. Financial assets measured at
amortised cost are subsequently measured at amortised cost using
the effective interest method. The amortised cost is reduced by
impairment losses.
Interest income, foreign exchange gains and losses, and
impairment are recognised in profit or loss. Any gain or loss on
derecognition is recognised in profit or loss.
Financial liabilities - classification and subsequent
measurement
Financial liabilities are classified as measured at amortised
cost or FVTPL. A financial liability is classified as at FVTPL if
it is classified as held-for-trading, it is a derivative or it is
designated as such on initial recognition. Financial liabilities at
FVTPL are measured at fair value and net gains and losses,
including any interest expense, are recognised in profit or loss.
All other financial liabilities are subsequently measured at
amortised cost using the effective interest method. Interest
expense and foreign exchange gains and losses are recognised in
profit or loss. Any gain or loss on derecognition is also
recognised in profit or loss.
Cash and cash equivalents
Cash and cash equivalents comprise cash balances and call
deposits. Bank overdrafts that are repayable on demand and form an
integral part of the Group's cash management are included as a
component of cash and cash equivalents for the purpose only of the
consolidated cash flow statement.
Derivative financial instruments and other financial assets
Other financial assets comprise call options. Options are
initially classified as FVTPL and recognised at fair value based on
the consideration paid for the option. Subsequently, the options
are measured at fair value and the gain or loss on remeasurement to
fair value is recognised immediately in profit or loss.
Business model assessment
The Group makes an assessment of the objective of the business
model in which a financial asset is held at a portfolio level as
this best reflects the way the business is managed and information
provided to management. The assessment includes consideration of
the stated objectives of the portfolio, the performance of the
portfolio, the risks that affect the performance of the business
model, and the frequency, volume and timing of sales of financial
assets.
Derecognition
The Group derecognises a financial asset when the contractual
rights to receive cash flows from the asset expire, or when it
transfers the rights to receive the contractual cash flows in a
transaction in which substantially all of the risks and rewards of
ownership are transferred.
The Group derecognises a financial liability when its
contractual obligations are discharged or cancelled, or expire.
1.8 Business combinations
All business combinations are accounted for by applying the
acquisition method. Business combinations are accounted for using
the acquisition method as at the acquisition date, which is the
date on which control is transferred to the Group.
Notes (continued)
1 Accounting policies (continued)
The Group measures goodwill at the acquisition date as:
-- the fair value of the consideration transferred; plus
-- the recognised amount of any non-controlling interests in the acquiree; plus
-- the fair value of the existing equity interest in the acquiree; less
-- the net recognised amount (generally fair value) of the
identifiable assets acquired and liabilities assumed.
When the excess is negative, a bargain purchase gain is
recognised immediately in profit or loss.
Costs related to the acquisition, other than those associated
with the issue of debt or equity securities, are expensed as
incurred.
Any contingent consideration payable is recognised at fair value
at the acquisition date. If the contingent consideration is
classified as equity, it is not remeasured and settlement is
accounted for within equity. Otherwise, subsequent changes to the
fair value of the contingent consideration are recognised in profit
or loss.
On a transaction-by-transaction basis, the Group elects to
measure non-controlling interests, which have both present
ownership interests and are entitled to a proportionate share of
net assets of the acquiree in the event of liquidation, either at
its fair value or at its proportionate interest in the recognised
amount of the identifiable net assets of the acquiree at the
acquisition date. All other non-controlling interests are measured
at their fair value at the acquisition date.
1.9 Company investment in subsidiaries
Investments in subsidiaries are included in the Company balance
sheet at cost less any provision for impairment.
1.10 Intangible assets
Research and development
Expenditure on research activities is recognised in the
consolidated income statement as an expense as incurred.
Expenditure on development activities is capitalised if the
product or process is technically and commercially feasible and the
Group intends to and has the technical ability and sufficient
resources to complete development, future economic benefits are
probable and if the Group can measure reliably the expenditure
attributable to the intangible asset during its development.
Development activities involve a plan or design for the production
of new or substantially improved products or processes. The
expenditure capitalised includes the cost of materials, direct
labour and an appropriate proportion of overheads and capitalised
borrowing costs. Other development expenditure is recognised in the
consolidated income statement as an expense as incurred.
Capitalised development expenditure is stated at cost less
accumulated amortisation and less accumulated impairment
losses.
Other intangible assets
Expenditure on internally generated goodwill and brands is
recognised in the consolidated income statement as an expense as
incurred. Other intangible assets that are acquired by the Group
are stated at cost less accumulated amortisation and accumulated
impairment losses.
1.11 Amortisation
Amortisation is charged to the consolidated income statement on
a straight-line basis over the estimated useful lives of intangible
assets unless such lives are indefinite. Intangible assets with an
indefinite useful life and goodwill are systematically tested for
impairment at each balance sheet date. Other intangible assets are
amortised from the date they are available for use. The estimated
useful lives are as follows:
up to 5 years
* patents and trademarks
up to 5 years
* capitalised development costs
up to 5 years
* other intellectual property
Notes (continued)
1 Accounting policies (continued)
1.12 Impairment
Non-derivative financial assets
The Group recognises loss allowances for expected credit losses
("ECLs") on financial assets measured at amortised cost. The Group
measures loss allowances at an amount equal to lifetime ECLs,
except for cash and cash equivalents which is measured using
12-month ECLs. ECLs are a probability-weighted estimate of credit
losses and are measured as the present value of all cash shortfalls
expected on financial assets, using the effective interest rate of
the financial asset. Lifetime ECLs are the ECLs which result from
all possible default events over the expected life of a financial
instrument. When determining ECLs, the Group considers reasonable
and supportable qualitative and quantitative information that is
relevant and available without undue cost or effort. The Group
considers a financial asset to be in default when the borrower is
unlikely to pay its obligations to the Group in full without
recourse by the Group to actions such as realising security (if any
held) or when the financial asset is more than 90 days overdue.
Loss allowances for financial assets measured at amortised cost
are deducted from the gross carrying amount of the assets. The
carrying amount of a financial asset is written off when the Group
has no reasonable expectation of recovering a financial asset in
its entirety or a portion thereof.
Non-financial assets
The carrying amounts of the Group's non-financial assets are
reviewed at each reporting date to determine whether there is any
indication of impairment. If any such indication exists, then the
asset's recoverable amount is estimated. For intangible assets that
have indefinite useful lives or that are not yet available for use,
the recoverable amount is estimated each period end.
The recoverable amount of an asset or cash-generating unit is
the greater of its value in use and its fair value less costs to
sell. 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 the purpose of impairment
testing, assets that cannot be tested individually are grouped
together into the smallest group of assets that generates cash
inflows from continuing use that are largely independent of the
cash inflows of other assets or groups of assets (the
"cash-generating unit" or "CGU").
An impairment loss is recognised if the carrying amount of an
asset or its CGU exceeds its estimated recoverable amount.
Impairment losses are recognised in profit or loss.
1.13 Employee benefits
Short term employee benefits
Short term employee benefits are expensed as the related service
is provided. A liability is recognised if the Group has a present
legal or constructive obligation to pay an amount as a result of
past employee service and the obligation can be estimated
reliably.
Defined contribution plans
A defined contribution plan is a post-employment benefit plan
under which the company pays fixed contributions into a separate
entity and will have no legal or constructive obligation to pay
further amounts. Obligations for contributions to defined
contribution pension plans are recognised as an expense in the
consolidated income statement in the periods during which services
are rendered by employees.
Share-based payment transactions
Share-based payment arrangements in which the Group receives
goods or services as consideration for its own equity instruments
are accounted for as equity-settled share-based payment
transactions, regardless of how the equity instruments are obtained
by the Group.
Notes (continued)
1 Accounting policies (continued)
The grant date fair value of share-based payment awards granted
to employees is recognised as an employee expense, with a
corresponding increase in equity, over the period that the
employees become unconditionally entitled to the awards. The fair
value of the options granted is measured using an option valuation
model, taking into account the terms and conditions upon which the
options were granted. The amount recognised as an expense is
adjusted to reflect the actual number of awards for which the
related service and non-market vesting conditions are expected to
be met, such that the amount ultimately recognised as an expense is
based on the number of awards that do meet the related service and
non-market performance conditions at the vesting date. For
share-based payment awards with market and non-vesting conditions,
the grant date fair value of the share-based payment is measured to
reflect such conditions and there is no true-up for differences
between expected and actual outcomes.
Share-based payment transactions in which the Group receives
goods or services by incurring a liability to transfer cash or
other assets that is based on the price of the Group's equity
instruments are accounted for as cash-settled share-based payments.
The fair value of the amount payable to employees is recognised as
an expense, with a corresponding increase in liabilities, over the
period in which the employees become unconditionally entitled to
payment. The liability is remeasured at each balance sheet date and
at settlement date. Any changes in the fair value of the liability
are recognised as personnel expenses in profit or loss.
1.14 Provisions
A provision is recognised in the consolidated balance sheet when
the Group has a present legal or constructive obligation as a
result of a past event, that can be reliably measured and it is
probable that an outflow of economic benefits will be required to
settle the obligation. Provisions are determined by discounting the
expected future cash flows at a pre-tax rate that reflects risks
specific to the liability.
1.15 Revenue
Revenue comprises the fair value of consideration received or
receivable for access to Induction Switch, the Group's proprietary
application which facilitates communication between healthcare
professionals, in the ordinary course of the Group's activities.
Revenue is shown net of value added tax and trade discounts and is
reported as follows:
-- On a per-user basis whereby users are charged a monthly fee
to access Induction Switch, with the pricing depending on the
features selected by users. Invoices are issued monthly and settled
via a credit or debit card. Revenue is recognised on a monthly
basis reflecting the period during which they have access to
Induction Switch.
-- On a healthcare institution basis whereby healthcare
institutions are charged a subscription for making Induction Switch
available to users. This revenue is recognised rateably over the
period of the subscription.
1.16 Expenses
Cost of sales
Cost of sales consists of the direct costs associated with
Induction Switch, the Group's proprietary application, including
costs incurred for server hosting and data population.
Operating lease payments
Payments made under operating leases are recognised in the
consolidated income statement on a straight-line basis over the
term of the lease. Lease incentives received are recognised in the
consolidated income statement as an integral part of the total
lease expense.
Financial income
Financing expenses comprise interest payable, finance charges on
shares classified as liabilities and finance leases recognised in
profit or loss using the effective interest method, unwinding of
the discount on provisions, and net foreign exchange losses that
are recognised in the income statement (see foreign currency
accounting policy). Borrowing costs that are directly attributable
to the acquisition, construction or production of an asset that
takes a substantial time to be prepared for use, are capitalised as
part of the cost of that asset. Financial income comprises interest
receivable on loans issued by the Group and is recognised in profit
or loss as it accrues, using the effective interest method. Foreign
currency gains and losses are reported on a net basis.
Notes (continued)
1 Accounting policies (continued)
1.17 Taxation
Tax on the profit or loss for the period comprises current and
deferred tax. Tax is recognised in the consolidated income
statement except to the extent that it relates to items recognised
directly in equity, in which case it is recognised in equity.
Current tax is the expected tax payable or receivable on the
taxable income or loss for the period, using tax rates enacted or
substantively enacted at the balance sheet date, and any adjustment
to tax payable in respect of previous periods.
Deferred tax is provided on temporary differences between the
carrying amounts of assets and liabilities for financial reporting
purposes and the amounts used for taxation purposes. The following
temporary differences are not provided for: the initial recognition
of goodwill; the initial recognition of assets or liabilities that
affect neither accounting nor taxable profit other than in a
business combination, and differences relating to investments in
subsidiaries to the extent that they will probably not reverse in
the foreseeable future. The amount of deferred tax provided is
based on the expected manner of realisation or settlement of the
carrying amount of assets and liabilities, using tax rates enacted
or substantively enacted at the balance sheet date.
A deferred tax asset is recognised only to the extent that it is
probable that future taxable profits will be available against
which the temporary difference can be utilised. Deferred tax assets
are reviewed at each reporting date and recognised to the extent
that it has become probable that future taxable profits will be
available against which they can be used.
1.18 Adopted IFRS not yet applied
The following Adopted IFRSs have been issued but have not been
applied by the Group in these financial statements. Their adoption
is not expected to have a material effect on the financial
statements unless otherwise indicated:
-- IFRS 16 Leases (effective date 1 January 2019) - the Group
has no leases which would fall within the scope of IFRS 16.
-- IFRIC 22 Foreign Currency Transactions and Advance
Consideration (effective date to be confirmed).
-- IFRIC 23 Uncertainty over Income Tax Treatments (effective date to be confirmed).
-- Annual Improvements to IFRS Standards 2014-2016 Cycle (effective date to be confirmed).
-- Amendments to IFRS 2: Classification and Measurement of
Share-based Payment Transactions (effective date to be
confirmed).
Notes (continued)
2. Revenue
Period to
31 March 2019
GBP000
Rendering of services -
_______
Total revenues -
_______
3. Expenses and auditors' remuneration
Included in net loss for the Period are the following:
Period to
31 March 2019
GBP000
Depreciation, amortisation and impairment 10
Audit of these financial statements 50
Research and development expensed as incurred 1,300
_______
Notes (continued)
4. Staff numbers and costs
The average number of persons employed by the Group (including
Directors) during the Period, analysed by category, was as
follows:
Period
to 31 March
2019
No. of
employees
Development 5
Sales and Marketing 1
General and Administrative 1
_______
7
_______
The aggregate payroll costs of these persons were as
follows:
Period
to 31 March
2019
GBP000
Wages and salaries 610
Social security costs 70
Contributions to defined contribution plans 26
_______
706
_______
The aggregate remuneration of the Directors and the remuneration
of the highest paid Director was GBP129,031.
5. Financial income
Period
to 31 March
2019
GBP000
Interest income on unimpaired financial assets -
_______
Total finance income -
_______
Financial income includes GBP43 of interest income received on
two loans made to a Director of the group and a senior employee of
the group. The terms of the loans are disclosed in Note 20.
Notes (continued)
6. Taxation
Recognised in the income statement and equity
Period
to 31
March
2019
GBP000
Current tax expense
Current year -
Current tax expense -
Deferred tax expense
Origination and reversal of temporary differences -
Deferred tax expense -
Current tax recognised directly in equity -
Deferred tax recognised directly in equity -
Total tax recognised directly in equity -
Tax expense in income statement, total tax expense and -
tax recognised in equity
Reconciliation of effective tax rate
Period
to 31 March
2019
GBP000
Loss for the Period (2,707)
Tax using the UK corporation tax rate of 19% 514
Non-deductible expenses (127)
Current Period losses for which no deferred tax asset
was recognised (387)
_______
Total tax expense -
_______
A deferred tax asset of GBP387k arises from unused tax losses of
GBP2,580k, however given the early stage nature of the business the
deferred tax asset has not been recognised.
7. Earnings per share
The calculation of basic and fully diluted earnings per share
has been based on the following loss attributable to ordinary
shareholders and weighted-average number of ordinary shares
outstanding.
Loss attributable to ordinary shares (basic and diluted) Period
to 31
March
2019
GBP000
Loss attributable to ordinary shares (basic and diluted) (2,707)
_______
(2,707)
_______
Weighted average number of ordinary shares (basic and Period
diluted) to 31
March
2019
GBP000
Issued ordinary shares as at 5 March 2018 20,000
Shares issued on 4 September 2018 9,828
Shares issued on 5 September 2018 35,763
_______
Issued ordinary shares as at 31 March 2019 65,591
_______
Weighted-average number of ordinary shares (basic and
diluted) 44,162
_______
Basic loss per share (6,128.79)
Diluted loss per share (6,128.79)
Notes (continued)
8. Intangible assets
Acquired Development
intangibles costs Total
GBP000 GBP000 GBP000
Cost
Balance at 5 March 2018 - - -
Acquisitions 36 - 36
Internally developed - 197 197
_______ _______ _______
Balance at 31 March 2019 36 197 233
_______ _______ _______
Amortisation and impairment
Balance at 5 March 2018 - - -
Amortisation for the Period 11 - 11
_______ _______ _______
Balance at 31 March 2019 11 - 11
_______ _______ _______
Net book value
At 5 March 2018 - - -
At 31 March 2019 25 197 222
_______ _______ _______
The acquired intangible asset recognised in the books consists
of the intellectual property acquired from Hugo Stephenson to
Induction Healthcare Limited on 5 of September 2018.
The capitalised development costs consist of the cost incurred
on developing the messaging capacity within Induction Switch from 1
January 2019 onwards, the date at which the project passed the
technological feasibility milestone.
Amortisation and impairment charge
Amortisation of the acquired intangible asset is recognised over
two years in other operating expenses in the consolidated income
statement.
No amortisation was recognised with respect to the development
costs as the asset has yet to be put into service at the Period
end.
Notes (continued)
9. Investments in subsidiaries
The Company has the following investments in subsidiaries:
Registered office Registered Class Balance Ownership
address number of sheet
shares value
held
Company 2019
Wework C/O Induction
Healthcare, 12 Hammersmith
Induction Healthcare Grove, London, United
(UK) Limited Kingdom W6 7AP 11237890 Ordinary GBP1 100%
23 Regent Street,
Induction Healthcare Prahran, Victoria
Pty Ltd 3181, Australia 625119397 Ordinary GBP1 100%
10. Other financial assets
2019
GBP000
Other financial assets designated as fair
value through profit or loss 100
_______
100
_______
Other financial assets comprise an option to acquire either the
shares or the assets of Podmedics Limited, a company providing a
healthcare application used by a substantial number of healthcare
professionals in the UK, in exchange for consideration of
GBP400,000 satisfied in either shares or cash. The option agreement
was entered into on 5 September 2018 and the Directors consider
that there has been no material change to fair value as at the
consolidated balance sheet date of 31 March 2019 and, as such, the
carrying amount is representative of fair value.
11. Other receivables
2019
GBP000
Loans to Director and employees 10
Other receivables 102
Prepayments 16
_______
128
_______
Included within trade and other receivables is GBPnil expected
to be recovered in more than 12 months.
12. Cash and cash equivalents
2019
GBP000
Cash and cash equivalents per consolidated
balance sheet 169
_______
Cash and cash equivalents per consolidated
cash flow statement 169
_______
Notes (continued)
13. Loans and borrowings
This note provides information about the contractual terms of
the Group's interest-bearing loans and borrowings, which are
measured at amortised cost. The loan has not been discounted as the
effective interest over the period of the loan would not be
material and the loan was subsequently settled on 4 June 2019. For
more information about the Group's exposure to interest rate and
foreign currency risk, see Note 17.
2019
GBP000
Current liabilities
Loan from Director 2,500
_______
2,500
_______
Terms and debt repayment schedule
Nominal interest Year of Face value Carrying
Currency rate maturity amount
2019 2019
GBP000 GBP000
Loan from
Director GBP 0% 2019 2,500 2,500
_______ _______
2,500 2,500
_______ _______
The Director loan is repayable in the event of an initial public
offering or a financing which raises not less than GBP20m in equity
or a sale of a controlling interest or substantially the whole of
the assets to a third party purchaser. See subsequent event Note 21
for more details.
Changes in loans and borrowings from financing activities
Total
GBP000
Balance at 5 March 2018 -
_______
Changes from financing cash flows
Proceeds from loans and borrowings 2,500
_______
Total changes from financing cash flows 2,500
_______
Other changes
Interest expense -
Interest paid -
_______
Total other changes -
_______
Balance at 31 March 2019 2,500
_______
Notes (continued)
14. Trade and other payables
2019
GBP000
Trade payables 107
Non-trade payables and accrued expenses 654
_______
761
_______
Included within trade and other payables is GBPnil expected to
be settled in more than 12 months.
15. Employee benefits
The Group operates a defined contribution pension plan which was
put in place in October 2018. The total expense relating to this
plan in the current year was GBP24,066.
16. Capital and reserves
Share capital
Ordinary shares in thousands 2019
of shares
No. of shares (000)
On issue at 5 March 2018 -
(date of incorporation)
Issued for cash 30
Issued in exchange for intangible
asset (see Note 8) 36
_______
On issue at 31 March 2019
- fully paid 66
_______
2019
GBP000
Allotted, called up and fully paid
Ordinary shares of GBP1 each 66
_______
66
_______
Shares classified as liabilities -
Shares classified in equity 66
_______
66
_______
The holders of ordinary shares are entitled to receive dividends
as declared from time to time and are entitled to one vote per
share at meetings of Induction Healthcare Limited.
During the Period Induction Healthcare Limited issued 65,591
GBP1 ordinary shares for a consideration of GBP65,591, of which
GBP29,828 was settled in cash and GBP35,763 was settled by way of
an assignment of intellectual property (see Note 20).
Notes (continued)
16. Share capital (continued)
Translation reserve
The translation reserve comprises all foreign exchange
differences arising since 5 March 2018 (date of incorporation) from
the translation of the financial information of foreign
operations.
Dividends
No dividends were recognised during the Period.
17. Financial instruments
The following table shows the carrying amounts and fair values
of financial instruments as at 31 March 2019. For financial assets
and liabilities not measured at fair value, the carrying amount is
considered to be a reasonable approximation of fair value.
Financial assets
2019
GBP000
Financial assets measured at FVTPL
Other financial assets 100
_______
100
_______
Financial assets measured at amortised cost
Loans to Director and employees 10
Other receivables 102
Cash and cash equivalents 169
_______
281
_______
The business does not hold any other form of financial assets.
No assets require impairment.
Financial liabilities
2019
GBP000
Financial liabilities measured at amortised
cost
Trade and other payables 107
Loans and borrowings 2,500
_______
2,607
_______
The business does not hold any other form of financial
liabilities.
Notes (continued)
17. Financial instruments (continued)
Risk management (continued)
All financial instruments measured at fair value are considered
to be Level 3 financial instruments in the fair value hierarchy.
Other financial assets comprise the cost of an option to acquire
either the shares or the assets of Podmedics Limited in exchange
for consideration of GBP400,000 satisfied in either shares or cash.
Whilst no formal valuation process was undertaken, the option was
recognised initially at cost, which represented the market value at
the time that the option was acquired. Given as at 31 March 2019 no
formal decision has been made with regard to whether to exercise
the option and that there has been no material change in the
trading of Podmedics between the time of the acquisition of the
option and the Period end, the Directors have concluded that there
has been no material change in the fair value of the option. There
are no significant unobservable inputs used in the valuation of the
option.
The Group has exposure to the following principal financial
risks in the operation and management of its
business:
(i) Liquidity risk;
(ii) Credit risk; and
(iii) Financial risk.
Liquidity risk
Liquidity risk is the risk that the Group will not be able to
meet its financial obligations as they fall due. The Group's
treasury policies are designed to ensure that sufficient cash is
available to support current and future business requirements. Cash
management is a core feature of the Group's business model and
rolling cash flow forecasts, updated on at least a monthly basis,
are reviewed to manage these requirements. At 31 March 2019, the
contractual maturity of all financial liabilities other than loans
and borrowings was less than 2 months. The Director loan is
repayable in the event of an Initial Public Offering or a financing
which raises not less than GBP20m in equity or a sale of a
controlling interest or substantially the whole of the assets to a
third party purchaser. See Subsequent Events Note 21 for more
details. Contractual cash flows are equal to the carrying amounts
of financial liabilities.
Credit risk
Credit risk is the risk of financial loss to the Group if a
customer or counterparty to a financial instrument fails to meet
its contractual obligations and arises principally from the Group's
receivables from customers and investment securities. The Group's
principal financial assets are cash and cash equivalents, other
financial assets, and other receivables, the carrying values of
which represent the Group's maximum exposure to credit risk in
relation to financial assets, as shown in this note. The Group's
credit risk is primarily attributable to its cash and cash
equivalents. The credit risk arising from cash and cash equivalents
is limited because the counterparties are banks with triple-A
credit ratings assigned by international credit-rating
agencies.
Market risk
Market risk is the risk that changes in market prices, such as
foreign exchange rates, interest rates and equity prices will
affect the Group's income or the value of its holdings of financial
instruments. Interest rate risk is not considered to be material to
the Group.
Notes (continued)
17. Financial instruments (continued)
Risk management (continued)
The Groups main exposure is to the United States dollar and the
Australian dollar. However, the Group's exposure is limited as the
sums involved are relatively small. The Group has a bank account
denominated in Australian dollars and the Group's exposure to
foreign exchange risk is limited by ensuring the Group has enough
cash in this account to cover approximately six months of
expenditure. The Group's exposure to foreign currency risk is as
follows. This is based on the carrying amount for monetary
financial instruments other financial assets and liabilities based
on notional amounts. Sensitivity analysis has not been presented as
the effects of reasonably possible strengthening or weakening of
the foreign currencies below would not have a material impact on
the Group's financial information.
31 March 2019
Sterling U.S. dollar Australian Total
dollar
GBP000 GBP000 GBP000 GBP000
Cash and cash equivalents 167 - 2 169
Other receivables 128 - - 128
Loans and borrowings (2,500) - - (2,500)
Trade and other payables (760) (-) (1) (761)
_______ _______ _______ _______
Balance sheet exposure (2,965) (-) 1 (2,964)
_______ _______ _______ _______
Capital management
The Group's policy is to maintain capital sufficient to sustain
the future development of the business.
18. Commitments
As at 31 March 2019 the Group had no capital commitments.
19. Contingencies
As at 31 March 2019 the Group had no contingencies.
Notes (continued)
20. Related parties
Identity of related parties with which the Group has
transacted
The related parties with which the Group has transacted are Hugo
Stephenson, a Director of the Group, Sebastien Jantet, a Director
of the Group, Dale Jessop, a member of key management personnel, Ed
Wallitt, a member of key management personnel, and Blue Muse
Investments Pty Ltd as trustee of The Blue Muse Trust, the ultimate
parent entity and a company/trust controlled by immediate relatives
of Hugo Stephenson.
Transactions with key management personnel
Directors of Induction Healthcare Limited and their immediate
relatives control 64.51 per cent of the voting shares of Induction
Healthcare Limited.
The compensation of key management personnel (including the
Directors) is as follows:
2019
GBP000
Key management remuneration including social
security costs 376
376
Key management remuneration comprises short-term
employee benefits only.
Other related party transactions
During the Period ended 31 March 2019, Induction Healthcare
Limited entered into a loan agreement with Hugo Stephenson, a
Director of Induction Healthcare Limited, under which he agreed to
lend the company up to GBP4,000,000. The loan may be drawn down at
any time up to 31 December 2019. The loan is repayable in the event
of an Initial Public Offering or a financing which raises not less
than GBP20m in equity or a sale of a controlling interest or
substantially the whole of the assets to a third party purchaser.
The loan is unsecured and is interest free. As at 31 March 2019,
the amount drawn down was GBP2,499,975.
During the Period ended 31 March 2019, the Group issued 35,736
GBP1 ordinary shares at par to Blue Muse Investments Pty Ltd as
trustee of The Blue Muse Trust, a company/trust controlled by
immediate relatives of Hugo Stephenson, in exchange for the
assignment of intellectual property by Hugo Stephenson to the
Group.
During the Period ended 31 March 2019, the Group entered into an
option to acquire the shares or assets of Podmedics Limited, a
company owned by Edward Wallitt, a member of the key management
personnel. The consideration for the option was GBP100,000.
During the Period ended 31 March 2019, Induction Healthcare
Limited entered into a loan agreement with Sebastien Jantet, a
Director of the Group, under which is agreed to lend him GBP6,552
to fund the purchase of 6,552 GBP1 ordinary shares in Induction
Healthcare Limited. The loan is repayable by 31 December 2019. The
loan is unsecured, and interest is due on the outstanding amount at
an interest rate equal to the base rate of the Bank of England. As
at 31 March 2019, the amount outstanding was GBP6,581. The loan has
not been discounted as the effective interest over the period of
the loan would not be material and the loan was subsequently
settled on 30 May 2019.
During the Period ended 31 March 2019, Induction Healthcare
Limited entered into a loan agreement with Dale Jessop, a member of
key management personnel, under which is agreed to lend him
GBP3,276 to fund the purchase of 3,276 GBP1 ordinary shares in
Induction Healthcare Limited. The loan is repayable by 31 December
2019. The loan is unsecured, and interest is due on the outstanding
amount at an interest rate equal to the base rate of the Bank of
England. As at 31 March 2019, the amount outstanding was GBP3,290.
The loan has not been discounted as the effective interest over the
period of the loan would not be material and the loan was
subsequently settled on 23 May 2019.
Notes (continued)
21. Subsequent events
On 1 April 2019, the Group went through a reorganisation where
the following happened:
-- The shareholders in Induction Healthcare Limited executed a
share for share exchange whereby Induction Healthcare Group PLC
acquired 100% of the share capital of Induction Healthcare Limited
in consideration for the issues share in Induction Healthcare Group
PLC to the shareholders of Induction Healthcare Limited on the
basis of one ordinary share in Induction Healthcare Group PLC for
each ordinary share in Induction Healthcare Limited.
-- Induction Healthcare Limited issued a loan note to Hugo
Stephenson replacing the outstanding GBP2.5m Directors loan
facility as at 1 April 2019. Shortly thereafter Induction
Healthcare Group PLC agreed to acquire this loan note from Hugo
Stephenson in exchange for the issue by Induction Healthcare Group
PLC of a loan note in the same amount (the "Company Loan
Note").
On the 30 April 2019 and 1 May 2019, Mr Peter Davies and the
Induction Healthcare Group PLC entered into a subscription letter
and confirmation letter pursuant to which Peter Davies agreed to
subscribe for 1,739,130 Ordinary Shares in the capital of the
Induction Healthcare Group PLC at a price of GBP1.15 per share,
raising GBP2,000,000.
On 7 May 2019, the Induction Healthcare Group PLC carried out a
share split such that that each of the existing issued ordinary
shares of GBP1 each in the capital of the Company was sub-divided
into 200 ordinary shares of 0.5 pence.
On 7 May 2019 the Induction Healthcare Group PLC and Hugo
Stephenson agreed to amend the Company Loan Note Instrument to
permit the Induction Healthcare Group PLC and Hugo Stephenson to
agree to the conversion of all or part of the loan notes into
Ordinary Shares and to provide that the loan notes (to the extent
not converted) are repayable by the Induction Healthcare Group PLC
within 5 business days of a financing pursuant to which the Group
raises not less than GBP10 million of equity financing. On the same
day Hugo Stephenson and the Induction Healthcare Group PLC entered
into a subscription letter pursuant to which Hugo Stephenson agreed
to subscribe for 1,739,130 Ordinary Shares in the capital of the
Induction Healthcare Group PLC at a price of GBP1.15 per share (the
aggregate subscription price therefore being GBP2,000,000), such
subscription price to be satisfied by the conversion of
GBP2,000,000 of the loan notes.
On 7 May 2019, Dr Edward Wallitt, Induction Healthcare Limited
and the Podmedics Limited entered into a share purchase agreement
pursuant to which Induction Healthcare Limited acquired the entire
issued share capital of Podmedics Limited (06840040) from Dr Edward
Wallitt. The consideration payable under the share purchase
agreement was GBP400,000 which was satis ed following Admission by
the issue by the Company to Dr Edward Wallitt of 347,826 Ordinary
Shares in the capital of the Induction Healthcare Group PLC.
Pursuant to the share purchase agreement, Dr Edward Wallitt granted
customary warranties and a tax deed to Induction Healthcare
Limited. The primary reason for the acquisition was to bring under
the Group's control all of the assets and intellectual property
relating to Induction Switch. The intangibles fair value relating
to the acquisition of Podmedics Limited had not been completed at
the date that these accounts were approved therefore the remaining
disclosures required under IFRS3 Business Combinations has not been
presented in these financial statements.
On 22 May 2019, Numis Securities Placed 12,681,915 shares in
Induction Healthcare Group PLC at a price of GBP1.15 per share with
a range of investors raising GBP14,584,202. These funds were paid
into an Induction Healthcare Limited bank account increasing the
intercompany balance between Induction Healthcare Limited and
Induction Healthcare Group PLC. The intercompany balance is
repayable on demand.
22. Accounting estimates and judgements
The preparation of financial information in conformity with
generally accepted accounting principles requires management to
make estimates and assumptions that affect the reported amounts of
assets and liabilities and the disclosure of contingent assets and
liabilities. Significant items subject to such assumption and
estimate include the useful economic life of assets and the
measurement and recognition of provisions. Actual results could
differ from these estimates and any subsequent changes are
accounted for with an effect on income at the time such updated
information becomes available.
The most critical accounting policies in determining the
financial condition and results of the Group are
those requiring the greatest degree of subjective or complex
judgement. These relate to valuation of acquired intangible assets
and other assets which are the areas of judgment that have the most
significant effect on the amounts recognised in the financial
statements.
Intangible assets
Intangible assets are reviewed for impairment if events or
changes in circumstances indicate that the carrying amount may not
be recoverable. When a review for impairment is conducted, the
recoverable amount of an asset or a cash-generating unit is
determined based on the higher of market value or value-in-use
calculations prepared on the basis of management's assumptions and
estimates.
Under the terms of a deed of assignment between Induction
Healthcare Limited, Hugo Stephenson and JuicyMed Pty Ltd, a company
controlled by Hugo Stephenson, Induction Healthcare Limited agreed
to issue 35,773 GBP1 ordinary shares at par to the assignor or a
nominee of the assignor (in this case Blue Muse Investments Pty Ltd
as trustee of The Blue Muse Trust). No formal valuation was done of
the intellectual property at the time of the transaction
transferred to the Group. The intangible asset was recognised
initially at cost and the Directors expect future economic benefits
to flow to Induction Healthcare Limited as a result of the
assignment. The Directors have carried out an impairment review and
concluded no indicators of impairment exist.
Other assets
Induction Healthcare Limited paid GBP100,000 for an option to
acquire either the shares or the assets of Podmedics Limited in
exchange for consideration of GBP400,000 satisfied in either shares
or cash. No formal valuation was done of the option at the time of
acquisition. The option was recognised initially at cost and, given
as at 31 March 2019 no formal decision has been made with regard to
whether to exercise the option and that there has been no material
change in Podmedics between the time of the acquisition of the
option and the Period end, the Directors have concluded that there
has been no material change in the fair value of the option.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
FR EAXXKASSNEFF
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July 29, 2019 02:00 ET (06:00 GMT)
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