DXS International plc Final Results

 
TIDMDXSP 
 

DXS INTERNATIONAL PLC

(AQSE: DXSP)

ANNUAL RESULTS

for the year ended 30 April 2023

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 2023.

Financial highlights:

   -- Revenue increased by 3% to GBP3,391,219 (2022: GBP3,285,050). 
 
   -- Core recurring revenue model continues to be resilient. 
 
   -- Profit after tax of GBP225,191 compared to GBP222,250 in 2022, an 
      increase of 1%. 
 
   -- Cash at bank at the period end was GBP371,978 (2022: GBP452,379). 

Operational highlights:

   -- Successful trial of SMART Referral solution with a hospital fertility 
      clinic reducing referral rejections from 36% to 0% saving clinician 
      wasted time and reducing waiting list. 
 
   -- Hypertension medicines optimisation solution completed the NHS IM1 
      integration and compliance processes and has entered the formal 
      evaluation which is anticipated to complete in October 2023. 
 
   -- We have designed and implemented a free trial sales initiative for our 
      two key solutions. 
 
          -- SMART Referral solution which has been shown to reduce referral 
             rejections from 36% to 0% and cut waiting times by more than 50%. 
 
          -- Our hypertension medicines optimisation solution designed by UK 
             GPs to optimise the treatment of long-term conditions in 
             accordance with best evidence guidelines. 

Both these solutions align with NHS aims and objectives.

Post-Period

Raised GBP500,000 in May from existing and new investors and GBP130,000 from management and consultants (by way of salary and fee conversion) to boost our sales and marketing efforts.

Management share options expired and will be replaced with a suitable replacement scheme in due course.

Outlook

The pace of accessing the NHS market remains challenging, primarily due to the inaccessibility of pressured NHS staff struggling to deal with treatment backlogs, strikes, staff shortages, restructuring and budget constraints. This adds elements of uncertainty to the rate of our growth plans and while we believe our sales and revenue targets to be highly achievable in the medium term, the envisioned timeframe remains uncertain.

In light of this, the market expectation of GBP4.7m annual revenue in the current financial year may no longer be achievable, but the Company remains confident that it will be achieved in the calendar year 2024.

David Immelman, Chief Executive of DXS, commented:

"Sales progress is proving to be frustratingly slow, however there is no doubt that we have 'first of type' solutions that can deliver significant results for healthcare providers and their patients. We are continuing with our development of cutting edge healthcare solutions focused on delivering improved health outcomes more cost effectively in the UK and internationally. Accessing healthcare markets present many hurdles, however equally as we overcome each of these, we are acutely aware that our competition faces similar challenges.

Our strategy is to remain super focused underpinned by the conviction of ultimately delivering results to our stakeholders and our shareholders."

The Directors of DXS International plc accept responsibility for this announcement. This announcement contains information which, prior to its disclosure, was inside information as stipulated under Regulation 11 of the Market Abuse (Amendment) (EU Exit) Regulations 2019/310 (as amended).

Contacts :

   David Immelman        01252 719800 

DXS International plc

www.dxs-systems.com

AQSE Corporate Broker

   Hybridan LLP        020 3764 2341 

Claire Louise Noyce

Corporate Advisor

   City & Merchant        020 7101 7676 

David 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 2023.

CHAIRMAN'S REPORT

The Board announce its results for the year ending 30(th) April 2023.

At April 2023, the turnover increased by 3% to GBP3,391,219 (2022: GBP3,285,050). Despite increased expenditure in research and development, the Company produced a profit after tax of GBP225,191 compared to GBP222,250 in 2022, an increase of 1%. Cash at bank at the period end was GBP371,978 (2022: GBP452,379).

The year continued to present significant challenges accessing our target market. NHS staff are currently focused on dealing with backlogs and the NHS restructuring which is ongoing. However, again our recurring revenue model proved to be resilient enabling a modest revenue increase of 3%.

The UK currently remains our sole source of revenue being split between the NHS and the pharmaceutical industry. Despite these disruptions, we have been able to begin engaging with prospective customers regarding new sales opportunities, particularly for our new SMART Referral and Hypertension solutions.

Our successful Fertility Clinic Referral Study continues delivering significant results with referral rejection rates now down from 36% to 0% and waiting times down by 55%. These positive outcomes have initiated a collaboration with an Academic Health Science Network to formally evaluate the outcomes of our SMART referrals in Cancer and ENT settings. The NHS is now demanding evidence before investing. Another key revenue opportunity is delivering metadata with each referral form which can be imported into hospital systems improving workflow and operational efficiencies.

Our hypertension medicines optimisation solution has now entered an important National Institute of Health Research (NIHR) funded evaluation phase after completing the NHS IM1 integration and compliance certification processes. The evaluation is formally being evaluated by the Eastern Academic Health Science Networks CVD and Evaluation Team. This report is expected to be completed by October 2023 and will provide formal evidence of how the ExpertCare hypertension solution will improve hypertension treatment in accordance with NICE guidelines as well as shift workloads from GPs to more junior Pharmacists and Nurses as well as cutting reviewing times.

To fund our sales and marketing efforts for SMART Referrals, SMART Pathways and the ExpertCare hypertension solutions, we have recently raised GBP500,000 from existing and new investors.

Development of our new cloud version of our DXS Point of Care solution continues and we hope to release the first version by November 2023.

While accessing healthcare markets remains a painfully slow process, we are more resolute than ever that our decision to invest in SMART intelligent digital solutions is correct. Ongoing statements by politicians, patient bodies, clinician groups, academic institutions and the media continually reinforce the current state of healthcare delivery in the UK. Prime Minister Rishi Sunak said: "Cutting waiting lists is one of my top five priorities".

Recent government announcements have emphasised the importance of controlling blood pressure. High blood pressure (hypertension) places a considerable burden on the NHS, where it is responsible for 12% of all visits to GPs with an estimated annual cost to the NHS of over GBP2 billion. The 2023/24 NHS Priorities and Operational Planning Guidance reconfirmed the ongoing need to improve productivity, make progress in delivering the key NHS Long Term Plan ambitions and continue to transform the NHS for the future. This included increasing the percentage of patients with hypertension treated to NICE guidance to 77% by March 2024. The ExpertCare hypertension solution is the ideal product to support this drive in a timely, cost-effective manner.

The enthusiastic reception that our new products are receiving from clinicians confirms that our strategy for managing referrals and hypertension with our SMART digital solutions are aligned with the NHS' stated objectives and underpinned by a competent, enthusiastic, and committed team. This commitment was demonstrated by key management's commitment to taking reduced drawings as well as converting unpaid remuneration of GBP130,628 to equity.

REPORT OF THE DIRECTORS

The directors present their annual report and the audited financial statements for the year ended 30 April 2023. 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 GBP1,380,617 into R&D for the introduction, continuation, and completion of a number of new DXS solutions. These are targeted at providing clinicians and with solutions to improve referring and the therapeutic management of long-term conditions. These products are aligned with the NHS strategy of Digital First and Empowering the Wider Workforce.

During the period we have borrowed GBP750,000 and repaid GBP268,792 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.

DIVID

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 Group 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 Group and 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 Immelman

Director

21(st) July 2023

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 2023, 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 releases 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 GBP225,191 (2022 - GBP222,250). The Operating (Loss) amounts to (GBP42,653) (2022 (GBP57,776)). There was an increase in amortisation of GBP91,098 to GBP660,645. The Group has a credit of GBP322,897 for UK Corporation Tax (2022 credit- GBP320,985) for the year.

The profit after tax for the year increased by GBP2,941 after a significant investment into R&D of GBP1,380,617. Revenue remained robust with an increase of GBP106,169 in revenue. As an accredited NHS solutions provider, DXS has well-established business continuity and disaster recovery protocols in place.

We have continued the development of our new Aios cloud-based system. In addition, we completed our IM1 integration for EMIS which has now been NHS accredited and a NIHR funded trial for our ExpertCare hypertension solution is underway.

Although the NHS remains notoriously slow in adopting new technology, our sustained efforts are seeing gained awareness of our new SMART referral and Hypertension solution which we believe will begin generating revenue in the new financial year.

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 the NHS' stated objective for clinicians to operate using digital technologies with which our new Aios and ExpertCare solutions are aligned.

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 as the current situation normalises.

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.

ANALYSIS OF BUSINESS DURING YEARING APRIL 2023

Revenue was marginally in line with market expectations, increasing by GBP106,169 while Profit after tax increased by GBP2,941.

FINANCIAL METRICS

   -- Group Revenue of GBP3,391,219 has increased by 3%. 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 GBP225,191, a 1% increase. This was 
      mainly due to increased investment of development. Definition: Underlying 
      profit provides information on the underlying performance of the 
      business. 
 
   -- Depreciation and amortisation of deferred Research and Development 
      expenditure and Goodwill in 2023 was GBP704,091 and in 2022 was 
      GBP659,247. 
 
   -- Earnings Per Share 2023 0.5p, 2022 0.5p. Definition: Earnings per share 
      is the underlying profit divided by the weighted average number of 
      ordinary shares in issue. 
 
   -- ROE 2023 5%, 2022 5%. 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 relevant ISO 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. 
 
   -- Set 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

21(st) July 2023

FINANCIAL STATEMENTS

INCOME STATEMENT

Year ended 30 April 2023

 
                                         2023                    2022 
                                 Continuing Operations   Continuing Operations 
 
                                         GBP                     GBP 
Turnover                                     3,391,219               3,285,050 
Cost of Sales                                (466,722)               (412,904) 
                                             _________               _________ 
Gross Profit                                 2,924,497               2,872,146 
Administration Costs                       (2,261,897)             (2,269,633) 
Depreciation and Amortisation                (705,253)               (660,289) 
                                             _________               _________ 
Operating profit                              (42,653)                (57,776) 
Sundry income                                        5                   2,153 
                                             _________               _________ 
                                              (42,648)                (55,623) 
Interest payable and similar 
 expenses                                     (55,058)                (43,022) 
                                             _________               _________ 
Loss on ordinary activities 
 before taxation                              (97,706)                (98,645) 
Tax on ordinary activities                     322,897                 320,895 
                                             _________               _________ 
Profit for the year                            225,191                 222,250 
                                =========               ========= 
Profit per share 
                                0.5p                    0.5p 
 --    basic 
                                0.5p                    0.5p 
 --    fully diluted 
                                =========               ========= 
 

Statement of Other Comprehensive Income

Year ended 30 April 2023

 
                                              2023       2022 
                                               GBP        GBP 
 
Profit for the year                           225,191    222,250 
Other comprehensive income                          -          - 
Tax on components of other comprehensive 
 income                                             -          - 
                                            _________  _________ 
Total comprehensive income for 
 the year                                     225,191    222,250 
                                            =========  ========= 
 

Statement of Financial Position

Year ended 30 April 2023

 
                                                          Company     Company 
                                 Group 2023  Group 2022     2023        2022 
                                                GBP         GBP         GBP 
Fixed Assets 
Intangible Assets                 5,860,209   5,183,683           -          - 
Tangible Assets                       1,222       2,645           -          - 
Investments                                           -   3,486,478  2,815,831 
                                  _________   _________   _________  _________ 
                                  5,861,331   5,186,328   3,486,478  2,815,831 
                                  _________   _________   _________  _________ 
Current assets 
Debtors: amounts falling due 
 within one year                    791,321     693,702      18,393     32,762 
Cash at bank and in hand            371,978     452,379     200,929    195,800 
                                  _________   _________   _________  _________ 
                                  1,163,299   1,146,081     219,322    228,562 
Creditors: amounts falling due 
 within one year                  (865,475)   (889,761)   (239,518)   (50,478) 
                                  _________   _________   _________  _________ 
Net current assets                  297,824     256,320    (20,196)    178,084 
                                  _________   _________   _________  _________ 
 
Total assets less current 
 liabilities                      6,159,155   5,442,648   3,466,282  2,993,915 
 
Creditors: 
Amounts falling due after more 
 than one year                    (720,446)   (331,330)  (470,042)-          - 
Deferred income                   (848,876)   (746,676)           -          - 
                                  _________   _________   _________  _________ 
                                  4,589,833   4,364,642   2,996,240  2,993,915 
                                  =========   =========   =========  ========= 
Capital and reserves 
Called up share capital             159,246     159,246     159,246    159,246 
Share Premium                     2,671,321   2,671,321   2,671,321  2,671,321 
Share option reserve                 21,382     173,808      21,382    173,808 
Retained earnings                 1,737,884   1,360,267   1,737,884   (10,460) 
                                  _________   _________   _________  _________ 
Shareholders' funds               4,589,833   4,364,642   2,996,240  2,993,915 
                                 =========   =========   =========   ========= 
 
 

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 GBP2,325 (2022 - GBP2,395) for the year.

The financial statements were approved and authorized for issue by the Board on 21(st) July 2023.

Signed on behalf of the Board of directors

 
D Immelman  R Sutciffe 
 Director    Director 
 
   Company Registration number :        06311313 

STATEMENT OF CASH FLOWS

Year ended 30 April 2023

 
                                              Group        Group 
                                               2023         2022 
                                               GBP          GBP 
Cash flow from operating activities           549,8083      907,862 
Interest paid                                 (55,058)     (43,022) 
Sundry Income                                        5        2,153 
R&D tax credit received                        323,897      249,895 
                                             _________    _________ 
Net cash flow from operating activities        818,647    1,116,888 
                                             _________    _________ 
 
Cash flow from investing activities                  -            - 
Payments to acquire intangible fixed 
 assets                                    (1,380,617)  (1,284,961) 
Payments to acquire tangible fixed 
 assets                                            361      (2,354) 
                                             _________    _________ 
                                           (1,380,256)  (1,287,315) 
                                             _________    _________ 
Financing Activities                                 - 
Expense in respect of share issue 
 in February 2020                                    -      (5,000) 
Repayment of long term loans                 (268,792)    (164,512) 
Advance of long term loans                     750,000            - 
                                             _________    _________ 
                                               481,208    (169,512) 
                                             _________    _________ 
 
Net (decrease) in cash and cash 
 equivalents                                  (80,401)    (339,939) 
Cash and Cash equivalents at 1 May 
 2021                                          452,379      792,318 
                                             _________    _________ 
Cash and Cash equivalents at 30 
 April 2022                                    371,978      452,379 
                                             =========    ========= 
Cash and Cash equivalents consists 
 of: 
Cash at bank and in hand                       371,978      452,379 
                                           =========    ========= 
 
 
 
 
                           Current   Non Current 
Net Debt Reconciliation      Debt        Debt       Cash       Total 
                             GBP         GBP         GBP        GBP 
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) 
Non -- cash flow                  -    (389,116)          -  (389,116) 
Cash Flow                  (20,354)            -   (80,401)  (100,755) 
                          _________    _________   ________  _________ 
At 30 April 2023          (313,486)    (720,446)    371,978  (661,954) 
                          =========  =========    =========  ========= 
 

NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)

Year ended 30 April 2023

   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 was 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            5 years from the date        Period of time for benefit 
expenditure             that the specific product    to be received. 
                        is completed and available 
                        for distribution. 
---------------------  ---------------------------  -------------------------- 
 

Provision 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 GBP550.

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.

   (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 and products

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 2025 which include estimates to be earned from the new Aios and Expertcare A1 solutions which are expected to be revenue generating from late 2023. Also included are increased costs which, if forecasted sales are slower than anticipated, can be reduced accordingly. In addition the company has issued shares to the value of GBP500,000, before expenses, since the year end.

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.

(END) Dow Jones Newswires

July 25, 2023 02:00 ET (06:00 GMT)

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