Notes to the consolidated financial statements

 

1.       General information

 

InnovaDerma plc is a Group incorporated and domiciled in England and Wales under the Companies Act 2006. The address of its registered office is 27 Old Gloucester Street, London, United Kingdom, WC1N 3AX.

 

The principal activity of the Group is the development, distribution and sale of skincare, haircare, beauty and life science products in the markets that it operates.

 

2.       Accounting policies and critical accounting judgements

 

2.1 Basis of preparation

 

These financial statements are presented in pounds sterling because that is the currency of the primary economic environment in which the Group operates. Foreign operations are included in accordance with the policies set out in note 2.8.

 

The Group's financial information has been prepared in accordance with International Financial Reporting Standards ("IFRS") in accordance with international accounting standards in conformity with the requirements of the Companies Act 2006 and international financial reporting standards adopted pursuant to Regulation (EC) No 1606/2002 as it applies in the European Union, and on a basis consistent with that adopted in the previous year.

 

New standards that have been adopted in the annual financial statements for the year ended 30 June 2021, but have not had a significant effect on the Group are:

 

·      IAS 1 Presentation of Financial Statements and IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors (Amendment - Definition of Material)

·      IFRS 3 Business Combinations (Amendment - Definition of Business)

·      Revised Conceptual Framework for Financial Reporting

 

The Board are evaluating the impact of the adoption of all other standards, amendments and interpretations but do not expect them to have a material impact on the Group operation or results.

 

Certain standards, amendments to, and interpretations of, published standards have been published that are mandatory for the Group's accounting years beginning on or after 1 January 2021 or later years and which the Group has decided not to adopt early:

 

·      Onerous Contracts - Cost of Fulfilling a Contract (Amendments to IAS 37) (effective for periods commencing on or after 1 January 2022);

·      IFRS 17: Insurance Contracts (effective for periods commencing on or after 1 January 2023);

·      Property, Plant and Equipment: Proceeds before Intended Use (Amendments to IAS 16) (effective for periods commencing on or after 1 January 2022);

·      Annual Improvements to IFRS Standards 2018-2020 (Amendments to IFRS 1, IFRS 9, IFRS 16 and IAS 41) (effective for periods commencing on or after 1 January 2022); and

·      References to Conceptual Framework (Amendments to IFRS 3) (effective for periods commencing on or after 1 January 2022).

 

The above listed changes are not anticipated to have a material impact on the Group's financial statements.

 

The financial statements have been prepared on the historical cost basis modified for assets recognised at fair value on acquisition. Historical cost is generally based on the fair value of the consideration given in exchange for the assets. The principal accounting policies adopted are set out below.

 

2.2 Going concern

 

The Directors have, at the time of approving the financial statements, a reasonable expectation that the Company and the Group have adequate resources to continue in operational existence for the foreseeable future. In reaching this conclusion the Directors have considered the financial position of the Group, its cash, liquidity position and borrowing facilities together with its forecasts and projections for 12 months from the approval date that take into account reasonably possible changes in trading performance. The going concern basis of accounting has therefore continued to be adopted in preparing the financial statements.

 

The Group has taken into account the uncertainty due to the economic impact of COVID-19, and has made prudent forecasts, incorporating mitigating actions, based on current knowledge. It has also secured a CBILS loan of £950k, drawn down in full on 2 July 2021.

 

2.3 Prior year restatement

The Group has restated the prior year comparatives to correct the following prior period accounting errors:

·      To expense marketing costs incorrectly capitalised totalling £1,249k for the year ended 30 June 2018, £984k for the year ended 30 June 2019, and £840k for the year ended 30 June 2020.

·      Write down inventory due to incorrect allocation of cost of sales by £413k in the year ended 30 June 2019 and by £1,428k in the year ended 30 June 2020.

·      Reclassify Prolong intellectual property of £1,423k, prior to impairment, to goodwill to reflect the underlying nature of the April 2017 acquisition of Ergon Medical Limited.

·      Impairment of goodwill on acquisitions of £2,566k relating to Leimo / Grow Lase, Prolong and Stevie K, to correctly reflect note 2.6.

·      An amortisation charge relating to intangible assets, totalling £489k for the year ended 30 June 2018, £235k for the year ended 30 June 2019, and £215k for the year ended 30 June 2020, to correctly reflect note 2.11.

·      £701k reduction in goodwill of Skinny Tan, due to incorrect accounting for step acquisition of Skinny Tan Pty Ltd.

·      Register accruals totalling £392k for audit, tax and legal fees and bonus payments predominantly for the year ended 30 June 2020.

·      Recognise £140k expense relating to PAYE and VAT payments in the year ended 30 June 2019.

·      Recognise expense totalling £109k incorrectly recorded as prepayments in the year ended 30 June 2018.

·      Register £60k bad debt provision relating to the year ended 30 June 2020.

·      Recognise £78k share-based payment expense in the statement of changes in equity for the year ended 30 June 2020, reallocated from the statement of comprehensive income.

·      £410k intercompany loan exchange movements reallocated from foreign exchange reserve to administrative expenses

·      Recognise corporation tax charges for the year ended 30 June 2017 of £217k and for the year ended 30 June 2018 of £118k.

·      Derecognise a deferred tax asset of £402k due to uncertainty of sufficient future profits in those subsidiaries.

·      Reduce corporation tax liability by £1,387k as a result of the above-listed adjustments.

·      Reduce the non-controlling interest by £181k as a result of the above-listed adjustments.

 

These changes have had a material impact on the Group's reported statement of comprehensive income and statement of financial position for the financial year 30 June 2020. Please refer to note 31 for further details of the restatement.

 

2.4 Basis of consolidation

 

The consolidated financial statements incorporate the results and net assets of the Group and entities controlled by the Group (its subsidiaries) made up to 30 June each year. Control is achieved where the Group has the power to govern the financial and operating policies of an entity so as to obtain benefits from its activities.

 

The results of subsidiaries acquired during the year are included in the Consolidated Statement of Comprehensive Income from the effective date of acquisition or up to the effective date of disposal, as appropriate. Where necessary, adjustments are made to the results of subsidiaries to bring the accounting policies used in line with those used by the Group. All intra-group transactions, balances, income and expenses, and profits are eliminated on consolidation.

 

2.5 Business combinations

 

Business combinations occur where an acquirer obtains control over one or more businesses.

 

A business combination is accounted for by applying the acquisition method, unless it is a combination involving entities or businesses under common control. The business combination will be accounted for from the date that control is attained, whereby the fair value of the identifiable assets acquired, and liabilities assumed (including contingent liabilities) is recognised, subject to certain limited exceptions.

 

All transaction costs incurred in relation to business combinations are expensed to the Statement of Comprehensive Income. The acquisition of a business may result in the recognition of goodwill or a gain from a bargain purchase.

 

2.6 Goodwill

 

Goodwill is carried at cost less any accumulated impairment losses. Goodwill is calculated as the excess of the sum of:

·   the consideration transferred;

·   any non-controlling interest (determined under either the full goodwill or proportionate interest method); and

·   the acquisition date fair value of any previously held equity interest; over the acquisition date fair value of net identifiable assets acquired.

 

Goodwill on acquisition of subsidiaries is included in intangible assets.

Goodwill is tested for impairment annually and is allocated to the Group's cash-generating units or groups of cash-generating units, representing the lowest level at which goodwill is monitored being not larger than an operating segment. If the recoverable amount of the cash-generating unit is less than the carrying amount of the unit, the impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the unit and then to the other assets of the unit pro-rata on the basis of the carrying amount of each asset in the unit. An impairment loss recognised for goodwill is not reversed in a subsequent period.

 

Changes in the ownership interests in a subsidiary that do not result in a loss of control are accounted for as equity transactions and do not affect the carrying amounts of goodwill.

 

2.7 Non-controlling interests

 

The interest of non-controlling shareholders in subsidiary companies (holdings of less than 50%), are initially recognised at fair value. Subsequent results of the subsidiary are apportioned to the non-controlling interests in proportion to their shareholding.

 

2.8 Foreign currencies

 

The individual results of each Group company are presented in the currency of the primary economic environment in which it operates (its functional currency). For the purpose of the consolidated financial statements, the results and financial position of each Group company are expressed in pounds sterling, which is the functional currency of the Group, and the presentation currency for the consolidated financial statements.

 

For the purpose of presenting consolidated financial statements, the assets and liabilities of the Group's foreign operations are translated at exchange rates prevailing on the reporting date. Income and expense items are translated at the average exchange rates for the period. Exchange differences arising, if any, are recognised in other comprehensive income and accumulated in equity.

 

Exchange differences arising on translating the opening net assets at opening rate and the results of overseas operations at actual rate are recognised directly in other comprehensive income and are credited/(debited) to the foreign exchange reserve.

 

2.9 Revenue recognition

 

Revenue represents the value, net of sales taxes, of goods sold to customers. Revenue is recognised at a point in time when a product has been delivered to the customer and control has transferred to the customer. Revenue on sales to retail customers is recognised upon receipt of a valid PO and successful delivery to the customer warehouse; revenue on direct-to-consumer ("DTC") sales is recognised upon successful delivery to the customer. The Company's revenue is derived from fixed price unit prices and therefore the amount of revenue to be earned from each transaction is determined by reference to those fixed prices.

 

2.10 Taxation

 

Tax expense represents the total of tax currently payable and deferred tax charge.

 

i)     Current tax

 

The tax expense, or credit, is chargeable on the taxable loss for the year. Taxable loss differs from operating loss before tax due to items not tax deductible. The current tax charges are calculated using tax rates that have been enacted or substantively enacted at the reporting date.

 

ii)    Deferred tax

 

Deferred tax assets and liabilities are calculated at the tax rates expected to be effective at the time the timing differences are expected to reverse. Deferred tax assets and liabilities arise on timing differences between the recognition of gains and losses in the financial statement and recognition in the tax computation.

 

A net deferred tax asset is recognised only if it can be regarded as more likely than not that there will be suitable taxable profits from which future reversal of the underlying timing differences can be deducted.

 

Deferred tax assets and liabilities are offset where the Group has a right to offset the current tax assets and liabilities, and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.

 

2.11 Intangible assets

 

All intangible assets are stated at their amortised cost or fair value at initial recognition less any provision for impairment. Amortisation is calculated at rates estimated to write off the cost of the relevant assets on a straight-line basis over their expected useful lives. It is applied at the following rates:

 

Intellectual property rights                      3 years

Product development costs                   3 years

Capitalised software                              3 years

 

An intangible asset shall be derecognised on disposal, or when no future economic benefits are expected from its use or disposal.

 

2.12 Research and development

 

Research expenditure is written off as incurred.  Expenditure on internally developed products is capitalised if it can be demonstrated that:

 

·      It is technically feasible to development product for it to be available for use or sold;

·      Adequate technical, financial and other resources are available to complete the development;

·      There is an intention to complete and sell or use the product;

·      There is an ability for the Group to sell the product;

·      Sale of the product will generate future economic benefits; and

·      Expenditure on the project can be measured reliably.

 

Costs are capitalised as intangible assets unless physical assets, such as tooling, exist and are classified as property, plant and equipment.

 

2.13 Property, plant and equipment

 

Property, plant and equipment are initially recorded at cost. Once the asset is available for use, depreciation is calculated at rates estimated to write off the cost of the relevant assets on a straight-line basis over their expected useful economic lives. It is applied at the following rates:

 

Computer equipment                             3 years

Office equipment                                  3 years

Fixtures and fittings                               3 years

 

2.14 Inventories

 

Inventories are stated at the lower of cost and net realisable value. Cost is determined using the first-in, first-out (FIFO) method. The cost of finished goods and work in progress comprises design costs, raw materials, direct labour, and other direct costs, based on normal operating capacity. It excludes borrowing costs. Net realisable value is the estimated selling price in the ordinary course of business, less applicable variable selling expenses.

 

Provisiona are made for obsolete, slow-moving or defective items where appropriate.

 

2.15 Provisions for liabilities

Provisions are recognised when the Group has a present legal or constructive obligation as a result of past events, it is more likely than not that an outflow of resources will be required to settle the obligation, and the amount can be reliably estimated. Such provisions are measured at the present value of management's best estimate of the expenditure required to settle the present obligation at the reporting date. Provisions are not recognised for future operating losses.

 

2.16 Financial instruments

A financial instrument is any contract that gives rise to a financial asset of on entity and a financial liability or equity instrument of another.

(a) Financial assets

Initial recognition and measurement

Financial assets are classified, at initial recognition, and subsequently measured at amortised cost or fair value through profit and loss.

The classification of financial assets at initial recognition that are debt instruments depends on the financial asset's contractual cash flow characteristics and the Group's business model for managing them. The Group initially measures a financial asset at its fair value plus, in the case of a financial asset not at fair value through profit or loss, transaction costs.

The Group's business model for managing financial assets refers to how it manages its financial assets in order to generate cash flows. The business model determines whether cash flows will result from collecting contractual cash flows, selling the financial assets, or both.

Subsequent measurement

For purposes of subsequent measurement, financial assets are classified as follows:

·      Financial assets at amortised cost (debt instruments)

·      Financial assets at fair value through profit or loss

Financial assets at amortised cost (debt instruments)

This category is the most relevant to the Group. The Group measures financial assets at amortised cost if both of the following conditions are met:

·      The financial asset is held within a business model with the objective to hold financial assets in order to collect contractual cash flows; and

·      The contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

Financial assets at amortised cost are subsequently measured using the effective interest rate ("EIR") method and are subject to impairment. Interest received is recognised as part of finance income in the Statement of Comprehensive Income. Gains and losses are recognised in profit or loss when the asset is derecognised, modified or impaired. The Group's financial assets at amortised cost include trade and other receivables.

Derecognition

 

A financial asset (or, where applicable, a part of a financial asset or part of a Group of similar financial assets) is derecognised when:

 

·      The rights to receive cash flows from the asset have expired; or

·      The Group has transferred its rights to receive cash flows from the asset or has assumed an obligation to pay the received cash flows in full without material delay to a third party under a 'pass-through' arrangement; and either (a) the Group has transferred substantially all the risks and rewards of the asset, or (b) the Group has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset.

 

 

 

 

Impairment of financial assets

 

The Group recognises an allowance for expected credit losses ("ECLs") for all debt instruments not held at fair value. For trade and other receivables due in less than 12 months, the Group applies the simplified approach in calculating ECLs, as permitted by IFRS 9. Therefore, the Group does not track changes in credit risk, but instead, recognises a loss allowance based on the financial asset's lifetime ECL at each reporting date.

 

The Group considers a financial asset in default when contractual payments are 90 days past due. However, in certain cases, the Group may also consider a financial asset to be in default when internal or external information indicates that the Group is unlikely to receive the outstanding contractual amounts in full before taking into account any credit enhancements held by the Group.

 

A financial asset is written off when there is no reasonable expectation of recovering the contractual cash flows and usually occurs when past due for more than one year and not subject to enforcement activity. At each reporting date, the Group assesses whether financial assets carried at amortised cost are credit-impaired. A financial asset is credit-impaired when one or more events that have a detrimental impact on the estimated future cash flows of the financial asset have occurred.

 

 (b) Financial liabilities

 

Financial liabilities are classified, at initial recognition, as financial liabilities at fair value through profit or loss, loans and borrowings, or payables as appropriate. All financial liabilities are recognised initially at fair value and, in the case of loans and borrowings and payables, net of directly attributable transaction costs. The Group's financial liabilities include trade and other payables and loans.

 

Subsequent measurement

 

The measurement of financial liabilities depends on their classification, as described below:

 

Financial liabilities at fair value through profit or loss

 

Financial liabilities at fair value through profit or loss include financial liabilities held for trading and financial liabilities designated upon initial recognition as at fair value through profit or loss. Financial liabilities are classified as held for trading if they are incurred for the purpose of repurchasing in the near term. Gains or losses on liabilities held for trading are recognised in the statement of profit or loss and other comprehensive income.

 

Loans and borrowings and trade and other payables

 

After initial recognition, interest-bearing loans and borrowings and trade and other payables are subsequently measured at amortised cost using the EIR method. Gains and losses are recognised in the Statement of Comprehensive Income when the liabilities are derecognised, as well as through the EIR amortisation process.

 

Amortised cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortisation is included as finance costs in the statement of comprehensive income.

 

This category generally applies to trade and other payables.

 

Derecognition

 

A financial liability is derecognised when the associated obligation is discharged or cancelled or expires.

 

When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as the derecognition of the original liability and the recognition of a new liability. The difference in the respective carrying amounts is recognised in the Statement of Comprehensive Income.

 

 

2.17 Share-based payments

 

Equity-settled share-based payments to employees and others providing similar services are measured at the fair value of the equity instruments at the grant date and is expensed on a straight-line basis over the vesting period, usually three years. In accordance with IFRS 2, from a single entity perspective, InnovaDerma plc recognises an increase in investment and corresponding increase in equity to represent the settlement. Details regarding the determination of the fair value of equity-settled share-based transactions are set out in note 25.

 

At each statement of financial position date, the Group revises its estimate of the number of equity instruments expected to vest as a result of the effect of non-market-based vesting conditions and taking account of the average time in employment across the year. The impact of the revision of the original estimates, if any, is recognised in the consolidated statement of comprehensive income such that the cumulative expense reflects the revised estimate, with a corresponding adjustment to the consolidated statement of changes in equity.

 

2.18 Cash and cash equivalents

 

In the consolidated statement of cash flows, cash and cash equivalents includes cash at bank held by the Group.

 

3.       Critical accounting judgements and key sources of estimation uncertainty

 

In the application of the Group's accounting policies, which are described in note 2, the Directors are required to make judgements, estimates and assumptions about the carrying amounts of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.

 

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period or in the period of the revision and future periods if the revision affects both current and future periods.

 

The following are the critical judgements that the Directors have made in the process of applying the Group's accounting policies and that have the most significant effect on the amounts recognised in the financial statements.

 

Deferred tax asset recoverability

 

A deferred tax asset is recognised only if it can be regarded as more likely than not that there will be suitable taxable profits from which future reversal of the underlying timing differences can be deducted. Management exercise judgement in determining whether suitable taxable profits are likely for the relevant subsidiaries of the Group on a timely basis. The review is conducted using the subsidiaries' recent forecasts and future growth plans.

 

Impairment reviews

 

Management conducts annual impairment reviews of the Group's non-current assets on the Group consolidated Statement of Financial Position. This includes a review of goodwill annually, of development costs where IAS 36 requires it, and other assets as the appropriate standards prescribe. Any impairment review is conducted using the Group's future growth targets regarding its key markets. Sensitivities are applied to the growth assumptions to consider any potential long-term impact of current economic conditions, such as the impact caused by the COVID-19 pandemic. Provisions are made where the recoverable amount is less than the current carrying value of the asset. Further details as to the estimation uncertainty and the key assumptions are set out in note 12.

 

Research and development

 

As described in note 2.12, Group expenditure on new product development activities is capitalised if it meets the criteria as per IAS 38. Management have exercised and applied judgement when determining whether the criteria of IAS 38 is satisfied in relation to development costs. As part of this judgement process, management establish the future economic benefit relating to the product or process, evaluate the operational plans to complete the product development and establish where the development is positioned on the Group's product development road map and assess the costs against IAS 38 criteria. This process involves input from the operational, financial and commercial functions and is based upon detailed project cost analysis of both time and materials.

 

 

4.         Operating segments

 

The Group derives revenue from the sale of skin and beauty, haircare and life science products. The income streams are all derived from the utilisation of these products which, in all aspects except details are revenue, are reviewed and managed together within the Group and as such are considered to be only one segment.

 

A geographical analysis of the revenue from the Group's customers, by destination, is as follows:

		2021 £'000		2020 (restated) £'000
United Kingdom		7,919		10,833
United States of America		1,151		1,613
Asia Pacific		1,141		766
		10,211		13,212

 

A geographical analysis of the net current assets from the Group, by location, is as follows:

		2021 £'000		2020 (restated) £'000
United Kingdom		1,860		188
United States of America		240		215
Asia Pacific		395		233
		2,495		636

 

5.       Revenue 

		2021 £'000		2020 (restated) £'000
Skin and beauty products		9,610		11,966
Haircare products		440		980
Life science devices		161		266
		10,211		13,212

The Group's revenues from products and services were as follows:

 

 

6.       Loss from operations

Loss before tax for the year has been arrived at after (crediting)/charging:

	2021 £'000		2020 (restated) £'000
Depreciation	35		11
Amortisation	116		281
Impairment of goodwill	-		1,198
Net foreign exchange losses/(gains)	140		632
Cost of inventories recognised as expense	2,918		5,371
Non-recurring items including impairments, abortive and restructuring	210		-
Share-based payment expense	(68)		78
Directors' remuneration (see page 23)	438		462
Staff costs (see note 8)	1,731		1,888

 

Adjusted EBITDA has been arrived at after accounting for:

	2021 £'000		2020 (restated) £'000
Operating loss before tax	(1,883)		(5,046)
Depreciation	35		11
Amortisation	116		281
Impairment of goodwill	-		1,198
Foreign exchange losses/(gains) on intercompany loans	135		123
Non-recurring items including impairments, abortive and restructuring	210		-
Share-based payment (credit)/expense	(68)		78
Adjusted EBITDA	(1,455)		(3,355)

 

7.       Auditor's remuneration

 

Fees payable to the Group's auditors and their associates, for services to the Group, were as follows:

 

		2021 £'000		2020 (restated) £'000
The audit of the Group and its subsidiaries		80		92
Non-audit fees
-   Taxation and other services		36		3
		116		95

 

Fees of £36k (2020: nil) were charged by Crowe UK LLP, prior to their appointment as auditor, in relation to the Company prospectus and fundraise in the year.
 

 

8.       Staff costs

 

The average monthly number of employees, excluding Non-Executive Directors, was as follows:

		2021 Number		2020 Number
Management		3		5
Other employees		35		35
		38		40

 

The gender split of employees was as follows:

		Number of Men		Number of Women
Management		3		-
Other employees		15		20
		18		20

 

Staff costs for all employees during the year, including Non-Executive Directors, were as follows:

		2021 £'000		2020 (restated) £'000
Wages and salaries		1,590		1,607
Social security costs		98		79
Pension scheme contributions		111		124
Share-based payment expense		(68)		78
		1,731		1,888

 

 

Remuneration of key management, comprising Executive Directors and Non-Executive Directors, during the year was as follows:

		2021 £'000		2020 £'000
Wages and salaries		404		432
Social security costs		24		21
Pension scheme contributions		34		30
Share-based payment expense		(68)		78
		394		561

 

Details of Directors' remuneration are set out in the Remuneration Committee Report on pages 21 to 25.

 

9.       Finance costs

	2021 £'000		2020 £'000
Interest on bank overdrafts, loans and borrowings	4		1
	4		1

 

 

10.     Taxation

 

Analysis of tax (charge) / credit in the year

	2021 £'000		2020 (restated) £'000
Current tax:
UK corporation tax on loss in the year	-		-
Adjustment in respect of previous periods	-		109
Foreign taxes paid	(1)		-
Total current tax	(1)		109
Deferred tax:
Origination and reversal of timing differences	-		-
Adjustment in respect of previous periods	(370)		374
Total deferred tax	-		374
Total current tax	(371)		483

 

Factors affecting tax (charge) / credit for the year:

	2021 £'000		2020 £'000
Operating loss before tax	(1,883)		(5,046)
Operating loss before tax multiplied by standard rate of corporation tax in the UK 19.0% (2020: 19.0%)	358		959
Effects of:
Expenses not deductible for tax purposes	33		(398)
Deferred tax not recognised	(682)		(226)
Remeasurement of deferred tax	108		-
Adjustments to tax charge in respect of prior periods	(112)		268
Effects of overseas tax rates	(74)		98
Losses carried back	-		(266)
Other adjustments	(2)		48
Total tax (charge) / credit for the year	(371)		483

 

 

11.     Losses per share

		2021 £'000		2020 (restated) £'000
Losses for the purposes of basic and diluted losses per share being net losses attributable to owners of the Group		2,246		4,430
		2021		2020
Number of shares		Number		Number
Weighted average number of ordinary shares for the purposes of basic and diluted losses per share		17,449,621		14,496,633

 

 

 

 

Loss per share

		2021 £		2020 (restated) £
Basic and diluted		(0.13)		(0.31)

 

IAS 33 requires presentation of diluted EPS when a Group could be called upon to issue shares that would decrease earnings per share or increase the loss per share. For a loss-making Group with outstanding share options, the net loss per share would be decreased by the exercise of options. Therefore, as per IAS33:36, the anti-dilutive potential ordinary shares are disregarded in the calculation of diluted EPS.

 

12.     Goodwill

			£'000
Cost
At 1 July 2019			1,637
Additions			-
At 30 June 2020			1,637
Additions			-
At 30 June 2021			1,637
Accumulated impairment
At 1 July 2019			-
Impairment in year			(1,198)
At 30 June 2020			(1,198)
Impairment in year			-
At 30 June 2021			(1,198)
Carrying amount
At 1 July 2019			1,637
At 30 June 2020			439
At 30 June 2021			439

 

Goodwill acquired in a business combination is allocated, at acquisition, to the cash generating units (CGUs) that are expected to benefit from that business combination. Before recognition of impairment losses, the carrying amount of goodwill had been allocated as follows:

 

CGU	Goodwill £'000
Skinny Tan	214
Prolong	1,423
Total	1,637

 

 

 

The goodwill arose on the acquisition of Skinny Tan in the period ended 30 June 2015 and on the acquisition of Prolong in the year ended 30 June 2017. Goodwill represents the excess of the fair value of the consideration given over the fair value of the identifiable assets and liabilities acquired.

 

Impairment tests

 

The Group tests goodwill annually for impairment or more frequently if there are indications that goodwill might be impaired, by comparing the carrying value of the goodwill to its value in use on a discounted cash flow basis. In undertaking the impairment test, management considered both internal and external sources of information.

The Group tests intangible assets with finite lives for impairment if an indicator exists. The Board considers the potential impact of COVID-19 on the future prospects of the business to be an indicator of impairment and has carried out an impairment test by comparing the carrying value of each CGU to its value in use on a discounted cash flow basis.

 

Forecast cash flows

 

Management have prepared cash flow forecasts for 5 years for each CGU on the basis of estimated sales and relevant costs for the period. These cash flows are based on the useful economic life of the 'know how', which is considered to be the essential asset.

 

The key assumptions to the value in use calculations are set out below:

 

-     Discount rates. The interest rate applied to the CBILS loan, drawn down after the reporting date, is base rate plus 3.02%, therefore management have deemed 3.12% a relevant figure to use for cost of capital.

 

-     Growth rates. Management have assumed a growth rate of sales and costs of between 3% and 5%, dependent on the brand, the territory in which sales are forecast, and the probable inflationary pressures in those territories.

 

13.     Other intangible assets

	Intellectual property rights £'000		Product development costs £'000		Capitalised software £'000		Total £'000
Cost
At 1 July 2019	123		580		168		871
Additions	-		82		-		82
Disposals	-		-		-		-
Exchange differences	-		-		-		-
At 30 June 2020	123		662		168		953
Additions	-		97		123		220
Disposals	(123)		(576)		-		(699)
Exchange differences	-		-		-		-
At 30 June 2021	-		183		291		474
Amortisation
At 1 July 2019	(82)		(439)		(25)		(546)
Charge for the year	(41)		(162)		(78)		(281)
On disposals	-		-		-		-
Exchange differences	-		-		(2)		(2)
At 30 June 2020	(123)		(601)		(105)		(829)
Charge for the year	-		(48)		(68)		(116)
On disposals	123		576		-		699
Exchange differences	-		-		2		2
At 30 June 2021	-		(73)		(171)		(244)
Carrying amount
At 1 July 2021	-		110		120		230
At 30 June 2020	-		61		63		124
At 30 June 2019	41		141		143		325

 

The Group amortises capitalised development costs on a straight-line basis over a period of 3 years, rather than against product sales directly relating to the development expenditure, as this is estimated to be its useful economic life. Provision is made for any impairment.

 

The disposals in the year ended 30 June 2021 represent intellectual property and development costs relating to brands which are no longer active and for which the Group expects no further sales.

 

The amortisation charge on intangible assets is included in administrative expenses in the consolidated income statement.

 

 

14.     Property, plant and equipment

					Computer equipment £'000		Office equipment £'000		Fixtures and fittings £'000		Total £'000
Cost or valuation
At 1 July 2019					80		9		116		205
Additions					108		-		-		108
Disposals					-		-		-		-
Exchange differences					-		-		-		-
At 30 June 2020					188		9		116		313
Additions					114		-		-		114
Disposals					(30)		(4)		(116)		(150)
Exchange differences					5		-		-		5
At 30 June 2021					277		5		-		282
Accumulated depreciation
At 1 July 2019					(35)		(2)		(116)		(153)
Charge for the year					(9)		(2)		-		(11)
On disposals					-		-		-		-
Exchange differences					-		-		-		-
At 30 June 2020					(44)		(4)		(116)		(164)
Charge for the year					(31)		(4)		-		(35)
On disposals					31		4		116		151
Exchange differences					(1)		-		-		(1)
At 30 June 2021					(45)		(4)		-		(49)
Carrying amount
At 30 June 2021					232		1		-		233
At 30 June 2020					144		5		-		149
At 30 June 2019					45		7		-		52

 

15.     Subsidiaries

 

A list of the subsidiaries, including the name, country of incorporation, and proportion of ownership interest is given in note 4 to the Company's financial statements.

 

16.     Inventories

			2021 £'000		2020 (restated) £'000
Work in progress			72		26
Finished goods			1,736		1,249
			1,808		1,275

 

17.        Deferred tax asset

			2021 £'000		2020 (restated) £'000
Origination and reversal of timing differences			-		384
			-		384

 

In the year ended 30 June 2021, deferred tax assets of £384k arising on accumulated losses were derecognised (2020 restated: nil) due to uncertainty of sufficient future profits in those subsidiaries.

 

The total unrecognised deferred tax balance at 30 June 2021 is £1,830k (2020 restated: £1,200k).

 

18.     Trade and other receivables

				2021 £'000		2020 (restated) £'000
Trade receivables				1,530		1,092
Prepayments				200		307
Contract assets				45		-
Corporation tax				95		95
Social security and other taxes				19		49
Other debtors				7		47
				1,896		1,590

 

Contracts assets represent timing difference between cash receipt and order fulfilment from direct-to-consumer ("DTC") sales at the reporting date.

 

Sensitivity analysis on foreign currency risk arising on trade receivables denominated in currencies other than their function currency can be found in note 27. The maximum exposure to credit risk for trade receivables at the reporting date, by currency, was as follows:

 

			2021 £'000		2020 £'000
£ Sterling			1,501		998
United States dollar			-		14
Australian dollar			29		80
Philippine Peso			-		-
			1,530		1,092

 

Trade receivables disclosed above are classified as financial assets at amortised cost.

 

Before accepting any new customer, the Group uses an external credit scoring system to assess the potential customer's credit quality and defines credit limits by customer.

 

The Group does not hold any collateral or other credit enhancements over any of its trade receivables, with the exception of stock recovered from customers in respect of the doubtful debts disclosed below.

 

Ageing of past due but not credit impaired receivables at the statement of financial position date was:

 

				2021 £'000		2020 (restated) £'000
Current				919		565
31-60 days				431		447
61-90 days				149		2
91-120 days				18		2
121+ days				13		76
				1,530		1,092

 

In determining the recoverability of a trade receivable, the Group considers any change in the credit quality of the trade receivable from the date credit was initially granted up to the reporting date.

 

The Directors consider that the carrying amount of trade and other receivables is approximately equal to their fair value The Group's bad debt provision at the reporting date was £47k (2020 restated: £50k).

 

19.        Trade and other payables

			2021 £'000		2020 (restated) £'000
Trade payables			2,247		2,239
Accruals and deferred income			606		457
Social security and other taxes			604		676
Other creditors			90		98
			3,547		3,470

 

Trade payables and accruals principally comprise amounts outstanding for trade purchases and ongoing costs. The average credit period taken for trade purchases is 40 days. For all suppliers, no interest is charged on the trade payables. The Group has financial risk management policies in place to ensure that all payables are paid within the pre-agreed credit terms.

 

Sensitivity analysis on foreign currency risk arising on trade payables denominated in currencies other than their function currency can be found in note 27. The maximum exposure to foreign currency risk for trade payables at the reporting date, by currency, was as follows:

 

			2021 £'000		2020 £'000
£ Sterling			1,881		1,823
United States dollar			138		218
Australian dollar			228		198
Philippine Peso			-		-
			2,247		2,239

 

The Directors consider that the carrying amount of trade payables approximates to their fair value.

 

20.        Share capital

Authorised, allotted, called up and fully paid:		£'000
Balance at 1 July 2019:	14,496,633 Ordinary shares of EUR 0.10 each	1,738
Issued in the Year:	nil Ordinary shares of EUR 0.10 each	-
Balance at 30 June 2020:	14,496,633 Ordinary shares of EUR 0.10 each	1,738
Issued in the Year:	12,878,040 Ordinary shares of EUR 0.10 each	1,121
Balance at 30 June 2021:	27,374,673 Ordinary shares of EUR 0.10 each	2,859

 

21.     Share premium account                                          

			£'000
Balance at 1 July 2019			8,288
Balance at 30 June 2020			8,288
Premium arising on issue of equity shares			3,379
Expenses arising on issue of equity shares			(474)
Balance at 30 June 2021			11,193

 

22.        Reserves

 

Full details of movements in reserves are set out in the consolidated statement of changes in equity on page 35. The following describes the nature and purpose of each reserve within owners' equity:

 

Reserve	Description and purpose
Share premium	Amount subscribed for share capital in excess of nominal value.
Merger reserve	Difference between consideration transferred and nominal value of share capital on 2014 acquisition of InnovaDerma AUD & NZ Pty Ltd, InnovaDerma International Limited, InnovaDerma NZ Limited and ID Philippines, Inc.
Foreign exchange reserve	Net exchange difference recognised on translation of retained earnings of non-UK trading entities at the beginning and end of the period.
Share-based payment reserve	Cumulative charge relating to share-based payments issued to employees.
Accumulated losses	Cumulative net gains and losses attributable to shareholders.
Non-controlling interests	Cumulative net gains and losses attributable to non-controlling interests.

 

 

23.     Non-controlling interests

 

Set out below is summarised financial information for each subsidiary that has non-controlling interests that are material to the Group. The amounts disclosed for each subsidiary are before intercompany eliminations.

 

Summarised balance sheet	SkinnyTan UK Limited		Skinny Tan Pty Ltd
	2021	2020 (restated)	2021	2020 (restated)
	£'000	£'000	£'000	£'000
Current assets	5,325	4,282	307	72
Current liabilities	(3,724)	(2,686)	(1,058)	(1,095)
Net current assets	1,601	1,596	(751)	(1,023)
Non-current assets	44	49	-	-
Non-current liabilities	-	-	-	-
Non-current net assets	44	49	-	-
Net assets	1,645	1,645	(751)	(1,023)
Accumulated NCI	66	74	(30)	(46)

 

Summarised statement of comprehensive income	SkinnyTan UK Limited		Skinny Tan Pty Ltd
	2021	2020 (restated)	2021	2020 (restated)
	£'000	£'000	£'000	£'000
Revenue	7,365	10,567	599	407
Profit/(loss) for the year	1	(1,167)	273	(2)
Other comprehensive income	-	-	-	-
Total comprehensive income	1	(1,167)	273	(2)
Profit allocated to NCI	0	(49)	12	(0)
Dividends paid to NCI	-	-	-	-

 

Summarised cash flows	SkinnyTan UK Limited		Skinny Tan Pty Ltd
	2021	2020 (restated)	2021	2020 (restated)
	£'000	£'000	£'000	£'000
Cash flows from operating activities	800	(564)	34	1
Cash flows from investing activities	(31)	(64)	-	-
Cash flows from financing activities	-	-	-	-
Net increase/(decrease) in cash and cash equivalents	769	(628)	34	1

 

 

24.     Notes to the cash flow statement

		2021 £'000		2020 (restated) £'000
Operating loss before tax		(1,883)		(5,046)
Adjustments for:
Finance costs		4		1
Depreciation		35		11
Amortisation		116		281
Share-based payment expense		(68)		78
Impairment of intangible asset		-		1,198
Operating cash flows before movements in working capital		(1,796)		(3,477)
Decrease / (increase) in inventories		(533)		676
Decrease in receivables		(306)		1,910
(Decrease) / increase in payables		77		293
Cash used in operations		(2,558)		(598)
Income taxes received / (paid)		(1)		(3)
Net cash used in operating activities		(2,559)		(601)

 

 

Cash and cash equivalents

			2021 £'000		2020 £'000
£ Sterling			2,086		813
United States dollar			191		403
Australian dollar			58		20
Philippine Peso			3		5
			2,338		1,241

 

Sensitivity analysis on foreign currency risk arising on cash and cash equivalents denominated in currencies other than their function currency can be found in note 27.

 

Cash and cash equivalents comprises cash at bank held by the Group. The carrying amount of these assets approximates their fair value.

 

25.     Share-based payments

 

Equity-settled share option scheme

 

The Group has a share option scheme for key management, for which some options are EMI qualifying. Options are exercisable at a fixed price and the vesting period is three years. If the options remain unexercised after a period of ten years from the date of grant the options expire. Options are forfeited if the employee leaves the Group before the options vest. If an employee leaves the Group after the option vests, the employee has 90 days in which to exercise the option. If not exercised, the option will lapse at the end of the 90-day period.

 

Details of the share options outstanding during the year are as follows:

 

		2021 Number of share options		2021 Weighted average exercise price (£)		2020 Number of share options		2020 Weighted average exercise price (£)
Outstanding at beginning of the year		525,000		1.20		-		n/a
Granted during the year		-		n/a		525,000		1.20
Exercised during the year		-		n/a		-		n/a
Forfeited during the year		424,680		1.20		-		n/a
Outstanding at the end of the year		100,320		1.20		525,000		1.20
Exercisable at the end of the year		-		n/a		-		n/a

 

The options outstanding at 30 June 2021 had a weighted average exercise price of £1.20 (2020: £1.20) and a weighted average remaining contractual life of 9 years (2020: 10 years). The range of exercise prices for outstanding share options at 30 June 2021 was £1.20 to £1.20 (2020: £1.20 to £1.20).

 

In 2021, the aggregate of the estimated fair values of the options granted is £10k (2020: £78k). A share-based payment credit of £68k was generated in the year (2020: £78k charge) due to options forfeited in the year.

 

The inputs into the Black-Scholes model are as follows:

 

		2021		2020
Weighted average share price		0.60		0.60
Weighted average exercise price		1.20		1.20
Expected volatility		65%		65%
Expected life		3 years		3 years
Risk-free rate		0.7%		0.7%
Expected dividend yields		0.0%		0.0%

 

Expected volatility was determined by calculating the historical volatility of similar listed businesses over the previous three years. The expected life used in the model has been adjusted, based on management's best estimate, for the effects of non-transferability, exercise restrictions, and behavioural considerations.

 

26.     Retirement benefit schemes

 

The Group operates defined contribution retirement benefit schemes for all employees. The charge for the year relating to the Group defined contribution schemes was £111k (2020: £124k). Contributions of £15k (2020: £4k) remained unpaid as at 30 June 2021 (2020: £4k).

 

 

27.     Financial instruments

The Group's overall risk management programme seeks to minimise potential adverse effects on the Group's financial performance. The Group's financial instruments comprise cash and cash equivalents and various items such as trade payables and trade receivables that arise directly from its operations. The Group is exposed through its operations to the following risks:

 

·      Capital risk

·      Foreign currency risk

·      Credit risk

·      Interest rate risk

·      Liquidity risk

 

Capital risk

The Group manages its capital to ensure that each entity in the Group will be able to continue as a going concern whilst maximising the return to shareholders through the optimisation of the balance between debt and equity. The Group's overall strategy has remained unchanged between 2020 and 2021.

 

The capital structure of the Group consists of cash and cash equivalents and equity attributable to equity holders of the Group, comprising issued capital, reserves and accumulated losses as disclosed in notes 20 to 22.

 

The Group is not subject to any externally imposed capital requirements.

 

The Group's primary source of capital is equity. By pricing products and services commensurate with the level of risk and focusing on the effective collection of cash from customers, the Group aims to maximise revenues and operating cash flows.

 

The Group considers that the current capital structure will provide sufficient flexibility to ensure that appropriate investment can be made, if required, to implement and achieve the longer-term growth strategy of the Group.

 

Foreign currency risk

Foreign currency risk arises when companies of the Group enter into transactions denominated in a currency other than their functional currency. The transactional exposure arises on trade receivables, trade payables, and cash and cash equivalents. These balances are analysed by currency in notes 18, 19 and 24. The Group maintains a natural hedge, where possible, by matching cash inflows (revenue) and cash outflows (inventory and operational expenditure) in the respective currencies.

 

Management considers that the most significant foreign exchange risk relates to Australian dollar and United States dollar. The Group's sensitivity to a 5% strengthening in £ Sterling against each of these currencies (with other variables held constant) is as follows:

 

Decrease in adjusted EBITDA (at average rates)				2021 £'000		2020 £'000
United States dollar				3		9
Australian dollar				7		5

 

Credit risk

Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the Group. The Group has adopted a policy of assessing creditworthiness of counterparties as a means of mitigating the risk of financial loss from defaults. This information is supplied by independent rating agencies where available, and if not available, the Group uses other publicly available financial information and its own trading records to rate its major customers. The Group's exposure and the credit ratings of its counterparties are continuously monitored and the aggregate value of transactions concluded is spread amongst approved counterparties. Credit exposure is controlled by counterparty limits that are reviewed and approved annually.

 

Trade receivables consist of a small number of customers, spread across diverse industries and geographical areas. Ongoing credit evaluation is performed on the financial condition of accounts receivable.

 

The Group's standard credit terms are 30 to 60 days from date of invoice. Invoices greater than 60 days old are assessed as overdue. The maximum exposure to credit risk is the carrying value of each financial asset included on the statement of financial position as summarised in note 18.

 

The Group's management considers that all the above financial assets that are not impaired or past due for each of the reporting dates under review are of good quality.

 

Interest rate risk

 

Interest rate risk arises when the Group is exposed to variable interest rates on borrowings secured. The current exposure to interest rate risk relates to the CBILs government loan facility, drawn down after the reporting date, which is tied to the bank of England interest rate. See note 30 to the consolidated financial statements for detail of the CBILS loan facility.

 

Liquidity risk

 

Liquidity risk arises from the possibility that the Group might encounter difficulty settling its debts or otherwise meeting its obligations related to financial liabilities. Responsibility for liquidity risk management rests with the Board of Directors, who has established an appropriate liquidity risk management framework for the management of the Group's short-, medium- and long-term funding and liquidity management requirements. The Group manages liquidity risk by maintaining adequate reserves, banking facilities and reserve borrowing facilities, by continuously monitoring forecast and actual cash flows, and through careful cash management policies.

 

As all liabilities of the Group are current liabilities, maturity analysis has not been prepared.

 

Significant accounting policies

 

Details of the significant accounting policies and methods adopted (including the criteria for recognition, the basis of measurement and the bases for recognition of income and expenses) for each class of financial asset, financial liability and equity instrument are disclosed in note 2.16.

 

Categories of financial instruments

		2021 £'000	2020 (restated) £'000
Financial assets
Cash and bank balances		2,338	1,241
Trade and other receivables		1,530	1,092
Financial liabilities
Trade and other payables		2,247	2,239

 

Financial liabilities are measured at amortised cost.

 

28.     Ultimate controlling party

 

As at 30 June 2021 the Directors consider there to be no ultimate controlling party by virtue of the fact no one holds a majority shareholding in the Group.

 

29.        Related party transactions

 

On 11 January 2021 Mark Ward, a Director of the Group, entered into a loan agreement to provide the Group with a working capital loan facility of £500k. The loan was converted to shares as part of the Open Offer concluded on 29 April 2021, and no amount remains due. No interest was charged on the loan.

 

Other than those disclosed within this note, shareholding transactions with directors are noted in the Directors Report page 16 and Directors remuneration noted in the Remuneration Committee Report on pages 23 to 24, there have been no other transactions with related parties.

 

30.        Events after the reporting date

 

On 27 May 2021 SkinnyTan UK Limited entered into a CBILS loan facility for £950,000. The fellow subsidiaries of the InnovaDerma group are guarantors under this agreement. The loan facility was drawn down in full on 2 July 2021.

 

On 2 September 2021 the Board approved the grant of options over 125,000 Ordinary shares to Blake Hughes and 95,500 Ordinary shares to Andrew Dunderdale. Both grants have an exercise price of £0.35 and will be exercisable on or after the third anniversary of the grant date subject to share price performance of the Company and conditions defined in the share option plan.

 

One third of the options may be exercised when the market price of the Ordinary Shares is equal to at least 25% increase over the grant price for a period of not less than one month; one third when the market price of the Ordinary Shares is equal to at least 50% increase over the grant price for a period of not less than one month; and the balance may be exercised when the market price of the Ordinary Shares is equal to at least 75% increase over the grant price for a period of not less than one month.

 

On 3 December 2021 Ergon Medical Limited, a wholly owned subsidiary of InnovaDerma plc, subdivided its 3,614 £1 Ordinary A shares into £0.10 Shares and re-designated them as Ordinary B shares and issued 51,060 new Ordinary A shares to Mark Ward, Non-Executive Director of InnovaDerma plc. The issue of new shares dilutes InnovaDerma plc's shareholding in Ergon Medical Limited to 45%. The transaction is an effective step disposal and as such Ergon Medical Limited is now an associate rather than a subsidiary of InnovaDerma plc. The funds raised by Ergon Medical Limited will be used to further promote the expansion of the Prolong device in US markets.

 

The impact of the step disposal removes Ergon Medical Limited and the trade of Prolong US from the consolidated financials of InnovaDerma plc going forward. In the year ended 30 June 2021, Ergon Medical Limited and the trade of Prolong US generated revenue of £153k (2020: £93k) and profit before tax of £31k (2020 restated: loss before tax £145k). As at 30 June 2021, the business unit had net liabilities excluding intercompany of £58k (2020 restated: net liabilities excluding intercompany of £109k).

 

The Directors confirm that there are no other events after the reporting date which require disclosure.

 

31.     Prior period restatement

 

The comparative figures for the year ended 30 June 2020 have been restated to correct the prior period accounting errors disclosed in note 2.3. The following tables show the financial impact of the restatements by comparing the previously stated and the now restated Statement of Comprehensive Income and Statement of Financial Position.

 

	As reported 2020 £'000	Restatements 2020 £'000	As restated 2020 £'000
Continuing operations
Revenue	13,259	(47)	13,212
Cost of sales	(5,974)	(1,267)	(7,241)
Gross profit	7,285	(1,314)	5,971
Other operating income	108	(108)	-
Marketing expenses	(4,231)	(969)	(5,200)
Wages & salaries expenses	(1,759)	(129)	(1,888)
Administrative expenses	(1,780)	(950)	(2,730)
Impairment of goodwill	-	(1,198)	(1,198)
Operating loss	(377)	(4,668)	(5,045)
Finance cost	-	(1)	(1)
Operating loss before tax	(377)	(4,669)	(5,046)
Income Tax expense	68	415	483
Net loss for the period	(309)	(4,254)	(4,563)
Other comprehensive Income	(19)	19	-
Exchange loss on foreign currency net investments	-	84	84
Total comprehensive income for the period	(328)	(4,151)	(4,479)
Attributable to:
Owners of the parent	(335)	(4,095)	(4,430)
Non-controlling interests	7	(56)	(49)
Loss per share
-   basic and diluted (£)	(0.02)	(0.29)	(0.31)

 

 

	£'000	As reported 2020 £'000		£'000	Restatements 2020 £'000		£'000	As restated 2020 £'000
Non-current assets
Goodwill		3,660			(3,221)			439
Other intangible assets		4,150			(4,026)			124
Property, plant and equipment		149			-			149
Deferred tax asset		402			(18)			384
		8,361			(7,265)			1,096
Current assets
Cash and cash equivalents	1,241			-			1,241
Inventories	3,116			(1,841)			1,275
Trade and other receivables	1,510			80			1,590
	5,867			(1,761)			4,106
Current liabilities
Trade and other payables	(3,891)			421			(3,470)
Net current assets		1,976			(1,340)			636
Total assets less current liabilities		10,337			(8,605)			1,732
Non-current liabilities
Borrowings		(1)			1			-
Net assets		10,336			(8,604)			1,732
Equity
Share capital		1,736			2			1,738
Share premium account		8,288			-			8,288
Merger reserve		(721)			-			(721)
Foreign exchange reserve		(221)			483			262
Share-based payment reserve		-			78			78
Accumulated losses		999			(8,940)			(7,941)
Equity attributable to owners of parent		10,081			(8,377)			1,704
Non-controlling interest		255			(227)			28
Total equity		10,336			(8,604)			1,732

 

 

	£'000	As reported 2019 £'000		£'000	Restatements 2019 £'000		£'000	As restated 2019 £'000
Non-current assets
Goodwill		3,511			(1,874)			1,637
Other intangible assets		3,068			(2,743)			325
Property, plant and equipment		53			(1)			52
Deferred tax asset		234			-			234
		6,866			(4,618)			2,248
Current assets
Cash and cash equivalents	2,043			-			2,043
Inventories	2,364			(413)			1,951
Trade and other receivables	3,628			(452)			3,176
	8,035			(865)			7,170
Current liabilities
Trade and other payables	(4,160)			983			(3,177)
Net current assets		3,875			118			3,993
Total assets less current liabilities		10,741			(4,500)			6,241
Net assets		10,741			(4,500)			6,241
Equity
Share capital		1,736			2			1,738
Share premium account		8,288			-			8,288
Merger reserve		(721)			-			(721)
Foreign exchange reserve		(172)			350			178
Accumulated losses		1,291			(4,681)			(3,390)
Equity attributable to owners of parent		10,422			(4,329)			6,093
Non-controlling interest		319			(171)			148
Total equity		10,741			(4,500)			6,241

 

 

Company Statement of Financial Position

 

 

	Note	£'000	2021 £'000		£'000	2020 (restated1) £'000		£'000	2019 (restated1) £'000
Non-current assets
Investment in subsidiaries	4		1,013			954			1,643
Other intangible assets	5		120			9			126
			1,133			963			1,769
Current assets
Cash and cash equivalents		778			436			977
Trade and other receivables	7	1,258			658			4,440
		2,036			1,094			5,417
Current liabilities
Trade and other payables	8	(912)			(2,633)			(12)
Net current assets			1,124			(1,539)			5,405
Total assets less current liabilities			2,257			(576)			7,174
Net assets			2,257			(576)			7,174
Equity
Share capital	10		2,859			1,738			1,738
Share premium account	11		11,193			8,288			8,288
Share-based payment reserve	12		10			78			-
Accumulated losses			(11,805)			(10,680)			(2,852)
Total Equity			2,257			(576)			7,174

 

¹ See note 2 to the Company financial statements for a description of the prior year restatement.

The Company loss for the year ended 30 June 2021 was £1,125k (2020 restated: £7,828k).

 

 

 

InnovaDerma plc

Company Statement of Changes in Equity

 

	Share capital £'000	Share premium £'000	Foreign exchange reserve £'000	Share-based payment reserve £'000	Accumulated losses attributable to owners of parent £'000	Total equity £'000
Balance at 1 July 2019 as previously reported	1,738	8,288	(109)	-	(1,209)	8,708
Restatements	-	-	109	-	(1,643)	(1,534)
Balance at 1 July 2019 (restated1)	1,738	8,288	-	-	(2,852)	7,174
Loss for the period	-	-	-	-	(7,828)	(7,828)
Total comprehensive income for the year	-	-	-	-	(7,828)	(7,828)
Share-based payment expense	-	-	-	78	-	78
Balance at 30 June 2020 (restated1)	1,738	8,288	-	78	(10,680)	(576)
Loss for the period	-	-	-	-	(1,125)	(1,125)
Total comprehensive income for the year	-	-	-	-	(1,125)	(1,125)
Share-based payment expense	-	-	-	(68)	-	(68)
Issue of new shares	1,121	3,379	-	-	-	4,500
Issue costs deducted from equity		(474)	-	-	-	(474)
Balance at 30 June 2021	2,859	11,193	-	10	(11,805)	2,257

 

¹ See note 2 to the Company financial statements for a description of the prior year restatement.