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Alliance Medical Group Limited
Annual Report & Financial Statements 2020 Page 1
Alliance Medical Group Limited
Annual Report &
Financial Statements
For the year ended 30 September 2020
Company number 08601376
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Alliance Medical Group Limited
Annual Report & Financial Statements 2020 Page 2
Registered Number: 08601376
DIRECTORS
P P Van Der Westhuizen
M D Chapman
H A D Marsh
INDEPENDENT AUDITORS
Deloitte LLP
Four Brindley Place
Birmingham
B1 2HZ
United Kingdom
BANKERS
NatWest Bank plc
1 Town Hall Building
Banbury
Oxon
OX16 8JS
REGISTERED OFFICE
Iceni Centre
Warwick Technology Park
Warwick
CV34 6DA
United Kingdom
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Alliance Medical Group Limited
Annual Report & Financial Statements 2020 Page 3
STRATEGIC REPORT
PRINCIPAL ACTIVITIES
The principal activities of Alliance Medical Group Limited and its subsidiaries (the “Group”) during the year were
the provision of diagnostic imaging services, molecular imaging services and patient services to public health
services and independent organisations across Europe, and the manufacture and distribution of
radiopharmaceuticals.
The Group operates a portfolio of mobile and fixed location scanners, with most revenue generated using
Magnetic Resonance Imaging (“MRI”) and Positron Emission Tomography/Computed Tomography (“PET/CT”)
technology.
The Company acts as a holding company.
REVIEW OF THE BUSINESS
The Group is positioned as Europe’s leading independent provider of medical imaging services, operating
principally in the UK, Germany, Ireland, Italy, The Netherlands and Spain. The key performance indicators
during the year were:
Year ended
30 Sep 2020
Year ended
30 Sep 2019
Turnover
£319.9m
£319.0m
EBITA
1
£25.6m
£36.0m
EBITDA
2
£61.8m
£64.8m
As can be seen from the above, turnover has remained consistent with the prior year despite adverse impact
from the Covid pandemic. Reduction in volumes of scans were felt around the group particularly when strict
restrictions were imposed by local government, mainly impacting the months of March to July 2020. Following
this, volumes have since recovered and are back to approximately 100% of pre-Covid levels in all regions. New
opportunities which became available as a result of the pandemic helped recover lost revenue. Increased costs
were incurred, which negatively impacted EBITDA and EBITA, also as a result of Covid, these mainly related
to PPE costs for staff and reduction in efficiency in operating the units due to additional Covid prevention
measures.
As a result of the above and as can be seen from the Income statement on page 18, cost of sales excluding
depreciation have increased to £194.9m (30 September 2019 £184.4m) and overheads have reduced to
£58.2m (30 September 2019 £65.2m).
IFRS 16 has also been adopted for the first time which has impacted the depreciation number by approximately
£5.5m in the year to 30 September 2020, depreciation in total increasing to £36.2m (30 September 2019
£28.8m).
The strategy of the Group is to add value to healthcare customers through providing practical solutions at the
critical point of clinical decision-making, by helping to plan, develop and deliver clinical pathways that deliver
the best possible patient outcomes. This strategy is delivered through the provision of diagnostic imaging
services, molecular imaging services and patient services, thereby contributing to the effectiveness and
efficiency of healthcare delivery, whilst providing acceptable returns for shareholders.
The Group is also expanding its footprint in the development, manufacture and distribution of
radiopharmaceuticals through the prior acquisition of the Piramal Imaging SA group. This acquisition, together
with the acquisition of Eckert & Ziegler’s cyclotron division during prior periods and the Group’s existing UK-
based radiopharmaceutical business, supports the Group strategy of contributing to the effectiveness and
efficiency of healthcare delivery by enhancing and developing the use of diagnostic imaging services.
A dividend of £nil (2019: £nil) was paid during the period to shareholders.
1
EBITA represents earnings before interest, tax, amortisation of acquired intangibles, profit/(loss) on disposal of property, plant and
equipment, share of profits of joint ventures and exceptional items.
2
EBITDA represents earnings before interest, tax, depreciation, amortisation of acquired intangibles, profit/(loss) on disposal of property,
plant and equipment, share of profits of joint ventures and exceptional items.
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Alliance Medical Group Limited
Annual Report & Financial Statements 2020 Page 4
STRATEGIC REPORT
REVIEW OF THE BUSINESS (continued)
The group does not consider there to be any other key performance indicators, including non-financial key
performance indicators, relevant to the business.
ACQUISITIONS DURING THE PERIOD
During the year the following business was acquired and the transaction has been treated as an acquisition
under IFRS 3 “Business Combinations” (note 5):
a) Alliance Medical S.R.L acquired Priamar S.R.L, consisting of one legal entity.
Total cash consideration transferred for the acquisition during the period was £0.6m and it contributed £0.8m
to revenue and a loss of £0.1m to EBITDA in the post-acquisition period.
SECTION 172(1) STATEMENT
In performing their duties under section 172, the directors of Alliance Medical Group Limited have had regard
to the matters set out in section 172(1) as follows:
The directors’ approach
The Group operates on a decentralised basis, with the Board having established an organisational structure
with clear reporting procedures, lines of responsibility and delegated authority. The Board is ultimately
accountable to the Company’s shareholders for setting the Company’s strategy and for overseeing its
financial and operational performance in line with the parent company’s strategic objectives. Implementation
of the Company’s strategic objectives, as determined and overseen by the Board, is delegated to the local
senior management teams within each region, who are also responsible for the day to day operational
management of their businesses.
The Board cultivates strong relationships with key stakeholders so that it is well placed and sufficiently
informed to take their considerations into account when making decisions where appropriate in order to
discharge their legal obligations and to pursue the Company’s strategic objectives. Our purpose is to create
long-term value for stakeholders and in order to do this, we need to understand our stakeholders and what
matters to them.
Maintaining our licence to operate
In executing our strategy, Directors must act in accordance with a set of general duties detailed in section 172
of the Companies Act 2006. These general duties include a duty to promote the success of the Company, and
specifically to act in a way that the Director considers, in good faith, would be most likely to promote the
success of the Company for the benefit of its shareholders as a whole and, in doing so, having regard
(amongst other matters) to:
Board oversight and Decision making
The board meets on a regular basis to review performance, including:
- Clinical governance and quality measures
- Human resource implications
- Operational delivery
- Financial performance
- Progress towards strategic objectives
Key decisions are taken in these meetings, being those which are material or of strategic importance to the
Group. These decisions are made in line with a Delegation of Authority as set by the Board of the ultimate
parent company, Life Healthcare Group Holdings Limited (“Life Healthcare”). For decisions that do fall outside
the Delegation of Authority, a recommendation is made by the Board to the appropriate sub-committee of Life
Healthcare Group for further consideration.
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Alliance Medical Group Limited
Annual Report & Financial Statements 2020 Page 5
STRATEGIC REPORT (continued)
Examples of key decisions taken during the year include:
Approval of 2021 budget
The board approved the final budget for the 12 months to September 2021, in September 2020, subject to the
final approval of the Life Healthcare Group Board. The budget was based on business plans and targets for
each main area of the Group, including any investments needed to fulfil these.
Capital investment in additional CT scanners
During the year the Company acquired additional CT scanners, in order to support various public healthcare
providers’ response to COVID-19, including within Nightingale Hospitals in England.
Key Stakeholders
As a healthcare provider, we have a large number of stakeholders, including patients, employees, regulators
and commissioners, customers and suppliers.
Having regard to the need to foster the Company’s business relationships with patients
Our patients are central to everything we do. The board receives regular updates on quality and compliance
metrics so that the quality of services provided can be closely monitored. Patient feedback, both positive and
negative, is essential for the development of our service and to ensure we are providing the best possible
care for patients.
Having regard to the interests of the Company’s employees
The Company employs clinical staff and administrative teams to support them and enable their focus on
patient care.
The Company engages with employees through a number of channels, including the Employee Forum,
operational team briefings, regular communications from the UK MD and updates through the intranet.
The Directors monitor the results of regular staff surveys, so that the board is able to discuss human
resourcing matters with the interests of the employees at the centre. Engaging with our employees enables us
to create an inclusive culture and a positive working environment.
Having regard to the need to foster the Company’s business relationships with Regulators & Commissioners
As a provider of healthcare services, it is essential our services are provided in line with local regulator &
commissioners needs. The Board will consider the requirements of regulators & commissioners when making
decision on resource allocations.
With respect to long term decisions
All major decisions are reviewed and validated by the directors at regular board meetings with all key
decisions supported by detailed briefings identifying main issues, main recommendations, and alternatives
considered and the likely long term impact on the company in respect of value creation, its environmental and
community effect and any implications for key stakeholders.
With respect to high standards of business conduct
We acknowledge the responsibility we have to our local community in which we operate and given our global
presence, our duty to act on an international scale. The vast majority of our workforce is drawn from local
residence generating wealth in the areas we operate as well as bolstering employment opportunities.
Having regard to the need to act fairly as between members of the company
The ultimate parent undertaking is Life Healthcare Group Holdings Limited, incorporated in South Africa. The
board at South Africa level are represented within Life UK Holdco Ltd and its subsidiaries as mutual directors
sit on both boards. As a result the directors are fully aligned with its shareholders.
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Alliance Medical Group Limited
Annual Report & Financial Statements 2020 Page 6
STRATEGIC REPORT (continued)
Having regard to the need to foster the Company’s business relationships with Customers
A close working relationship with our customers, who are predominantly public healthcare providers, helps us
to better understand their needs. Our teams use their significant experience in providing high quality
healthcare services to constantly refine what we do to provide continuous improvement in our service offering.
Having regard to the need to foster the Company’s business relationships with Suppliers
The company has good relationships with its key suppliers and often works in partnership with them to deliver
innovative solutions to better benefit other stakeholders.
Having regard to the need to foster the Company’s business impacts on the environment
The Company recognises the serious threat posed by climate change and the urgent need for meaningful
action. As part of their improvement plans, our businesses seek to reduce their GHG emissions over time
through more efficient use of electricity, fuel and heat, and by increasing the proportion of renewable energy
where commercially viable.
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Alliance Medical Group Limited
Annual Report & Financial Statements 2020 Page 7
STRATEGIC REPORT (continued)
MANAGEMENT OF THE PRINCIPAL RISKS AND UNCERTAINTIES FACING THE GROUP
The Directors recognise the importance of good risk management to the success of the Group. The risk
management strategy is based on a clearly defined Group strategy, supported by strong management which is
capable of implementing and adapting the strategy to reflect changing market dynamics and customer needs.
The principal risks and uncertainties facing the Group, the potential impact and mitigation are summarised
below.
Risk Category
Potential Impact
Mitigation
Operational risk
Adverse patient
outcomes
The Group is focused on implementing new systems,
providing high quality training, increasing recruitment and
providing high quality reporting.
Financial risk
Failure to meet growth
targets
Annual budget reviewed by the Directors, with actual
performance against the budget reported monthly;
Clear delegated authority for major capex and material
contracts with Director review and approval;
Centralisation of purchasing scanners and ensuring
appropriate insurance cover.
Competitive risk
Loss of contracts during
competitive retender
Ensuring clinical standards and performance criteria on
existing contracts are maintained;
Strengthening the financial status of the Group;
Broad spread of customers to minimise the impact of
losing an individual customer.
Legislative risk
Increased compliance
costs
Monitoring potential changes to legislation;
Actively engaging with decision makers to drive change;
Regular audits undertaken of compliance with legislation.
Reputational risk
Loss of existing or
future business
Certain categories of scans are double-reported and
emphasis is placed on quality and medical oversight;
Press comments are monitored and responded to as
appropriate.
Pricing risk
Reduced profitability
Entering medium to long term contracts;
Broad customer base to minimise the impact of a single
customer making changes.
Liquidity risk
Withdrawal of funding
Applying cash collection targets throughout the Group;
Utilising debt factoring facilities;
Regular cash flow forecasting, with action taken if needed
to re-time flows.
Credit risk
Increased bad debt
expense
Diversification of credit risk across several European
countries, and regions within those countries;
Broad customer base covering both public and private
sector;
Deferred payment terms offered only to those customers
which demonstrate an appropriate payment history and
satisfy credit-worthiness procedures.
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Alliance Medical Group Limited
Annual Report & Financial Statements 2020 Page 8
STRATEGIC REPORT (continued)
MANAGEMENT OF THE PRINCIPAL RISKS AND UNCERTAINTIES FACING THE GROUP (continued)
Risk Category
Mitigation
Exchange rate
risk
Hedging via a portion of the ultimate Group’s borrowings
being denominated in Euros.
Recruitment risk
Development of undergraduate placement scheme,
graduate recruitment programme and other international
recruitment channels.
Commercial
viability risk
Consideration of which radiopharmaceutical compounds to
develop in the context of potential market size, the
probability of success and the costs to develop;
Regular reviews of decisions to progress taking into
account any further developments;
Partnering with pharmaceutical companies to develop
compounds for use in their own clinical trials.
Supply chain risk
Rolling maintenance programme for cyclotrons;
Reciprocal back up arrangements in place with other
suppliers;
Setup of new cyclotron sites where commercially viable,
e.g. Dinnington site setup in 2020.
Brexit risk
Trying to use varied resourcing strategies, including
increased focus on university partnerships and
apprenticeship to increase availability of qualified
radiographers;
Also hiring from outside of EU.
FUTURE DEVELOPMENTS
The Directors are satisfied with the performance of the Group and do not believe the nature or strategy of the
business will change in the foreseeable future.
Approved by the Board of Directors on 23 December 2020 and signed on its behalf by:
H A D Marsh
Director
Iceni Centre, Warwick Technology Park, Warwick, CV34 6DA, United Kingdom
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Alliance Medical Group Limited
Annual Report & Financial Statements 2020 Page 9
REPORT OF THE DIRECTORS
The Directors present their report together with the audited consolidated financial statements for the year ended
30 September 2020.
RESULTS AND DIVIDENDS
For the year to 30 September 2020 EBITA was £25.6m (30 September 2019: £36.0m) and EBITDA was £61.8m
(30 September 2019: £64.8m). The profit for the year after interest, tax, depreciation, amortisation and
exceptional items was £2.9m (30 September 2019: profit of £6.7m).
During the year a dividend of £nil was paid to shareholders (30 September 2019: £nil). Since year end no
dividends have been proposed.
FUTURE DEVELOPMENTS
The Directors do not believe that the nature or strategy of the business will change in the foreseeable future.
DIRECTORS
The current Directors who served in the period and up to the date of signing were as follows:
P P Van Der Westhuizen
M D Chapman
H A D Marsh
The Directors held no shares in the Company at 30 September 2020 (2019: nil).
DIRECTORS’ AND OFFICERS’ LIABILITY INSURANCE
During the year and at the date of approval of the financial statements there were insurance cover for Directors’
and Officers’ liability as permitted under section 232 (2) of the Companies Act 2006. These are third party
indemnity policy and it’s a Global policy arranged by the company’s Ultimate Parent and controlling party, Life
Healthcare Group Holdings Limited.
RESEARCH AND DEVELOPMENT
Within Life Molecular Imaging, we have a Pipeline of novel imaging agents that address major unmet clinical
needs in neurological, oncological and cardio vascular diseases. These products are at various stages of
development, including some within active clinical trials.
EMPLOYEE INVOLVEMENT
The Group employed an average of 2,125 people across Europe in the period (2019: 2,026). The Group
attaches considerable importance to the involvement of its employees and has continued to keep them informed
on matters affecting them as employees and on the various factors affecting the performance of the Group.
Employees are consulted on issues directly affecting them wherever practicable, and senior managers and
employee representatives from all areas of the business meet to discuss issues. In some areas of the business,
employee surveys are undertaken, using an independent third party, and the results are shared with employees
and are used to drive changes as required, and also outline the impact economic and financial factors on the
company’s performance. Some senior management are also involved in a share scheme to further encourage
their involvement in the company’s success.
EQUALITY
The Group is committed to ensuring that recruitment practices promote equality of opportunity in line with the
2010 Equality Act in the UK and relevant legislation in other regions in which the Group operates. The Group
treats all applicants fairly regardless of their sex, sexual orientation, marital status, race, colour, nationality,
ethnic or nation origin, religion, age, disability and union membership status. The Group ensures that no
requirement or condition is imposed without justification, which could disadvantage an individual on any of the
above grounds.
The Group continues to be supportive of the employment of disabled persons. Applications for employment
from disabled persons are always fully considered, bearing in mind the aptitudes of the applicant concerned.
In the event an existing member of staff becomes disabled, it is the Group’s policy to provide continued
employment wherever practicable in the same or alternative positions and appropriate training is arranged. It
is the policy of the Group that the training, career development and promotion of disabled employees should,
as far as possible, be identical to that of other employees.
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Alliance Medical Group Limited
Annual Report & Financial Statements 2020 Page 10
REPORT OF THE DIRECTORS (continued)
USE OF FINANCIAL INSTRUMENTS
Financial instruments are used by the directors to hedge against the financial risks the company faces, details
of these risks and how they have been mitigated are further explained in the strategic report on pages 6 and 7.
POLICY AND PRACTICE ON PAYMENT OF CREDITORS
It is the Group’s policy to confirm the terms of payment with suppliers when agreeing the terms of the
transaction. Payments are contingent on the supplier providing goods or services to the required standard and
purchasing is sometimes co-ordinated between Group undertakings.
BRANCHES
Alliance Medical Limited, a subsidiary of Alliance Medical Group has a branch in Italy, Alliance Medical Limited
Sede secondaria MB, the results of which are included in these financial statements.
GOING CONCERN
The Group performs regular assessments on the going concern status of the Group. These assessments take
into consideration:
current solvency of the Group;
current liquidity position;
available committed and uncommitted bank facilities;
cash commitments for the next 12 months;
bank covenants; and
debt maturities.
As part of the assessments the board of directors has reviewed the Group budgets, forecasts, available cash
resources and unutilised facilities as well as the debt maturity profile. The forecasts for the Group have been
prepared, covering its future performance, capital and liquidity for a period of 12 months from the date of
approval of these consolidated financial statements including performing sensitivity analyses. The expected
future cash flows were adjusted to reflect the best estimate of the short and longer-term impact of the COVID-
19 pandemic (the pandemic).
To ensure the Group has sufficient cash reserves, in addition to securing bank facilities at Life UK Holdco level,
postponing central bonus payments and deferring capex projects, management has implemented a number of
mitigating actions which include cost and cash preservation levers across the Group’s operations.
The external debt used to provide funding for the group sits outside of this consolidation at Alliance Medical
Group level (the external debt is recorded in Life UK Holdco Limited) and include covenants that must be met
at various measurement points as defined in the contract for these facilities. These covenants are measured
based on the results of the wider group- this being the group headed by Life Healthcare Group Holdings Limited.
Life Healthcare Group Holdings Limited is the ultimate parent undertaking and controlling party of Alliance
Medical Group limited. The wider group successfully refinanced this external debt during March 2020 and
extended the Debt’s maturities. This wider Group is in a strong financial position with net debt to normalised
EBITDA as at 30 September 2020 at 2.96 times (2019: 1.96 times). Given the significant uncertainty caused by
the pandemic, the wider Group pre-emptively negotiated amended bank covenants for the period up to 31
March 2021 and continue to monitor prospective compliance with such covenants. In addition, banking facilities
have been increased and the wider Group’s committed undrawn bank facilities as at 30 September 2020 are
R6.3 billion.
The Group’s assessments and sensitivity analysis show that the Group has sufficient accessible capital and
liquidity to continue to meet its obligations as they fall due and as a result it is appropriate to prepare these
consolidated financial statements on a going concern basis.
POLITICAL AND CHARITABLE DONATIONS
The Group made £nil (2019: £nil) charitable donations and £nil (2019: £nil) political donations during the period.
FINANCIAL RISK MANAGEMENT
For measures taken by the Directors to alleviate the financial risks borne by the group, please see the further
detail in the strategic report on pages 7 to 8.
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Annual Report & Financial Statements 2020 Page 11
REPORT OF THE DIRECTORS (continued)
ENERGY AND CARBON REPORTING
The Group recognises the serious threat posed by climate change and the urgent need for meaningful action.
As part of their improvement plans, our businesses seek to reduce their GHG emissions over time through
more efficient use of electricity, fuel and heat, and by increasing the proportion of renewable energy where
commercially viable.
Alliance Medical submitted its four-yearly ESOS2 Energy Consumption Report in December 2019. The report
provides greater visibility of our energy use across all our supply channels. Alliance Medical is also required
to submit a report in terms of government’s streamlined energy and carbon reporting (SECR) framework for
the first time this year, providing commentary on the practical changes undertaken to improve energy
consumption and, consequently, our environmental footprint. We are also busy transforming our car fleet
scheme to introduce electric vehicles.
Alliance Medical is particularly exposed to radioactive waste due to the nature of its business. We manage
this carefully, along with the control and disposal of general, infectious and hazardous medical waste. We
comply with international waste disposal guidelines and local in-country requirements throughout this
process.
Engagement with suppliers, customers and others
For further detail on the business relationships of the group, please refer to the Section 172 statement in the
strategic report shown on pages 4 to 6.
POST BALANCE SHEET EVENTS
The Covid pandemic is considered to remain a significant event after the balance sheet date, even though it
has also impacted the period in these financial statements. The impact of Covid is still being felt across the
globe within the healthcare industry, including the countries that Alliance Medical Group operate in. Following
the balance sheet date, a number of European Countries, including the UK, has entered second national lock
down. The effects of Covid are still felt around the business, however volumes are almost back to 100% of
pre-Covid levels and systems and protocols put in place during wave 1 of the pandemic now mean that the
business can continue to operate at a more effective level during the ongoing Covid impacts. This is as well
as opportunities taken as a result of the pandemic, have meant that the directors do not believe that the
effects of Covid post the balance sheet date lead to a material impact in the numbers presented and
therefore no adjustments are required.
As well as the above there are ongoing discussions between the UK and the EU in relation to a trade deal
following the UKs exit from the EU effective from 1 January 2021. Currently there are no details regarding the
likelihood or the contents of such a deal. As a result it cannot be estimated what impacts Brexit will have on the
Company and therefore no changes have been made to these financial statements.
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REPORT OF THE DIRECTORS (continued)
AUDITORS
Each of the persons who is a director at the date of approval of this report confirms that:
so far as the director is aware, there is no relevant audit information of which the Company's auditors are
unaware; and
the director has taken all the steps that he/she ought to have taken as a director in order to make
himself/herself aware of any relevant audit information and to establish that the company's auditors are
aware of that information.
This confirmation is given and should be interpreted in accordance with the provisions of s418 of the
Companies Act 2006.
Deloitte LLP have expressed their willingness to continue in office as auditors and appropriate arrangements
have been put in place for them to be deemed reappointed as auditors in the absence of an Annual General
Meeting.
Approved by the Board of Directors on 23 December 2020 and signed on its behalf by:
H A D Marsh
Director
Iceni Centre
Warwick Technology Park
Warwick
CV34 6DA
United Kingdom
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REPORT OF THE DIRECTORS (continued)
STATEMENT OF DIRECTORS’ RESPONSIBILITIES
The directors are responsible for preparing the Annual Report and the financial statements in accordance with
applicable law and regulation.
Company law requires the directors to prepare financial statements for each financial year. Under that law the
directors have prepared the group financial statements in accordance with International Financial Reporting
Standards (IFRSs) as adopted by the European Union and the parent company, company financial statements
have been prepared in accordance with United Kingdom Generally Accepted Accounting Practice (United
Kingdom Accounting Standards and applicable law), including FRS 101 “Reduced Disclosure Framework.
Under company law the directors must not approve the financial statements unless they are satisfied that they
give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that
period. In preparing the parent company financial statements, the directors are required to:
select suitable accounting policies and then apply them consistently;
make judgments and accounting estimates that are reasonable and prudent;
state whether applicable UK Accounting Standards have been followed, subject to any material
departures disclosed and explained in the financial statements; and
prepare the financial statements on the going concern basis unless it is inappropriate to presume that
the company will continue in business.
In preparing the group financial statements, International Accounting Standard 1 requires that directors:
properly select and apply accounting policies;
present information, including accounting policies, in a manner that provides relevant, reliable,
comparable and understandable information;
provide additional disclosures when compliance with the specific requirements in IFRSs are
insufficient to enable users to understand the impact of particular transactions, other events and
conditions on the entity’s financial position and financial performance; and
make an assessment of the company’s ability to continue as a going concern.
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.
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INDEPENDENT AUDITORS’ REPORT TO THE MEMBERS OF ALLIANCE MEDICAL GROUP LIMITED
Report on the audit of the financial statements
Opinion
In our opinion:
the financial statements of Alliance Medical Group Limited (the ‘parent company’) and its subsidiaries
(the ‘group’) give a true and fair view of the state of the group’s and of the parent company’s affairs as
at 30 September 2020 and of the group’s profit for the year then ended;
the group financial statements have been properly prepared in accordance with International
Financial Reporting Standards (IFRSs) as adopted by the European Union;
the parent company financial statements have been properly prepared in accordance with United
Kingdom Generally Accepted Accounting Practice, including Financial Reporting Standard 101
“Reduced Disclosure Framework”; and
the financial statements have been prepared in accordance with the requirements of the Companies
Act 2006.
We have audited the financial statements which comprise:
the consolidated income statement;
the consolidated statement of comprehensive income;
the consolidated and parent company balance sheets;
the consolidated and parent company statements of changes in equity;
the consolidated cash flow statement;
the related notes to the consolidated financial statements 1 to 30; and
the related notes to the parent company financial statements 1 to 13
The financial reporting framework that has been applied in the preparation of the group financial statements is
applicable law and IFRSs as adopted by the European Union. The financial reporting framework that has
been applied in the preparation of the parent company financial statements is applicable law and United
Kingdom Accounting Standards, including Financial Reporting Standard 101 “Reduced Disclosure
Framework” (United Kingdom Generally Accepted Accounting Practice).
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and
applicable law. Our responsibilities under those standards are further described in the auditor's
responsibilities for the audit of the financial statements section of our report.
We are independent of the group and the parent company in accordance with the ethical requirements that
are relevant to our audit of the financial statements in the UK, including the Financial Reporting Council’s (the
‘FRC’s’) Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these
requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a
basis for our opinion.
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Annual Report & Financial Statements 2020 Page 15
INDEPENDENT AUDITORS’ REPORT TO THE MEMBERS OF ALLIANCE MEDICAL GROUP LIMITED
(continued)
Conclusions relating to going concern
We are required by ISAs (UK) to report in respect of the following matters where:
the directors’ use of the going concern basis of accounting in preparation of the financial statements
is not appropriate; or
the directors have not disclosed in the financial statements any identified material uncertainties that
may cast significant doubt about the group’s or the parent company’s ability to continue to adopt the
going concern basis of accounting for a period of at least twelve months from the date when the
financial statements are authorised for issue.
We have nothing to report in respect of these matters.
Other information
The directors are responsible for the other information. The other information comprises the information
included in the annual report, other than the financial statements and our auditor’s report thereon. Our opinion
on the financial statements does not cover the other information and, except to the extent otherwise explicitly
stated in our report, we do not express any form of assurance conclusion thereon.
In connection with our audit of the financial statements, our responsibility is to read the other information and,
in doing so, consider whether the other information is materially inconsistent with the financial statements or
our knowledge obtained in the audit or otherwise appears to be materially misstated. If we identify such
material inconsistencies or apparent material misstatements, we are required to determine whether there is a
material misstatement in the financial statements or a material misstatement of the other information. If,
based on the work we have performed, we conclude that there is a material misstatement of this other
information, we are required to report that fact.
We have nothing to report in respect of these matters.
Responsibilities of directors
As explained more fully in the directors’ responsibilities statement, the directors are responsible for the
preparation of the financial statements and for being satisfied that they give a true and fair view, and for such
internal control as the directors determine is necessary to enable the preparation of financial statements that
are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, the directors are responsible for assessing the group’s and the parent
company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern
and using the going concern basis of accounting unless the directors either intend to liquidate the group or the
parent company or to cease operations, or have no realistic alternative but to do so.
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Annual Report & Financial Statements 2020 Page 16
INDEPENDENT AUDITORS’ REPORT TO THE MEMBERS OF ALLIANCE MEDICAL GROUP LIMITED
(continued)
Auditor’s responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free
from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our
opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in
accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise
from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be
expected to influence the economic decisions of users taken on the basis of these financial statements.
A further description of our responsibilities for the audit of the financial statements is located on the FRC’s
website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s report.
Report on other legal and regulatory requirements
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of the audit:
the information given in the strategic report and the directors’ report for the financial year for which
the financial statements are prepared is consistent with the financial statements; and
the strategic report and the directors’ report have been prepared in accordance with applicable legal
requirements.
In the light of the knowledge and understanding of the group and of the parent company and their
environment obtained in the course of the audit, we have not identified any material misstatements in the
strategic report or the directors’ report.
Matters on which we are required to report by exception
Under the Companies Act 2006 we are required to report in respect of the following matters if, in our opinion:
adequate accounting records have not been kept by the parent company, or returns adequate for our
audit have not been received from branches not visited by us; or
the parent company financial statements are not in agreement with the accounting records and
returns; or
certain disclosures of directors’ remuneration specified by law are not made; or
we have not received all the information and explanations we require for our audit.
We have nothing to report in respect of these matters.
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Annual Report & Financial Statements 2020 Page 17
INDEPENDENT AUDITORS’ REPORT TO THE MEMBERS OF ALLIANCE MEDICAL GROUP LIMITED
(continued)
Use of our report
This report is made solely to the company’s members, as a body, in accordance with Chapter 3 of Part 16 of
the Companies Act 2006. Our audit work has been undertaken so that we might state to the company’s
members those matters we are required to state to them in an auditor’s report and for no other purpose. To
the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the
company and the company’s members as a body, for our audit work, for this report, or for the opinions we
have formed.
Peter Gallimore FCA (Senior statutory auditor)
For and on behalf of Deloitte LLP
Statutory Auditor
Birmingham, United Kingdom
December 2020
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23
Alliance Medical Group Limited
Annual Report & Financial Statements 2020 Page 18
CONSOLIDATED INCOME STATEMENT
For the year ended 30 September 2020
Note
For the year to
30 September
2020
£m
For the year to
30 September
2019
£m
Revenue
4
319.9
319.0
Cost of sales
(231.1)
(213.2)
Gross profit
88.8
105.8
Administrative expenses
(68.2)
(74.7)
Exceptional items
6
(0.7)
(1.8)
Profit /(loss) before interest & taxation
7
19.9
29.3
Finance costs
9
(14.9)
(16.8)
Share of profit of joint ventures
13
0.5
0.6
Profit/(loss) before taxation
5.5
13.1
Taxation
10
(2.6)
(6.4)
Profit/(loss) for the year
2.9
6.7
Profit/(loss) for the year attributable to:
The equity shareholders of the Company
2.9
6.7
Non-controlling interests
-
-
Profit for the year
2.9
6.7
The notes on pages 23 to 69 are an integral part of these consolidated financial statements.
The Group’s activities all derive from continuing operations. There is no material difference between the profit
on ordinary activities before taxation and the profit for the financial periods stated above and their historical
cost equivalents.
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Annual Report & Financial Statements 2020 Page 19
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
For the year ended 30 September 2020
Year to
30 September
2020
Year to
30 September
2019
£m
£m
Items that will not be reclassified subsequently to profit or
loss:
Remeasurement of net defined benefit liability
0.2
(0.3)
Items that may be reclassified subsequently to profit or loss:
Foreign exchange differences on translation of foreign operations
0.3
(0.4)
Other comprehensive income/(expense) for the year, net of
income tax
0.5
(0.7)
Profit in the year
2.9
6.7
Total comprehensive income in the year
3.4
6.0
Attributable to:
Owners of the parent
3.4
6.1
Non-controlling interests
-
(0.1)
Total comprehensive income in the year
3.4
6.0
The notes on pages 23 to 69 are an integral part of these consolidated financial statements.
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Alliance Medical Group Limited
Annual Report & Financial Statements 2020 Page 20
CONSOLIDATED BALANCE SHEET Company registration number 08601376
As at 30 September 2020
At 30 Sep 2020
At 30 Sep 2019
Note
£m
£m
ASSETS
Non-current assets
Property, plant and equipment
11
242.5
201.1
Goodwill
12
99.9
97.7
Other intangible assets
12
37.7
38.7
Investment in joint ventures
13
3.1
2.8
Other investments
14
0.9
0.6
Deferred tax assets
22
6.1
7.2
390.2
348.1
Current assets
Inventories
15
2.9
1.9
Trade and other receivables
16
61.4
67.4
Current income tax receivable
0.7
-
Cash and cash equivalents
17
63.9
37.6
128.9
106.9
TOTAL ASSETS
519.1
455.0
LIABILITIES
Non-current liabilities
Trade and other payables
18
(32.3)
(27.4)
Borrowings
19
(324.1)
(257.1)
Deferred tax liabilities
22
(1.8)
(2.1)
Retirement benefit obligations
23
(7.4)
(7.0)
Provisions
24
(4.3)
(4.6)
(369.9)
(298.2)
Current liabilities
Trade and other payables
18
(106.1)
(111.4)
Borrowings
19
(20.8)
(37.4)
Current income tax payable
(1.4)
(1.3)
Provisions
24
(11.6)
(0.9)
(139.9)
(151.0)
TOTAL LIABILITIES
(509.8)
(449.2)
NET ASSETS
9.3
5.8
EQUITY
Share capital
25
-
-
Share premium account
127.4
127.4
Translation reserve
0.7
0.3
Other reserves
(126.6)
(126.6)
Retained earnings
7.8
4.7
Equity attributable to shareholders of the Company
9.3
5.8
Non-controlling interests
-
-
TOTAL EQUITY
9.3
5.8
The notes on pages 23 to 69 form an integral part of these financial statements.
The financial statements on pages 18 to 69 were approved by the Board of Directors on 23 December 2020
and were signed on its behalf by:
H A D Marsh
Director
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Annual Report & Financial Statements 2020 Page 21
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the year ended 30 September 2020
Share
capital
£m
Share
premium
account
£m
Translation
reserve
£m
Other
reserves
£m
Retained
earnings
£m
Equity
share-
holders
£m
Non-
controlling
interests
£m
Total
equity
£m
At 1 October 2018
-
127.4
0.6
(126.6)
(1.7)
(0.3)
0.1
(0.2)
Profit for the year
-
-
-
-
6.7
6.7
-
6.7
Actuarial valuation of
pensions
-
-
-
-
(0.3)
(0.3)
-
(0.3)
Foreign exchange loss in
the year
-
-
(0.3)
-
-
(0.3)
(0.1)
(0.4)
Total Comprehensive
income
-
-
(0.3)
-
6.4
6.1
(0.1)
6.0
At 30 September 2019
-
127.4
0.3
(126.6)
4.7
5.8
-
5.8
Profit for the year
-
-
-
-
2.9
2.9
-
2.9
Actuarial valuation of
pensions
-
-
-
-
0.2
0.2
-
0.2
Foreign exchange gain in
the year
-
-
0.4
-
-
0.4
-
0.4
Total Comprehensive
income
-
-
0.4
-
3.1
3.5
-
3.5
At 30 September 2020
-
127.4
0.7
(126.6)
7.8
9.3
-
9.3
The notes on pages 23 to 69 form an integral part of these financial statements.
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Annual Report & Financial Statements 2020 Page 22
CONSOLIDATED CASH FLOW STATEMENT
For the year ended 30 September 2020
Year to
30 Sep 2020
Year to 30
Sep 2019
Note
£m
£m
Cash generated from operations
27
78.0
64.9
Interest paid
(11.6)
(11.1)
Income tax paid
(2.1)
(8.7)
Net cash generated from operating activities
64.3
45.1
Cash flows from investing activities
Net cash paid for acquisitions
(0.8)
(9.4)
Purchase of property, plant and equipment
(42.3)
(46.0)
Purchase of intangible assets
(3.5)
(6.0)
Proceeds from sale of property, plant and equipment
0.8
0.9
Net cash used in investing activities
(45.8)
(60.5)
Cash flows from financing activities
Repayment of borrowings
(17.6)
(5.2)
Drawdown of borrowings
32.4
14.5
Repayment of finance leases
(14.9)
(14.1)
Drawdown of finance leases
12.6
11.5
Repayment of principal lease obligations
(5.2)
-
Net cash generated from financing activities
7.3
6.7
Net increase/(decrease) in cash and cash equivalents
25.8
(8.7)
Cash and cash equivalents at the beginning of the period
37.6
46.4
Exchange differences
0.5
(0.1)
Cash and cash equivalents at end of period
17
63.9
37.6
Net cash and cash equivalents comprises:
Cash at bank
63.9
37.6
The notes on pages 23 to 69 form an integral part of these financial statements.
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Annual Report & Financial Statements 2020 Page 23
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 30 September 2020
1. GENERAL
The Company is a private company, limited by shares and is incorporated in the United Kingdom under
Companies Act 2006 and registered in England. The address of the Registered Office and principal place of
business is shown on page 2.
The principal activities of the Group are the provision of diagnostic imaging services, molecular imaging services
and patient services to public health services and independent organisations across Europe, and the
manufacture and distribution of radiopharmaceuticals.
2. ACCOUNTING POLICIES
The principal accounting policies applied in the preparation of these consolidated financial statements are set
out below.
Basis of preparation
These financial statements have been prepared in accordance with IFRS as adopted by the European Union
(“adopted IFRS”), and with those parts of the Companies Act 2006 applicable to companies reporting under
adopted IFRS. The Company has elected to prepare its Company financial statements in accordance with
applicable accounting standards in the United Kingdom and Companies Act 2006; these are presented on
pages 18 to 69.
These financial statements have been prepared on a going concern basis, under the historical cost convention
except where the measurement of balances at fair value is required. The financial statements have been
prepared in Pounds Sterling, which is the same as the functional currency of the Company, and all values are
rounded to the nearest one hundred thousand (£0.1m) except where otherwise stated. The following accounting
policies are those that the Group considers to be its principal accounting policies in respect of the consolidated
results.
Going Concern
The Group performs regular assessments on the going concern status of the Group. These assessments take
into consideration:
current solvency of the Group;
current liquidity position;
available committed and uncommitted bank facilities;
cash commitments for the next 12 months;
bank covenants; and
debt maturities.
As part of the assessments the board of directors has reviewed the Group budgets, forecasts, available cash
resources and unutilised facilities as well as the debt maturity profile. The forecasts for the Group have been
prepared, covering its future performance, capital and liquidity for a period of 12 months from the date of
approval of these consolidated financial statements including performing sensitivity analyses. The expected
future cash flows were adjusted to reflect the best estimate of the short and longer-term impact of the COVID-
19 pandemic (the pandemic).
To ensure the Group has sufficient cash reserves, in addition to securing bank facilities at Life UK Holdco level,
postponing central bonus payments and deferring capex projects, management has implemented a number of
mitigating actions which include cost and cash preservation levers across the Group’s operations.
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Alliance Medical Group Limited
Annual Report & Financial Statements 2020 Page 24
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 30 September 2020
2. ACCOUNTING POLICIES (continued)
The external debt used to provide funding for the group sits outside of this consolidation at Alliance Medical
Group level (the external debt is recorded in Life UK Holdco Limited) and include covenants that must be met
at various measurement points as defined in the contract for these facilities. These covenants are measured
based on the results of the wider group- this being the group headed by Life Healthcare Group Holdings Limited.
Life Healthcare Group Holdings Limited is the ultimate parent undertaking and controlling party of Alliance
Medical Group limited. The wider group successfully refinanced this external debt during March 2020 and
extended the Debt’s maturities. This wider Group is in a strong financial position with net debt to normalised
EBITDA as at 30 September 2020 at 2.96 times (2019: 1.96 times). Given the significant uncertainty caused by
the pandemic, the wider Group pre-emptively negotiated amended bank covenants for the period up to 31
March 2021 and continue to monitor prospective compliance with such covenants. In addition, banking facilities
have been increased and the wider Group’s committed undrawn bank facilities as at 30 September 2020 are
R6.3 billion.
The Group’s assessments and sensitivity analysis show that the Group has sufficient accessible capital and
liquidity to continue to meet its obligations as they fall due and as a result it is appropriate to prepare these
consolidated financial statements on a going concern basis.
Standards and interpretations effective in the current period
In the current financial year, the Group has adopted the following new and revised Standards, Amendments
and Interpretations. Their adoption has not had a significant impact on the comparative amounts reported in
these Financial Statements but IFRS 16 has had a significant impact on the current year:
IFRS 16: Leases (effective from 01 October 2019)
The Group adopted IFRS 16 “Leases” on 1 October 2019 using the modified retrospective approach, resulting
in no adjustments to the prior year comparatives. IFRS 16 superseded the previous lease guidance, including
IAS 17: “Leases” and related interpretations. IFRS 16 requires all leases, except where exemptions are
applied, to be recognised on the Balance Sheet as a lease liability with a corresponding right-of-use asset
presented within property, plant and equipment. As a result of the transition to IFRS 16, the Group recognised
right-of-use assets of £40.7 million and lease liabilities of £40.7 million at the date of transition.
As part of the initial application of IFRS 16, the Group has applied the following exemptions available: IFRS
16 guidance has not been applied to leases with a lease term which ends within 12 months of the date of
initial application or to leases of low value assets. Payments relating to these leases are recognised as an
expense in the Income Statement over the lease term and no right-of-use asset or lease liability is
recognised. The group has also chosen to apply the practical expedient in paragraph C3 of IFRS 16.
The lease liabilities were measured at the present value of the remaining lease payments discounted at the
incremental borrowing rate as at 1 October 2019. On transition, the right-of-use assets were measured at an
amount equal to the lease liability, adjusted by the amount of any prepaid or accrued lease payments. When
calculating the lease liabilities all elements of the lease were considered, including variable lease payments,
extension options and residual value guarantees, these were reviewed on a lease by lease basis.
The variable lease payments relate to four specific building rental contracts in Italy, and are specific
agreements with the building owners. The annual amounts payable vary as the lease goes on, however this is
pre-agreed and there are no ongoing variables which can affect the cost of the lease. As a result, the changes
in the lease cost has already been considered when completing the IFRS 16 valuation and so there are no
anticipated potential variances because of these. There is not deemed to be a material impact on the
calculation because of these leases.
There are also Italian building rentals with options to extend the lease period, the standard lease period for
these leases is 6 years, but with an option to extend for another 6 years. Due to the nature of the leases
(buildings) when carrying out the IFRS 16 valuations it has been assumed these will be extended as they are
most likely to be.
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Annual Report & Financial Statements 2020 Page 25
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 30 September 2020
2. ACCOUNTING POLICIES (continued)
In order to calculate the incremental borrowing rate, reference interest rates were derived from current finance
leases or external borrowing rates. Interest rates were obtained for all key currencies and were subsequently
adjusted to reflect the country risk premium and a leasing risk premium. The leasing risk premium derived
was adjusted to reflect whether the lease was deemed to be secured or unsecured. The Group applied a
single discount rate to a portfolio of leases with similar characteristics, in line with the practical expedient
available under IFRS 16. For leases that were classified as finance leases under IAS 17, the carrying amount
of the right-of-use asset and the corresponding lease liability at 1 October 2019 was determined to be the
carrying amount of the lease asset and lease liability under IAS 17 immediately before that date. Where it
has been applicable and relevant to do so, the same incremental borrowing rate has been applied to a similar
group of assets. The weighted average borrowing rate applied to the leases during the year was 3.35%.
The following explains the difference between operating lease commitments disclosed, applying IAS 17, at 30
September 2019 and the lease liability recognised on adoption of IFRS 16 at 1 October 2019.
£m
Total minimum lease payments reported at 30 September 2019 under IAS 17
25.7
Change in assessment of lease term under IFRS 16
22.9
Leases outside the scope of IFRS 16
(0.2)
Impact of discounting lease liability under IFRS 16
(7.7)
Lease liability recognised on transition to IFRS 16 at 1 October 2019
40.7
New Standards, Amendments and Interpretations in issue but not yet effective
At the date of authorisation of these financial statements, the Group has not applied the following new and
revised IFRS Standards that have been issued but are not yet effective:
IFRS 17
Insurance Contracts
IFRS 10 and IAS 28
(amendments)
Sale or Contribution of Assets between an Investor and its Associate
or Joint Venture
Amendments to IAS 1
Classification of Liabilities as Current or Non-current
Amendments to IFRS 3
Reference to the Conceptual Framework
Amendments to IAS 16
Property, Plant and Equipment—Proceeds before Intended Use
Amendments to IAS 37
Onerous Contracts – Cost of Fulfilling a Contract
Annual Improvements to IFRS
Standards 2018-2020 Cycle
Amendments to IFRS 1 First-time Adoption of International Financial
Reporting Standards, IFRS 9 Financial Instruments, IFRS 16
Leases, and IAS 41 Agriculture
The directors do not expect that the adoption of the Standards listed above will have a material impact on the
financial statements of the Group in future periods.
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Annual Report & Financial Statements 2020 Page 26
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 30 September 2020
2. ACCOUNTING POLICIES (continued)
Basis of consolidation
The consolidated financial statements of the Group have been prepared under the principles of acquisition
accounting.
Subsidiaries are entities over which the Group has control. Control is achieved when the Group is exposed to,
or has rights to, variable returns from its involvement with the investee and has the ability to affect those returns
through its power over the investee. Subsidiaries are fully consolidated from the date that control commences
until the date that control ceases.
Inter-company transactions, balances and unrealised gains and losses on transactions between Group
companies are eliminated in full on consolidation.
Non-controlling interests in the net assets of consolidated subsidiaries are presented separately from the
Group’s equity therein. Non-controlling interests in the net assets consist of the amount of those interests at the
date of the original business combination and the non-controlling parties’ share of changes in equity since the
date of combination. Losses applicable to the non-controlling parties in excess of the non-controlling parties’
interest in the subsidiary’s equity are allocated against the interests of the Group except to the extent that the
non-controlling parties have a binding obligation and are able to make an additional investment to cover the
losses.
The Group applies IFRS 11 to all joint arrangements. Under IFRS 11 investments in joint arrangements are
classified as either joint operations or joint ventures. The Group’s investments in its joint ventures are accounted
for using the equity method. Under the equity method, joint ventures are initially recognised at cost and the
carrying amount of the investment is subsequently adjusted to recognise changes in the Group’s share of net
assets of the joint venture since the acquisition date. Goodwill relating to the joint ventures is included in the
carrying amount of the investment and is neither amortised nor individually tested for impairment. The
consolidated income statement reflects the Group’s share of the results of operations of the joint ventures. After
application of the equity method, the Group determines whether it is necessary to recognise an impairment loss
on its investment in its joint ventures. At each reporting date, the Group determines whether there is objective
evidence that the investment in the joint ventures is impaired. If there is such evidence, the Group calculates
the amount of impairment as the difference between the recoverable amount of the investment in the joint
ventures and its carrying value, and then recognises the loss as ‘share of profit of joint ventures’ in the
consolidated income statement.
Business combinations
Acquisitions of subsidiaries are accounted for using the purchase method. The cost of the acquisition is
measured as the aggregate of the fair values, at the date of exchange, of assets given, liabilities incurred or
assumed, and equity instruments issued by the Group in exchange for control of the acquiree, plus any costs
directly attributable to the business combination. The acquiree’s identifiable assets, liabilities and contingent
liabilities that meet the conditions for recognition under IFRS 3 are recognised at their fair value at the
acquisition date.
Where part or all of the consideration is deferred or contingent on uncertain future events, the cost of acquisition
initially recorded is a reasonable estimate of the fair value of amounts expected to be payable in the future,
discounted to present value. The cost of acquisition is adjusted when revised estimates are made, with
corresponding adjustments made to the income statement.
When the accounting for a business combination can only be determined provisionally, provisional values are
used. These provisional values are adjusted within 12 months of the acquisition date and once the initial
accounting has been completed by adjusting the fair values of the identifiable net assets acquired and the
goodwill arising on consolidation.
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Alliance Medical Group Limited
Annual Report & Financial Statements 2020 Page 27
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 30 September 2020
2. ACCOUNTING POLICIES (continued)
Goodwill
Goodwill arising on consolidation represents the excess of the cost of the business combination over the
Group’s interest in the fair value of the identifiable assets, liabilities and contingent liabilities of a subsidiary at
the date of acquisition. If the fair value of the net assets acquired is in excess of the aggregate consideration
transferred, the gain is recognised as profit.
The financial statements of subsidiaries used in the preparation of the consolidated financial statements are
prepared based on consistent accounting policies with the Group. The costs of integrating and reorganising
acquired businesses are charged to the post-acquisition income statement.
Goodwill is subsequently carried at cost less any accumulated impairment losses. For the purpose of
impairment testing, goodwill is allocated to each of the Group’s cash generating units expected to benefit from
the synergies of the combination. Cash generating units to which goodwill has been allocated are tested for
impairment annually or more frequently if there is an indication of potential impairment. 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 goodwill allocated to the unit and then to other assets of the unit pro-rata
on the basis of the carrying amount of each asset in the unit. Any impairment loss recognised for goodwill is
not reversed in a subsequent year.
On disposal of a subsidiary, the attributable goodwill is included in the determination of the profit or loss on
disposal.
Intangible assets
Intangible assets that are acquired by the Group are stated at cost, which is, if acquired as part of a business
combination, the fair value of the intangible asset on the date of acquisition, or, in the case of individually
purchased intangible assets, the amount paid, less accumulated amortisation and impairment losses.
Amortisation is charged to the income statement on a straight line basis over the estimated useful lives as
follows:
Contractual and non contractual customer relationships 1 to 10 years
Brand name 4 years
Purchased technology licences 3 to 7 years
Product development costs Over the life of the relevant patent period, once
revenue starts to be generated
Amortisation periods are reviewed annually and adjusted if appropriate.
Internally generated intangible assets are recognised in the balance sheet as assets only in respect of product
development costs. For all other categories internally generated intangible assets are not recognised as assets
in the balance sheet and therefore expenditure in generating these is charged to the income statement as
incurred.
Costs incurred in the development of products that are assessed to be viable and likely to generate profitable
revenue streams are capitalised to the extent that they are directly attributable to the product and capitalisation
does not result in the carrying value being above the recoverable amount from the product.
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Alliance Medical Group Limited
Annual Report & Financial Statements 2020 Page 28
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 30 September 2020
2. ACCOUNTING POLICIES (continued)
Property, plant and equipment
Property, plant and equipment held for use in the business is stated in the balance sheet at book value, being
cost less accumulated depreciation and accumulated impairment losses.
Depreciation is charged so as to write off the cost over the estimated useful lives, using the straight line method
as follows:
Land Not depreciated
Freehold property 50 years
Leasehold property and improvements Period of the lease, or the length of the contract to
which the property relates, if shorter
Scanning equipment 5 to 10 years, or the length of the contract to which
the equipment relates
Motor vehicles 3 to 4 years
Other plant and equipment 3 to 25 years
Assets held under finance leases are depreciated over the shorter of their expected useful lives or the lease
term. When there is reasonable certainty that the ownership of the leased asset will be obtained by the lessee
at the end of the lease term the assets held under finance leases will be depreciated over their useful economic
lives.
Assets under construction are transferred to their respective asset class and commence depreciation on the
date commercial operation commences.
Residual values, remaining useful lives and depreciation methods are reviewed annually and adjusted if
appropriate.
Impairment of property, plant and equipment and intangible assets
At each balance sheet date, the Group reviews the carrying amounts of its property, plant and equipment and
intangible assets, other than goodwill and other assets which are not amortised, to determine whether there is
any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable
amount of the asset is estimated in order to determine the extent of any impairment loss. Where it is not possible
to estimate the recoverable amount of an individual asset, because the asset does not generate cash inflows
that are largely independent, the Group estimates the recoverable amount of the cash generating unit to which
the asset belongs. Where a reasonable and consistent basis of allocation can be identified, corporate assets
are also allocated to individual cash generating units.
The recoverable amount is the higher of fair value less costs to sell, and value in use. In assessing value in
use, the estimated future cash flows, which are not adjusted for risk, are discounted to their present value using
a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific
to the asset.
If the recoverable amount of an asset (or cash generating unit) is estimated to be less than its carrying amount,
the carrying amount of the asset (or cash generating unit) is reduced to its recoverable amount and an
impairment loss is recognised immediately.
Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash generating unit) is
increased to the revised estimate of its recoverable amount, but only to the extent that the increased carrying
amount does not exceed the carrying amount that would have been determined had no impairment loss been
recognised for the asset (or cash generating unit) in prior years. A reversal of an impairment loss is recognised
immediately.
Goodwill and other intangible assets which are not amortised are reviewed annually for impairment losses.
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Alliance Medical Group Limited
Annual Report & Financial Statements 2020 Page 29
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 30 September 2020
2. ACCOUNTING POLICIES (continued)
Inventories
Inventories are valued at the lower of cost and net realisable value on a first-in, first-out basis. Cost comprises
goods held for resale, direct materials and, where applicable, direct labour costs and those overheads that have
been incurred in bringing the inventories to their present location and condition. Net realisable value represents
the estimated selling price less all estimated costs of completion and associated selling costs. Where
necessary, an appropriate allowance is made for obsolete, slow-moving and defective inventories.
Financial instruments
The Group classifies financial instruments, or their component parts, on initial recognition as financial assets,
financial liabilities or equity instruments according to the substance of the contractual arrangements entered
into.
An equity instrument is any contract that evidences a residual interest in the assets of the Group after deducting
all of its liabilities. Equity instruments issued by the Group are recorded at the proceeds received, net of direct
issue costs.
All financial instruments are initially recognised at fair value. After initial recognition, loans and receivables,
including short-term receivables, and financial liabilities, including trade payables, are carried at amortised cost,
as reduced by appropriate allowances for estimated irrecoverable amounts. Derivative financial instruments
are carried at fair value.
For trade and other receivables and contract assets, the simplified approach permitted under IFRS 9 is
applied. The simplified approach requires that at the point of initial recognition the expected credit loss across
the life of the receivable must be recognised. As these balances do not contain a significant financing
element, the simplified approach relating to expected lifetime losses is applicable under IFRS 9. The Group
determines the expected credit losses on these items by using a provision matrix, estimated based on
historical credit loss experience based on the past due status of the debtors, adjusted as appropriate to reflect
current conditions and estimates of future economic conditions. Accordingly, the credit risk profile of these
assets is presented based on their past due status in terms of the provision matrix.
Cash and cash equivalents are also subject to impairment requirements.
Cash and cash equivalents
Cash and cash equivalents comprise cash at bank and in hand and other short-term highly liquid deposits with
an original maturity at acquisition of three months or less. Cash held on deposit with an original maturity at
acquisition of more than three months but less than twelve months is disclosed as current asset investments.
For the purposes of the cash flow statement, cash and cash equivalents consist of cash and cash equivalents
as defined above, net of bank overdrafts that are repayable on demand that are an integral part of the Group’s
cash management.
Borrowings
Borrowings are recognised initially at fair value, net of transaction costs incurred. Borrowings are subsequently
stated at amortised cost with any difference between the proceeds (net of transaction costs) and the redemption
value being recognised in the income statement over the expected life of the borrowings using the effective
interest method. Finance costs, which are the difference between the net proceeds and the total amount of
payments made in respect of the instruments, are spread on a straight line basis over the expected life of the
debt.
Provisions
Provisions are recognised when the Group has a present obligation (legal or constructive) as a result of a past
event, it is probable that the Group will be required to settle the obligation, and a reliable estimate can be made
of the amount of the obligation. The amount recognised as a provision is the best estimate, at the end of the
reporting period, of the consideration required to settle the present obligation, taking into account the risks and
uncertainties surrounding the obligation.
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Alliance Medical Group Limited
Annual Report & Financial Statements 2020 Page 30
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 30 September 2020
2. ACCOUNTING POLICIES (continued)
Revenue recognition
Revenue is measured at the fair value of the consideration received or receivable during the period, and
represents amounts receivable for goods and services provided in the normal course of business, net of
discounts, VAT and other sales related taxes.
The Group recognises revenue when the amount of revenue can be reliably measured, and performance
obligations within the contract with the customer have been met. Due to the nature of the business and contracts
with customers in almost all cases it is clear and undeniable when the performance obligations have been met,
for example, it is when a patient has physically been scanned. Once a patient is scanned, depending on the
type of patient an invoice will be generated immediately, or picked up as part of a monthly invoice. Once the
invoice is raised, the debt becomes payable. Returns and refunds are not material to the business due to the
service provided, once a scan is complete the service has been fulfilled and there are very few cases of disputes
by customers.
The principal activities of the Group are the provision of diagnostic imaging services, molecular imaging services
and patient services and the development, manufacture and distribution of radiopharmaceuticals. Revenue is
recognised principally on a ‘per scan’ basis or a ‘day rate’ basis for imaging services, depending upon the terms
of the contract, once the scanning service is complete. For the radiopharmaceutical businesses revenue is
recognised principally on a ‘per dose’ of ‘per delivery’ basis for manufacturing activities and on reaching
contractual milestones or as a royalty percentage of sales of products for development activities. The Group
does not participate in activities which need to be accounted for under long-term contract accounting rules.
Leases
Where a lease arrangement is identified, a liability to the lessor is included in the Balance Sheet as a lease
obligation calculated at the present value of minimum lease payments. A corresponding right-of-use asset is
recorded in property, plant and equipment. Lease payments are apportioned between finance costs and
reduction of the lease liability so as to reflect the interest on the remaining balance of the liability.
Finance charges are recorded in the Income Statement within finance costs. Right-of-use assets are
depreciated over the shorter of the estimated useful life of the asset and the lease term.
Leases with a term of 12 months or less and leases for low value are not recorded on the Balance Sheet and
lease payments are recognised as an expense in the Income Statement on a straight-line basis over the
lease term.
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Alliance Medical Group Limited
Annual Report & Financial Statements 2020 Page 31
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 30 September 2020
2. ACCOUNTING POLICIES (continued)
Foreign currencies
The Group’s activities expose it to the financial risks of changes in foreign currency exchange rates. The Group
uses net investment in overseas subsidiaries to manage these exposures. The individual financial statements
for each Group company are recorded in the currency of the primary economic environment in which they
operate (the 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 Company and the presentational currency for the consolidated financial statements.
In preparing the financial statements of the individual companies, transactions in currencies other than the
company’s functional currency are recorded at rates prevailing at the dates of the transactions. At each balance
sheet date, monetary assets and liabilities that are denominated in currencies other than the functional currency
are retranslated at the rates prevailing on the balance sheet date. Non-monetary items that are measured in
terms of historical cost in a non-functional currency are not retranslated. Exchange differences arising on the
settlement of monetary items, and on the retranslation of monetary items, are included in the income statement
for the period.
For the purposes of presenting consolidated financial statements, the assets and liabilities of the Group’s foreign
operations are translated at exchange rates prevailing on the balance sheet date. Income and expense items
are translated at the average exchange rates for the period. Exchange differences arising, if any, are classified
as equity and transferred to the Group’s translation reserve. On disposal of an operation, any translation
differences to the point of disposal are recognised as income or expense.
The exchange rate for the principal foreign currencies in use by the Group were as follows:
Year ended
30 September 2020
Year ended
30 September 2019
Year end rate
Average rate in
the year
Year end rate
Average rate in
the year
Euro
1.098
1.138
1.126
1.130
Polish Zloty
4.972
5.004
4.927
4.862
US Dollar
1.287
1.283
1.230
1.271
Swiss Franc
1.186
1.225
1.223
1.266
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Alliance Medical Group Limited
Annual Report & Financial Statements 2020 Page 32
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 30 September 2020
2. ACCOUNTING POLICIES (continued)
Retirement benefit costs
Group companies operate various pension schemes. The schemes are generally funded through payments to
insurance companies or trustee-administered funds. The Group has a number of defined contribution plans
and participates in the Italian Trattamento di Fine Rapporto (“TFR”) scheme which has the characteristics of
both defined benefit and defined contribution schemes. A defined contribution plan is a pension plan under
which the Group pays fixed contributions into a separate entity. The Group has no legal or constructive
obligations to pay further contributions if the fund does not hold sufficient assets to pay all employees the
benefits relating to employee service in current and prior years. A defined benefit plan is a pension plan that is
not a defined contribution plan.
The Group participates in a number of defined contribution pension schemes in the countries in which it
operates, the assets of which are held separately from those of the Group and are invested with insurance
companies and external fund managers. The Group has no further obligations once the contributions have
been paid. The contributions are recognised as employee benefit expense when they are due. Prepaid
contributions are recognised as an asset to the extent that a cash refund or a reduction in the future payments
is available.
Under the rules of the Trattamento di Fine Rapporto (“TFR”) scheme, Italian employees are entitled to a
payment when they cease to be employed by the company. It is an unfunded liability held on the balance sheet
and is not a pension scheme. In 2007, the TFR system was reformed, and under the new law, employees are
given the ability to choose where the TFR compensation is invested. If the employee does not specify, the
compensation is directed to the National Social Security Institute or pension funds. Under IFRS the TFR had
the characteristics of a defined benefit scheme for payments made up to the reform in 2007 and accordingly
these payments are accounted as such. Contributions under the reformed TFR system are accounted for as a
defined contribution plan.
Taxation
The tax expense represents the sum of the tax currently payable and the deferred tax charge.
The tax currently payable is based on taxable profit for the period on a business by business basis. Taxable
profit differs from profit before tax as reported in the income statement because it excludes items of income or
expense that are taxable or deductible in other years and it further excludes items that are never taxable or
deductible. The Group’s liability for current tax is calculated using tax rates that have enacted or substantively
enacted at the balance sheet date in the countries where taxable profit is generated.
Deferred tax is the tax expected to be payable or recoverable on differences between the carrying amounts of
the assets and liabilities in the financial statements and the corresponding tax bases used in the computation
of taxable profit, and is accounted for using the liability method on an undiscounted basis. Deferred tax liabilities
are recognised for all temporary differences and deferred tax assets are recognised to the extent that it is
probable that taxable profits will be available against which deductible temporary differences can be utilised.
Deferred tax is calculated at the tax rates that have been enacted or substantively enacted by the balance sheet
date. Deferred tax is included in the income statement, except when it relates to items charged or credited
directly to equity, in which case the deferred tax is also recognised directly in equity.
Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets
against current tax liabilities and when they relate to income taxes levied by the same tax authority and the
Group intends to settle its current tax assets and liabilities on a net basis.
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Alliance Medical Group Limited
Annual Report & Financial Statements 2020 Page 33
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 30 September 2020
2. ACCOUNTING POLICIES (continued)
IFRS non-GAAP measure
The Directors consider EBITA and EBITDA to be key performance indicators (“KPI”) of the business as defined
in the Strategic Report.
EBITA approximates to the underlying earnings from operations, being profit from operations before
amortisation of acquired intangibles, profit/(loss) on disposal of property, plant and equipment, and exceptional
items.
Depreciation and amortisation are the main non-cash expenses of the business, so EBITDA approximates to
cash flow from operations, before adjustment for movements in working capital and capital expenditure.
Exceptional items
Where certain expense or revenue items recorded in a year are significant by their size or incidence, these are
disclosed as exceptional within a separate line of the income statement. Examples of items classified as
“exceptional” include:
Refinancing costs;
Reorganisation and restructuring costs; and
Other items not in the normal course of day-to-day business.
Decommissioning costs
The Group records a provision for the decommissioning costs of cyclotrons used in the production of
radiopharmacy products. Decommissioning costs are provided at the present value of expected costs to settle
the obligation using estimated cash flows and are recognised as a provision. The cash flows are discounted at
a current pre-tax rate. The unwinding of the discount is expensed as incurred and recognised in the consolidated
income statement. The estimated future costs of decommissioning will be reviewed annually and adjusted as
appropriate. Changes in the estimated future costs or in the discount rate applied will be added to or deducted
from the provision.
Segment reporting
Details of revenue generated by destination is included in note 4 where the destination country contributes more
than £0.5m to the Group’s revenue.
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Alliance Medical Group Limited
Annual Report & Financial Statements 2020 Page 34
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 30 September 2020
3. CRITICAL ACCOUNTING JUDGEMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY
The preparation of the consolidated financial statements requires the use of critical accounting estimates and
requires management to exercise judgements in the process of applying the Group’s accounting policies.
Estimates and judgements are continually evaluated and are based on historical experience and other factors,
including expectations of future events that are believed to be reasonable under the circumstances.
The Group makes estimates and assumptions regarding the future. The resulting accounting estimates will, by
definition, seldom equal the related actual results. A description of the accounting estimates and judgements
that were critical to preparing specific financial statement items, as well as the processes employed to do so,
are set out below and further information about these areas of judgement is contained within the accounting
policies note (note 2).
Key source of estimation uncertainty
The key assumptions concerning the future, and other key sources of estimation uncertainty at the balance
sheet date, that have a significant risk of causing a material adjustment to the carrying amounts of assets and
liabilities within the next financial year, are discussed below.
Contingent consideration
The Alliance Medical Group acquired Life Molecular Imaging group (formerly known as Piramal Imaging) in
2018, consisting of 4 legal entities. As part of this acquisition, a large proportion of the consideration was
contingent with a relatively small amount paid at the time of acquisition.
The contingent consideration will become payable when the acquired business is generating a positive cash
contribution, measured on a cumulative basis from the date of acquisition. The contingent consideration is a
50% share of pre-tax cash generated for a period of 10 years post acquisition or a maximum payable of
US$200m. The amount included is the anticipated payment, based on long term forecasts, discounted to
present value.
There are a number of factors which will impact the value of the contingent consideration and the directors have
had to use their knowledge of the business along with certain judgements and estimates in order to value this
consideration.
Forecasts have been completed to identify when the business is likely to become profitable, as well as the level
of the profits, the profitability of this business also depends on the products created being given market
authorisation and passing medical trials.
Critical judgements in applying the Company’s accounting policies
The following are the critical judgements, apart from those involving estimations (which are dealt with separately
above), that the directors have made in the process of applying the Company’s accounting policies and that
have the most significant effect on the amounts recognised in the financial statements.
Impairment of goodwill and other intangible assets
Judgement is required to consider whether any impairments of goodwill or other intangible assets exist, and
whether the useful economic lives of existing intangible assets and those acquired in the year remain
appropriate. This judgement is exercised by considering any factors which have arisen during the year, or are
likely to arise in the future, which may affect the valuations, including technological changes, changes in the
customer base and market conditions.
The key assets included within intangibles are associated with Life Molecular Imaging Group. These are assets
which are being researched and developed by the business in the hope that they will go through medical trials
and used in the mainstream healthcare industry. These assets have a value in intangibles of £25.0m as at 30
September 2020 (£23.5m at 30 September 2019).
In order to support these asset values forecasts are prepared for each product being developed. These
forecasts show the level of development costs expected, along with the period in which it is hoped medical trials
will be started, as well as finished and then the likelihood the products will be able to be sold to the market. The
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Alliance Medical Group Limited
Annual Report & Financial Statements 2020 Page 35
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 30 September 2020
3. CRITICAL ACCOUNTING JUDGEMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY
(continued)
Going concern
The Group performs regular assessments on the going concern status of the Group. These assessments take
into consideration:
current solvency of the Group;
current liquidity position;
available committed and uncommitted bank facilities;
cash commitments for the next 12 months;
bank covenants; and
debt maturities.
As part of the assessments the board of directors has reviewed the Group budgets, forecasts, available cash
resources and unutilised facilities as well as the debt maturity profile. The forecasts for the Group have been
prepared, covering its future performance, capital and liquidity for a period of 12 months from the date of
approval of these consolidated financial statements including performing sensitivity analyses. The expected
future cash flows were adjusted to reflect the best estimate of the short and longer-term impact of the COVID-
19 pandemic (the pandemic).
To ensure the Group has sufficient cash reserves, in addition to securing bank facilities at Life UK Holdco level,
postponing central bonus payments and deferring capex projects, management has implemented a number of
mitigating actions which include cost and cash preservation levers across the Group’s operations.
The external debt used to provide funding for the group sits outside of this consolidation at Alliance Medical
Group level (the external debt is recorded in Life UK Holdco Limited) and include covenants that must be met
at various measurement points as defined in the contract for these facilities. These covenants are measured
based on the results of the wider group- this being the group headed by Life Healthcare Group Holdings Limited.
Life Healthcare Group Holdings Limited is the ultimate parent undertaking and controlling party of Alliance
Medical Group limited. The wider group successfully refinanced this external debt during March 2020 and
extended the Debt’s maturities. This wider Group is in a strong financial position with net debt to normalised
EBITDA as at 30 September 2020 at 2.96 times (2019: 1.96 times). Given the significant uncertainty caused by
the pandemic, the wider Group pre-emptively negotiated amended bank covenants for the period up to 31
March 2021 and continue to monitor prospective compliance with such covenants. In addition, banking facilities
have been increased and the wider Group’s committed undrawn bank facilities as at 30 September 2020 are
R6.3 billion.
The Group’s assessments and sensitivity analysis show that the Group has sufficient accessible capital and
liquidity to continue to meet its obligations as they fall due and as a result it is appropriate to prepare these
consolidated financial statements on a going concern basis.
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Alliance Medical Group Limited
Annual Report & Financial Statements 2020 Page 36
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 30 September 2020
4. SEGMENTAL INFORMATION
Revenue by destination is analysed as:
Year to
30 Sep 2020
Year to
30 Sep 2019
£m
£m
United Kingdom
160.6
162.2
Italy
88.4
97.7
Spain
7.0
7.3
Germany
6.2
0.5
Netherlands
1.8
1.7
Republic of Ireland
27.8
25.0
Austria
5.3
0.2
Finland
-
0.7
Lithuania
-
0.7
Norway
2.0
1.7
Poland
1.3
1.8
Switzerland
4.1
7.6
USA
11.7
9.3
Belgium
1.3
1.4
Latvia
0.9
-
Other countries
1.5
1.2
319.9
319.0
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Alliance Medical Group Limited
Annual Report & Financial Statements 2020 Page 37
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 30 September 2020
5. BUSINESS COMBINATIONS
Acquisitions in Italy
On 31 December 2019, Alliance Medical Srl acquired 100% control of Priamar Srl, a company who carries out
medical diagnostic imaging services. This acquisition was carried out to further enhance the Groups position
within the Italian market. This transaction has been treated as an acquisition under IFRS 3 “Business
Combinations”. The fair values of the identifiable assets and liabilities at the date of acquisition were:
Priamar Srl
£m
Intangible assets
-
Non current assets
0.2
Current assets
0.3
Current liabilities
(0.6)
Non current liabilities
-
Total identifiable net liabilities at fair value
(0.1)
Goodwill arising on acquisition
0.7
Cash consideration transferred
0.6
The fair values of the identifiable assets and liabilities were determined using a variety of valuation techniques
including the market approach and replacement cost approach. The goodwill arising from this acquisition is
attributable to economies of scale expected from combining the operations of the group.
The acquisition contributed revenue of £0.8m and net loss of £0.1m from acquisition to 30 September 2020.
For the 12 month period to 30 September 2020, the business generated revenue of £1.2m and a net loss of
£0.1m.
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Alliance Medical Group Limited
Annual Report & Financial Statements 2020 Page 38
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 30 September 2020
6. EXCEPTIONAL ITEMS
Year to
30 Sep 2020
Year to
30 Sep 2019
£m
£m
Administrative expenses
Legal and settlement costs and other sundry items
-
0.5
Merger and acquisition costs
0.7
1.3
0.7
1.8
There were no Legal and settlement costs and other sundry items for the year to 30 September 2020, the costs
in the year to 30 September 2019 were in relation to onerous contracts.
Merger and acquisition costs of £0.7m (2019: £1.3m) were incurred during the year to 30 September 2020.
These costs relate to professional fees incurred as part of reviewing the Group strategy, which includes
assessing potential acquisitions. Of the £0.7m incurred in the year to 30 September 2020, £0.2m relates to
acquisitions which were completed during the year and £0.5m relates to potential acquisitions in the future.
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Alliance Medical Group Limited
Annual Report & Financial Statements 2020 Page 39
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 30 September 2020
7. PROFIT BEFORE INTEREST & TAXATION
This is stated after charging:
Year to
30 Sep 2020
Year to
31 Sep 2019
£m
£m
Auditors’ remuneration:
Fees payable for the audit of the parent Company and
consolidated financial statements
0.4
0.2
Fees payable for the audit of subsidiaries
0.5
0.5
Taxation for compliance services
-
0.1
Other taxation Advisory services
0.2
-
Depreciation:
Owned assets
23.9
22.4
Assets held under finance leases
6.8
6.4
Right of use assets under IFRS 16
5.5
-
Amortisation of intangible assets
5.0
5.0
Operating lease rentals:
Land and buildings
0.1
6.8
Other
0.1
0.6
(Profit)/Loss on disposal of property, plant and
equipment
0.2
(0.1)
Amortised cost adjustments:
Contingent consideration discounting
3.2
2.4
Amortisation of intangible assets is included in administrative expenses in the income statement.
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Alliance Medical Group Limited
Annual Report & Financial Statements 2020 Page 40
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 30 September 2020
8. EMPLOYEES AND DIRECTORS
a) Directors’ emoluments
Year to
30 Sep 2020
Year to
30 Sep 2019
£m
£m
Emoluments
0.8
1.0
Amount receivable under long term incentive
schemes
0.5
0.3
1.3
1.3
Emoluments include £nil (2019: £nil) in respect of payments made for executive directors becoming non-
executive.
Amount receivable under long term incentive schemes are in respect of qualifying services and relate to two
(2019: two) of the directors.
Contributions made on behalf of one (2019: one) of the directors to money purchase pension schemes totalled
£11k in the year (2019: £6k), of this amount £1k was outstanding at year end (2019: £nil).
The amounts in respect of the highest paid Director are as follows:
Year to
30 Sep 2020
Year to
30 Sep 2019
£m
£m
Emoluments
0.4
0.2
Amount receivable under long term incentive
schemes
0.4
0.2
0.8
0.4
Emoluments include £nil (2019: £nil) in respect of payments made for executive directors becoming non-
executive.
Contributions made on behalf of the directors to money purchase pension schemes totalled £11k in the year
(2019: £6k), of this amount £1k was outstanding at year end (2019: £nil).
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Alliance Medical Group Limited
Annual Report & Financial Statements 2020 Page 41
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 30 September 2020
8. EMPLOYEES AND DIRECTORS
b) Staff costs
Year to
30 Sep 2020
Year to
30 Sep 2019
£m
£m
Wages and salaries
73.7
70.6
Social security costs
11.6
11.1
Amount receivable under long term incentive
schemes
2.3
1.4
Other pension costs (see note 23)
3.0
3.0
Other benefits
1.4
0.9
92.0
87.0
The average monthly number of employees, including Directors and part time employees was:
Year to
30 Sep 2020
Year to
30 Sep 2019
Number
Number
Sales
34
40
Administrative
596
575
Technical/operations
1,495
1,411
2,125
2,026
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Alliance Medical Group Limited
Annual Report & Financial Statements 2020 Page 42
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 30 September 2020
9. FINANCE COSTS
Year to
30 Sep 2020
Year to
30 Sep 2019
£m
£m
Bank loans
0.2
0.2
Other interest
1.7
2.9
Interest on loans from parent company
8.5
8.7
Exchange rate difference on intercompany financing
(3.7)
(0.5)
Finance charges in respect of finance leases
1.6
1.9
Finance charges in respect of IFRS 16 leases
1.3
-
Interest cost of defined benefit schemes
0.1
0.1
Discounting of contingent consideration
3.2
2.4
12.9
15.7
Amortisation of loan issue costs (note 19)
2.0
1.1
14.9
16.8
The intercompany loans are between subsidiaries which have different functional currencies. The exchange
rate differences relate to the retranslation of intercompany balances in the underlying subsidiary’s books.
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Alliance Medical Group Limited
Annual Report & Financial Statements 2020 Page 43
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 30 September 2020
10. TAXATION
a) Tax charge
The tax charge in the income statement represents:
Year to
30 Sep 2020
Year to
30 Sep 2019
£m
£m
Current tax:
UK tax
-
-
Overseas tax
1.9
5.3
Total current tax
1.9
5.3
Deferred tax:
Origination and reversal of temporary differences
0.4
3.2
Adjustments in respect of prior years
0.3
-
Deferred tax asset recognised
-
(2.1)
Total deferred tax
0.7
1.1
Total tax charge/(credit) in the income statement
2.6
6.4
During the prior period, it was deemed appropriate to recognise capital allowances that are expected to be
recovered in the foreseeable future, on the basis that some had been utilised, this resulted in a credit to
deferred tax of £2.1m. Some of these assets have been utilised in the current year.
b) Reconciliation of the total tax charge
The tax charge in the income statement in the year differs from the charge which would result from the standard
rate of corporation tax in the UK of 19% (2019: 19%). The differences are reconciled below:
Year to
30 Sep 2020
Year to
30 Sep 2019
£m
£m
Profit/(loss) before tax
5.5
13.1
Profit before tax at the standard rate of corporation
tax of 19% (2019: 19%)
1.0
2.5
Expenses not deductible for tax purposes
2.5
2.7
Depreciation for the period less than capital
allowances
0.5
2.0
Other timing differences
(0.5)
0.1
Tax losses not recognised in deferred tax
(0.5)
-
Prior year adjustment
(1.0)
0.6
Effect of overseas tax rate
0.7
2.4
Income not taxable
(0.4)
(1.5)
Group relief received
(0.7)
(0.1)
Loss of disposal of fixed assets
-
-
Other movements
(0.1)
(0.2)
Deferred tax recognised/(unrecognised)
1.1
(2.1)
Tax charge/(credit) in the income statement
2.6
6.4
The Company is registered in England and Wales and domiciled in the United Kingdom for tax purposes.
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Alliance Medical Group Limited
Annual Report & Financial Statements 2020 Page 44
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 30 September 2020
10. TAXATION (continued)
c) Factors affecting current and future tax charges
In the Spring Budget 2020, the Government announced that from 1 April 2020 the corporation tax rate would
remain at 19% (rather than reducing to 17%, as previously enacted). This new law was substantively enacted
on 17 March 2020. As the proposal to keep the rate at 19% was substantively enacted prior to the balance
sheet date, its effects are included in these financial statements.
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Alliance Medical Group Limited
Annual Report & Financial Statements 2020 Page 45
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 30 September 2020
11. PROPERTY, PLANT AND EQUIPMENT
Freehold land
and buildings
and leasehold
improvements
£m
Scanning units
and equipment
£m
Other
plant and
equipment
£m
Motor vehicles
£m
Assets under
construction
£m
Total
£m
Cost
At 30 September 2018
83.4
161.7
16.1
7.8
16.1
285.1
Additions
3.2
14.1
1.6
0.5
32.9
52.3
Additions as part of a
business acquisition
-
2.2
-
-
-
2.2
Reclassification
7.3
17.8
0.8
-
(25.9)
-
Disposals
(1.0)
(2.0)
(0.9)
(2.5)
-
(6.4)
Exchange differences
(0.1)
(0.3)
0.1
-
-
(0.3)
At 30 September 2019
92.8
193.5
17.7
5.8
23.1
332.9
Additions
2.0
11.1
1.4
1.7
20.6
36.8
Reclassification
5.2
15.1
2.8
-
(23.1)
-
Recognition of right of use
assets
40.0
-
0.5
0.2
40.7
Disposals
(1.0)
(5.8)
(0.4)
(1.3)
-
(8.5)
Exchange differences
1.0
1.9
-
-
0.1
3.0
At 30 September 2020
140.0
215.8
22.0
6.4
20.7
404.9
Accumulated
depreciation
At 30 September 2018
22.5
72.3
9.0
4.8
-
108.6
Provided during the year
6.6
18.9
3.2
0.1
-
28.8
Disposals
(1.0)
(1.7)
(0.9)
(1.8)
-
(5.4)
Exchange differences
0.1
0.1
(0.4)
-
-
(0.2)
At 30 September 2019
28.2
89.6
10.9
3.1
-
131.8
Provided during the period
11.9
20.6
2.9
0.8
-
36.2
Disposals
(0.8)
(5.6)
(0.2)
(0.8)
-
(7.4)
Exchange differences
0.5
1.4
(0.1)
-
-
1.8
At 30 September 2020
39.8
106.0
13.5
3.1
-
162.4
Net book value
At 30 September 2020
100.2
109.8
8.5
3.3
20.7
242.5
At 30 September 2019
64.6
103.9
6.8
2.7
23.1
201.1
Assets held under
finance leases
Net book value at 30
September 2020
5.8
41.4
-
3.1
-
50.3
Net book value at 30
September 2019
6.5
45.4
-
0.3
-
52.2
The above categories include the following net book values at 30 September 2020 in relation to right of use
assets:
Freehold land and buildings and leasehold improvements £40.6m
Scanning units and equipment £41.4m
Other plant and equipment £0.3m
Motor vehicles £3.1m
Assets under construction £nil
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Alliance Medical Group Limited
Annual Report & Financial Statements 2020 Page 46
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 30 September 2020
12. GOODWILL AND OTHER INTANGIBLE ASSETS
Goodwill
£m
Customer
base
£m
Brands
£m
Purchased
technology
licences
£m
Product
development
costs
£m
Other
intangible
assets total
£m
Total
£m
Cost
At 30 September 2018
90.5
38.8
10.5
8.8
19.6
77.7
168.2
Additions
-
-
-
1.1
4.9
6.0
6.0
Additions as part of a
business acquisition
7.3
3.9
0.9
-
-
4.8
12.1
Exchange differences
(0.1)
(0.1)
-
(0.1)
0.3
0.1
-
At 30 September 2019
97.7
42.6
11.4
9.8
24.8
88.6
186.3
Additions
-
-
-
1.4
1.6
3.0
3.0
Additions as part of a
business acquisition
0.7
-
-
-
-
-
0.7
Exchange differences
1.5
0.5
-
0.1
0.8
1.4
2.9
At 30 September 2020
99.9
43.1
11.4
11.3
27.2
93.0
192.9
Accumulated
amortisation
At 30 September 2018
-
29.2
10.5
4.9
0.1
44.7
44.7
Amortisation provided
during the year
-
2.6
-
1.4
1.0
5.0
5.0
Exchange differences
-
-
-
-
0.2
0.2
0.2
At 30 September 2019
-
31.8
10.5
6.3
1.3
49.9
49.9
Amortisation provided
during the period
-
2.2
0.1
1.7
0.9
4.9
4.9
Exchange differences
-
0.4
-
0.1
-
0.5
0.5
At 30 September 2020
-
34.4
10.6
8.1
2.2
55.3
55.3
Net book value
At 30 September 2020
99.9
8.7
0.8
3.2
25.0
37.7
137.6
At 30 September 2019
97.7
10.8
0.9
3.5
23.5
38.7
136.4
There are no intangible assets, other than goodwill, with indefinite useful lives. Amortisation of product
development costs commences once revenue starts to be generated and is spread over the relevant patent
period.
Goodwill and other intangible assets acquired as part of a business combination are allocated, at acquisition,
to the cash generating units (“CGU”) that are expected to benefit from that business combination.
Customer base includes two material individual assets following acquisitions in the UK and Italy businesses,
these are being amortised in line with the accounting policy in note 3 of these financial statements. The
remaining useful life of the assets within this category range from 3 years to 9 years.
Brands includes an asset following an acquisition in the UK. The Group have not changed the branding of the
acquired business and are continuing to use the company’s original name, this asset is the value of the brand
of the acquired business, this is being amortised in line with the accounting policy in note 3 of these financial
statements. The remaining useful life of the assets within this category is 9 years.
Development costs include the costs associated with the development of the Neuraceq product within the Life
Molecular imaging business, this is being amortised in line with the accounting policy in note 3 of these financial
statements. The remaining useful life of the assets within this category is 9 years.
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Alliance Medical Group Limited
Annual Report & Financial Statements 2020 Page 47
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 30 September 2020
12. GOODWILL AND OTHER INTANGIBLE ASSETS (continued)
The CGU used to determine the recoverable amount are the geographical regions in which the businesses are
located and managed, or the business itself where there is an intention to maintain separation from existing
businesses.
At 30 Sep 2020
At 30 Sep 2019
£m
£m
Cash generating units:
UK
37.6
37.6
Italy
44.3
42.5
Northern Europe
6.3
6.2
Piramal Imaging acquisition
8.6
8.4
Ireland
2.6
2.5
Spain
0.5
0.5
Total goodwill
99.9
97.7
Annual test for impairment of goodwill
The Group tests for impairment annually, or more frequently if there is an indication of potential impairment, in
accordance with the accounting policy stated in note 2. Goodwill and other intangible assets have been tested
for impairment by comparing their carrying value with the higher of fair value less costs to sell and value in use.
The recoverable amount of the CGU is determined based on a value in use calculation which uses cash flow
projections over an initial five year period based on budgets and assumed short-term growth rates which take
into account region, market and modality.
The assumed long-term growth rate used to determine the cash flows beyond the initial five year period is 2.0%
(2019: 1.5%) on a weighted average basis. This is with the exception of Life Molecular Imaging which has been
treated separately. The growth for this CGU has been taken from the long term forecast of the business that
was used on acquisition in order to calculate the intangibles, due to the nature of the business growth outside
the initial 5 years is expected to be significantly higher than 1.5% when it is hoped certain products being
developed will be ready for the market.
The value assigned to the Spain cash generating unit above is deemed insignificant when compared with the
Groups total carrying value of goodwill.
The pre-tax and post-tax discounts rates used for each CGU are listed below.
CGU
Pre-tax discount
rate 2020
Post-tax discount
rate 2020
Pre-tax discount
rate 2019
Post-tax discount
rate 2019
United Kingdom
7.58%
6.14%
7.64%
6.19%
Italy
9.97%
7.18%
8.24%
5.77%
Northern Europe
7.00%
5.60%
5.90%
4.64%
Life Molecular Imaging *
14.37%
11.00%
15.00%
11.48%
Ireland
7.09%
6.20%
6.99%
6.12%
Spain
9.53%
7.15%
7.84%
5.88%
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Alliance Medical Group Limited
Annual Report & Financial Statements 2020 Page 48
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 30 September 2020
12. GOODWILL AND OTHER INTANGIBLE ASSETS (continued)
The key assumptions used in the cash flow projections are as follows:
Replacement capital expenditure trends towards depreciation over the forecast period;
Terminal values have been calculated using long-term growth rates;
Future performance of acquired businesses is in line with the business cases for investment.
At 30 September 2020, it was concluded that no impairment of goodwill and other intangible assets was required
(2019: £nil).
Any reasonably possible change in the key assumptions noted above would not result in further impairment to
the carrying amount of the goodwill and other intangible assets.
A number of sensitivity analyses has been carried out to assess the impact on the impairment calculations,
including, if there was a 0.5% decrease in the terminal growth rate for the Group, and increase in capex spend
of £5m and an increase in the WACC rate to the highest range (from the medium). These workings have
confirmed that there would still be no requirement for a goodwill impairment.
Due to the size and nature of the Life Molecular Imaging intangible, a separate sensitivity analysis was done
on this intangible asset also. An increase in the WACC rate by 1% and a reduction in the PET adoption rate of
Neuraceq by 10% was calculated and even with these sensitivities, there were still headroom and no impairment
of the asset value was necessary.
13. JOINT VENTURES
As at 30 September 2020 and 30 September 2019 the Group had interests in the following joint ventures:
Name
Form of
business
structure
Place of
incorporation
and operation
Share
class held
Proportion of
nominal value
of issued
capital held
Principal activity
Barringtons MRI
Limited
Incorporated
Ireland
Ordinary
50%
Diagnostic centre
20/20 Imaging
Limited
Incorporated
Ireland
Ordinary
33%
Diagnostic centre
The proportion of voting power held is the same as the proportion of issued capital held by the Group.
The registered offices of the joint ventures are as follows:
Barringtons MRI Limited - Bon Secours Hospital at Barringtons, Georges Quay, Limerick, V94 HE2T
20/20 Imaging Limited - 82 North Main Street, Bandon, Co. Cork, P72 T971
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Annual Report & Financial Statements 2020 Page 49
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 30 September 2020
13. JOINT VENTURES (continued)
The summarised financial information in respect of the Group’s interests in the joint ventures, which is based
on IFRS and accounted for using equity method, is set out below:
Year to
30 Sep 2020
Year to
30 Sep 2019
£m
£m
Revenue
4.8
6.1
Cost of sales
(1.9)
(2.2)
Administrative expenses
(3.0)
(2.7)
Profit for the period
(0.1)
1.2
Group’s share of profit for the period
0.5
0.6
At 30 Sep 2020
At 30 Sep 19
£m
£m
Non-current assets
0.8
1.0
Cash
3.3
2.7
Current assets
0.7
1.1
Current liabilities
(0.7)
(0.8)
Equity
4.1
4.0
Carrying amount of the investments
3.1
2.8
14. OTHER INVESTMENTS
At 30 Sep 2020
At 30 Sep 2019
£m
£m
Other investments
0.9
0.6
Alliance Medical Limited invested £0.8m (£0.3m of which was in this financial year) in preference shares in
ARTMS Products Inc, a Canadian based organisation. Alliance Medical Italia srl acquired Villa Serena for £0.1m
as part of the acquisition of the Albaro Group of companies.
15. INVENTORY
At 30 Sep 2020
At 30 Sep 2019
£m
£m
Current assets:
Raw materials and consumables
2.9
1.9
Inventory expensed to the profit and loss account in the year to 30 September 2020 was £10,410,000 (2019:
£8,727,000).
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Annual Report & Financial Statements 2020 Page 50
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 30 September 2020
16. TRADE AND OTHER RECEIVABLES
At 30 Sep 2020
At 30 Sep 2019
£m
£m
Current assets:
Trade receivables
49.0
54.1
Allowance for doubtful debts
(10.0)
(9.1)
39.0
45.0
Other receivables
18.5
19.0
Prepayments and accrued income
3.9
3.4
61.4
67.4
Trade receivables are non-interest bearing and generally have a 30 to 90 day term.
Due to their short maturities, the fair value of trade and other receivables approximates to their book value.
There is no significant concentration of credit risk with respect to trade receivables, as the Group has a large
number of customers that are internationally dispersed. Policies are also in place to ensure the provision of
goods and services are only made to customers with an appropriate credit history and credit limits are
periodically reviewed. Amounts recoverable from customers are reviewed on an ongoing basis and appropriate
provision is made for bad and doubtful debts. Provision requirements are determined by reference to ageing
of invoices, credit history and other available information. Provision has been made for bad and doubtful debts
due to potential pricing adjustments with no significant defaults from customers in the year due to strong long
term relationships with customers. Due to the nature of our business our key customers are, or are funded by,
Government funded public bodies such as NHS trusts in the UK or ASL bodies in Italy, and therefore the nature
of these organisations further reduces our susceptibility to credit risk. In certain territories, use is made of
invoice factoring facilities which are on a non-recourse basis, further reducing the credit risk from individual
customers. As such any further detailed analysis of the credit risk of our financial assets category is not
considered meaningful.
The Group has a broad base of customers with no concentration of credit quality within trade receivables at 30
September 2020 or 30 September 2019. The maximum exposure to credit risk is the carrying amount.
Year to
30 Sep 2020
Year to
30 Sep 2019
£m
£m
Movement in allowance for doubtful debts:
Brought forward
9.1
8.8
Doubtful debts (credit)/charge recognised in the period
1.4
0.9
Movements in respect of business acquisitions
-
-
Utilised during the year
(0.6)
(0.6)
Exchange differences
0.1
-
At end of period
10.0
9.1
At 30 September 2020, trade receivables of £28.8m were past due but not impaired (2019: £28.5m). The ageing
analysis of these trade receivables is as follows:
At 30 Sep 2020
At 30 Sep 2019
£m
£m
Up to three months past due
22.7
17.5
Three to six months past due
2.5
4.7
Over six months past due
3.6
6.3
28.8
28.5
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Alliance Medical Group Limited
Annual Report & Financial Statements 2020 Page 51
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 30 September 2020
16. TRADE AND OTHER RECEIVABLES (continued)
Following the adoption of IFRS 9 additional work was carried out on the trade receivables to calculate the
Expected Credit Loss (ECL) of each customer category. The below balances are as at 30 September 2020.
Customer category
Current
30-60
days
61-90
days
91-180
days
180-360
days
>1 year
Total
Spanish Government
Gross trade receivables
1,261
566
484
388
383
-
3,082
ECL (%)
10.6%
0%
0%
0%
0%
0%
0%
Loss allowance
134
-
-
-
-
-
134
Irish public health
Gross trade receivables
895
358
79
103
39
107
1,581
ECL (%)
7.7%
0%
0%
0%
0%
0%
4.36%
Loss allowance
69
-
-
-
-
-
69
UK NHS
Gross trade receivables
3,757
4,403
934
541
175
536
10,346
ECL (%)
11.4%
0%
0%
0%
0.6%
88.3%
8.7%
Loss allowance
429
-
-
-
1
473
903
Italian public health
Gross trade receivables
4,346
372
23
(138)
25
3,132
7,760
ECL (%)
5.8%
0%
0%
13.0%
60.0%
90.3%
40.1%
Loss allowance
252
-
-
18
15
2,829
3,114
Private organisations
Gross trade receivables
11,519
2,742
817
1,305
1,014
6,895
24,292
ECL (%)
7.6%
0.6%
1.1%
9.0%
14.8%
57.8%
21.2%
Loss allowance
877
16
9
117
150
3,983
5,152
Private individuals
Gross trade receivables
212
58
814
19
72
779
1,954
ECL (%)
25.4%
1.7%
4.4%
21.0%
23.6%
78.8%
37.1%
Loss allowance
54
1
36
4
17
614
726
Total
Gross trade receivables
21,990
8,499
3,151
2,218
1,708
11,449
49,015
ECL (%)
8.3%
0.2%
1.4%
6.3%
10.7%
69.0%
20.6%
Loss allowance
1,815
17
45
139
183
7,899
10,098
Reference has been made to past default experiences using historical information at least two years old and
management’s assessment of credit worthiness over these receivables to calculate the above ECLs.
Following a review this year there has not been deemed to be a material movement from the calculations
made last year.
There has been no material change to the loss allowance calculations from the previous period, the change
that has occurred is based on changes in the gross amount of trade receivables from the prior period as well
as the historical data being used to calculate the expected credit loss being update by 12 months to provide a
more up to date calculation.
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Alliance Medical Group Limited
Annual Report & Financial Statements 2020 Page 52
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 30 September 2020
17. CASH AND CASH EQUIVALENTS
At 30 Sep 2020
At 30 Sep 2019
£m
£m
Current assets:
Cash at bank and in hand
63.9
37.6
The fair value of cash and cash equivalents approximates to their book values. Cash at bank earns interest at
floating rates based on daily bank deposit rates.
Included in the above cash is restricted cash of £1.2m (30 September 2019: £1.2m) in relation to a contract in
Italy.
Credit risk arises from cash and cash equivalents and deposits with banks and financial institutions. The Group
controls credit risk from a treasury perspective by only depositing funds with authorised counter-parties with a
credit rating of at least ‘B’, and by ensuring that such positions are monitored regularly. Credit risk on cash and
short term deposits is limited because the counter-parties are banks with appropriate credit ratings assigned by
international credit rating agencies and is managed through holding funds with a range of international banks
and financial institutions. We therefore have limited concentration of credit risk in any one bank or territory. As
such any further detailed analysis of the credit risk of our financial assets by category is not considered
meaningful.
At 30 September 2020, cash of £1.2m (2019: £1.1m), included in the above balance, was pledged as collateral
for bank guarantees.
18. TRADE AND OTHER PAYABLES
At 30 Sep 2020
At 30 Sep 2019
£m
£m
Current liabilities:
Trade payables
32.1
35.9
Other taxes and social security
2.2
2.4
Accrued charges
59.6
65.4
Amounts owed to parent undertaking
6.9
6.9
Other payables
5.3
0.8
106.1
111.4
Non-current liabilities:
Deferred and contingent consideration
29.0
27.1
Accrued charges
1.6
-
Long Term Incentive Plan
1.7
0.3
32.3
27.4
Total
138.4
138.7
Amounts owed to parent undertaking above represent amounts owed to Life UK Healthcare Limited, the
parent company. These value are unpaid interest amounts due for payment within the next 12 months.
Interest is not to be charged on top of the interest.
Contingent consideration includes a discounting adjustment of £3.2m (2019: £2.4m) with amounts being paid
of £0.4m and FX adjustments of £0.9m representing the other movements.
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Alliance Medical Group Limited
Annual Report & Financial Statements 2020 Page 53
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 30 September 2020
19. BORROWINGS
At 30 September 2020
At 30 September 2019
Current
liabilities
£m
Non-
current
liabilities
£m
Total
£m
Current
liabilities
£m
Non-
current
liabilities
£m
Total
£m
Secured debt net of
issue costs
3.0
-
3.0
13.0
-
13.0
Other borrowings
0.2
0.7
0.9
0.2
0.6
0.8
Finance leases
12.1
21.0
33.1
14.0
21.3
35.3
Lease liabilities
5.5
30.0
35.5
Amounts owed to
parent undertakings
10.5
261.9
272.4
10.2
235.2
245.4
Total borrowings
31.3
313.6
344.9
37.4
257.1
294.5
The maturity profile of borrowings is analysed as follows:
At 30 September 2020
Secured
debt
£m
Other bank
borrowings
£m
Finance
leases
£m
Lease
liabilities
£m
Amounts
owed to
parent
undertakings
£m
Total
£m
Due within one year or on demand
3.0
0.2
12.1
5.5
-
20.8
Due between one and two years
-
0.4
9.0
4.5
-
13.9
Due between two and five years
-
0.3
11.2
7.8
238.5
257.8
Due after five years
-
-
0.8
17.7
33.9
52.4
Carrying value at 30 September 2020
3.0
0.9
33.1
35.5
272.4
344.9
At 30 September 2019
Secured
debt
£m
Other bank
borrowings
£m
Finance
leases
£m
Lease
liabilities
£m
Amounts
owed to
parent
undertakings
£m
Total
£m
Due within one year or on demand
13.1
0.2
14.0
-
10.2
37.5
Due between one and two years
-
0.2
9.6
-
-
9.8
Due between two and five years
-
0.4
11.7
-
204.2
216.3
Due after five years
-
-
-
-
32.9
32.9
13.1
0.8
35.3
-
247.3
296.5
Unamortised issue costs
(0.1)
-
-
-
(1.9)
(2.0)
Carrying value at 30 September 2019
13.0
0.8
35.3
-
245.4
294.5
As part of secured debt, there is a revolving credit facility of £5m, of which £0m was drawn in Sterling and £0m
was drawn in Euros at 30 September 2020 (2019: £1.7m and £3.2m). Interest on the revolving credit facility
was payable at a rate of LIBOR or Euribor, for loans denominated in Sterling and Euros respectively, plus a
margin of 3.75%.
Also included in secured debt are two invoice factoring facilities, these were drawn to the value of £3.0m (2019:
£8.2m), these facilities are secured against the sales invoices that the facility has agreed to lend upon.
Other bank borrowings are at floating rates of interest.
There were £6.6m of undrawn finance lease facilities available at 30 September 2020 (2019: £2.5m). The
finance leases are secured against the assets to which they relate and bear fixed interest rates which range
from 1.7% to 4.75%.
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Alliance Medical Group Limited
Annual Report & Financial Statements 2020 Page 54
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 30 September 2020
19. BORROWINGS (continued)
Amounts owed to parent undertakings at 30 September 2020 of £230.4m (2019: £204.2m) are subject to
interest at a rate of LIBOR plus a margin of 2.85%. These amounts are repayable as agreed between the
parties in writing which is anticipated to be not before December 2022. Amounts of £33.7m (2019: £32.9m) are
subject to interest at Euribor plus a margin of 2.85%. These amounts are repayable as agreed between the
parties in writing but not before 20 November 2025. Amounts of £10.5m (2019: £10.2m) are subject to interest
at a rate of LIBOR plus a margin of 2.20% and a repayable on demand as currently there is no written
agreement, hence the balance being shows as current.
Borrowings are analysed by currency as follows:
At 30 September 2020
At 30 September 2019
Sterling
£m
Euros
£m
US Dollars
£m
Total
£m
Sterling
£m
Euros
£m
US Dollars
£m
Total
£m
Secured debt
1.9
1.1
-
3.0
7.2
5.8
-
13.0
Other borrowings
-
0.6
0.3
0.9
-
0.8
-
0.8
Finance leases
30.9
2.2
-
33.1
32.2
3.1
-
35.3
IFRS 16 leases
9.0
26.5
-
35.5
-
-
-
-
Amounts owed to
parent undertakings
238.7
33.7
-
272.4
212.5
32.9
-
245.4
280.5
64.1
0.3
344.9
251.9
42.6
-
294.5
20. FINANCIAL COMMITMENTS
Operating lease commitments
The Group’s total future minimum lease payments under non-cancellable operating leases are as follows:
At 30 Sep 2020
At 30 Sep 2019
£m
£m
Due within one year
0.1
5.5
Between two and five years
0.1
14.6
After five years
-
5.6
0.2
25.7
The reduction from last year is as a result of the implementation of IFRS 16 from 1 October 2019. As a result
of this change in standard the majority of the leases have now been treated as right of use assets with a lease
creditor also accounted for at inception. The figure remaining in the above are outside the scope of IFRS 16
due to them being “exempt” as either low value or short term leases.
Capital commitments
As at 30 September 2020, the Group had placed contracts with a total value of £8.3m (2019: £6.7m) for
expenditure on property, plant and equipment, which is not provided in the financial statements.
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Alliance Medical Group Limited
Annual Report & Financial Statements 2020 Page 55
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 30 September 2020
21. FINANCIAL INSTRUMENTS
Fair value hierarchy
IFRS 7 “Financial Instruments: Disclosure”’ requires fair value measurements to be undertaken using a fair
value hierarchy that reflects the significance of the inputs used in the measurements, according to the following
levels:
Level 1 Unadjusted quoted prices in active markets for identical assets or liabilities.
Level 2 Inputs other than quoted prices included within Level 1 that are observable for the asset or
liability, either directly (that is, as prices) or indirectly (that is, derived from prices).
Level 3 Inputs for the asset or liability that are not based on observable market data (that is,
unobservable inputs).
All the Group’s financial instrument fair value measurements have been categorised as Level 2 in the current
period with the exception of the contingent consideration in relation to the Life Molecular Imaging acquisition in
2018, further details on this can be seen below.
There were no transfers between levels during the current period.
Life Molecular Imaging contingent consideration
The inputs utilised in the valuation of continent consideration for the Life Molecular Imaging business
(acquired in 2018) can be categorised as level 3 within the fair value hierarchy, meaning inputs are not based
on observable market data.
The contingent consideration payable is based on a discounted cash flow model, and includes items such as
timing of FDA approval and development phases and market adoption rate, neither of which are based on
observable market data and are the director’s best estimate based on experience and utilisation of third party
data and research undertaken. There has been no change to these assumptions of the valuation inputs since
the previous financial year and management monitor the external and internal factors which could result in
changes to these key inputs in the model.
The following table gives information about how the fair values of these contingent consideration is
determined (in particular, the valuation technique(s) and inputs used).
Financial
assets/
financial
liabilities
Valuation technique(s)
and key input(s)
,,
Significant unobservable
input(s)
Relationship and
sensitivity of
unobservable inputs to
fair value
Contingent
consideration
in a business
combination
(note 18)
Discounted cash flow
method was used to
capture the present
valuation of the
contingent consideration
which depends
importantly on the
probability of successes
assigned to products
created passing clinical
trials, given market
authorisation and
achieving reimbursement.
Timing of reimbursement
approval in the US and Europe
has been estimated as between
the years of 2023 and 2025 for
the primary product.
The further away the
approval, the lower the fair
value.
If the approval was pushed
back by one year while all
other variables were held
constant, the carrying
amount would decrease by
£5.3m million.
The market adoption rate is the
number of patients/scans that
will utilise the developed
product. Currently this has been
estimated to be between 0.6%
and 70% depending on the
product, its stage of
development and how far in the
future we are looking.
The lower the adoption
rate, the lower the fair
value.
If the adoption rate was
reduced by 10% while all
other variables were held
constant, the carrying
amount would decrease by
£0.3 million.
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Alliance Medical Group Limited
Annual Report & Financial Statements 2020 Page 56
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 30 September 2020
21. FINANCIAL INSTRUMENTS (continued)
The valuation of this liability at 30 September 2020 is £28.9m (2019: £26.9) a movement of £2.0m. £3.2m of
the movement related to unwinding of the discounting applied in the fair valuation as show in note 9 and
included within Consolidated Income Statement of £3.2m offset by an exchange gain of £1.2m.
Financial risk management
The Group’s principal financial liabilities comprise bank loans, finance leases and borrowings in the form of
intercompany lending advanced by its parent company. The main purpose of these financial liabilities is to
provide funding for the Group. Financial liabilities are denominated in Sterling and Euros, which match the cash
generation currencies of the Group, to mitigate foreign exchange risk.
The Group’s main risks arising from financial liabilities are therefore funding and liquidity risk, capital market
risk, principally as a result of changes in interest rates, and foreign currency risk. These are discussed further
below. The group is also a guarantor of the external debt taken out by a fellow group undertaking, Life UK
Holdco Limited subject to certain covenants, which has been discussed in detail in the going concern section
of the director’s report.
The Group’s principal financial assets comprise trade receivables and cash at bank and in hand. The Group
aims to ensure that it has sufficient financial resources to fund ongoing operations.
The Group has a concentration of financial risk in Alliance Medical Acquisitionco Limited, which is ultimately
spread across the trading companies of the Group. The maximum exposure at the balance sheet date is the
carrying value of the financial liabilities as disclosed in note 19, future commitments as disclosed in note 20 and
the balance owed to the parent company and disclosed in note 18.
Credit risk
The Group trades predominantly with creditworthy third parties. It is the Group’s policy that all customers who
wish to trade on credit terms are subject to verification procedures. In addition, receivable balances are
monitored on an ongoing basis with the result that the Group’s exposure to bad debts is not significant. The
maximum exposure is the carrying value amount as disclosed in note 16. There is no significant concentration
of credit risk within the Group. As a consequence, the Directors are satisfied that the Group’s exposure to credit
risk is acceptable.
With respect to credit risk arising from other financial assets of the Group, which comprise cash and cash
equivalents, the Group’s exposure to credit risk arises from the default of counterparties, with a maximum
exposure equal to the carrying amount of these instruments. Counterparty credit risk is managed through the
monitoring and active management of counterparty deposit balances.
Funding and liquidity risk
The current funding arrangements of the Group consist primarily of the secured bank loans, other bank loans,
finance leases and intercompany loans from the parent company. Further information regarding these
arrangements is included in notes 18 and 19.
The Group monitors its risk to a shortage of funds using a long term business plan that considers the maturity
of all of its financial liabilities and the projected cash flows from operations. The Group aims to have sufficient
committed borrowing facilities and operating cash flows to cover the core long term requirements of the Group.
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Alliance Medical Group Limited
Annual Report & Financial Statements 2020 Page 57
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 30 September 2020
21. FINANCIAL INSTRUMENTS (continued)
Financial assets
At 30 Sep 2020
At 30 Sep 2019
Measured at fair value
£m
£m
Other investments held (note 14)
0.9
0.5
0.9
0.5
At 30 Sep 2020
At 30 Sep 2019
Measured at amortised cost
£m
£m
Trade debtors (note 16)
39.0
45.0
39.0
45.0
Financial liabilities
At 30 Sep 2020
At 30 Sep 2019
Measured at fair value
£m
£m
Contingent consideration (note 18)
29.0
27.1
29.0
27.1
At 30 Sep 2020
At 30 Sep 2019
Measured at amortised cost
£m
£m
Amount owed to group undertakings (note 18)
6.9
6.9
Amount owed to parent undertakings (note 19)
272.4
245.4
Trade creditors (note 18)
32.1
35.9
311.4
288.2
The company’s income, expense, gains and losses in respect of financial instruments are summarised below:
At 30 Sep 2020
At 30 Sep 2019
Interest income and expense
£m
£m
Total interest expense for financial liabilities at
amortised cost (note 9)
11.7
14.4
Discounting of contingent consideration (note 9)
3.2
2.4
14.9
16.8
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Alliance Medical Group Limited
Annual Report & Financial Statements 2020 Page 58
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 30 September 2020
21. FINANCIAL INSTRUMENTS (continued)
The maturity table below details the contractual, undiscounted cash flows (both principal and interest) for the
Group’s financial liabilities. Interest payments have been calculated using the LIBOR and Euribor rates at the
period end, except where rates had already been contracted.
At 30 September 2020
Within 1
year
£m
Between 1
and 2 years
£m
Between 2
and 5 years
£m
More than
5 years
£m
Total
£m
Fixed rate:
Finance leases
12.4
9.2
11.2
0.9
33.7
IFRS 16 leases
6.3
5.3
9.8
20.8
42.2
Floating rate:
Secured debt
3.0
-
-
-
3.0
Other borrowings
0.2
0.4
0.1
0.2
0.9
Amounts owed to parent
undertakings
18.5
8.0
248.7
33.9
309.1
Non-interest bearing:
Deferred consideration
-
-
0.1
28.9
29.0
Current liabilities
108.2
-
-
-
108.2
148.6
22.9
269.9
84.7
526.1
At 30 September 2019
Within 1
year
£m
Between 1
and 2 years
£m
Between 2
and 5 years
£m
More than
5 years
£m
Total
£m
Fixed rate:
Finance leases
15.2
10.3
12.1
-
37.6
Floating rate:
Secured debt
13.3
-
-
-
13.3
Other borrowings
0.2
0.2
0.4
-
0.8
Amounts owed to parent
undertakings
18.8
8.6
213.8
34.1
275.3
Non-interest bearing:
Deferred consideration
0.2
-
-
65.4
65.6
Current liabilities
109.0
-
-
-
109.0
156.7
19.1
226.3
99.5
501.6
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Alliance Medical Group Limited
Annual Report & Financial Statements 2020 Page 59
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 30 September 2020
21. FINANCIAL INSTRUMENTS (continued)
Capital market risk
The Group is subject to capital market risk, primarily in relation to changes in interest rates.
The Group’s financial liabilities are analysed as follows:
As at 30 September 2020
Floating
£m
Fixed
£m
Non-interest
bearing
£m
Total
£m
Sterling
241.1
39.9
48.8
329.8
Euro
35.2
28.3
56.4
119.9
US Dollar
-
0.3
32.0
32.3
Swiss Franc
-
-
-
-
Polish Zloty
-
-
0.1
0.1
276.3
68.5
137.3
482.1
As at 30 September 2019
Floating
£m
Fixed
£m
Non-interest
bearing
£m
Total
£m
Sterling
220.4
32.2
43.2
295.8
Euro
38.8
3.1
58.6
100.5
US Dollar
-
-
29.4
29.4
Swiss Franc
-
-
4.8
4.8
Polish Zloty
-
-
0.2
0.2
259.2
35.3
136.2
430.7
Floating rate financial liabilities comprise bank loans, overdrafts, invoice factoring facilities and intercompany
loans from the parent company. Where the financial liabilities are denominated in Sterling they bear interest at
rates based on LIBOR and where they are denominated in Euros they bear interest at rates based on Euribor.
At 30 September 2020 and 30 September 2019, the Group’s fixed rate financial liabilities comprised finance
leases.
The following table demonstrates the sensitivity to a reasonably possible change in interest rates, with all other
variables held constant, to the Group’s results before tax. There would be no direct impact on the Group’s
equity in the event of such a change.
Increase/
decrease in
basis points
At 30 Sep 2020
£m
At 30 Sep 2019
£m
Sterling
+100
(2.4)
(2.2)
Euro
+100
(0.4)
(0.4)
Sterling
-100
2.4
2.2
Euro
-100
0.4
0.4
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Alliance Medical Group Limited
Annual Report & Financial Statements 2020 Page 60
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 30 September 2020
21. FINANCIAL INSTRUMENTS (continued)
Foreign currency risk
The analysis by currency of the Group’s financial liabilities is shown above. The Group’s financial assets are
analysed as follows:
At 30 Sep 2020
At 30 Sep 2019
£m
£m
Sterling
63.7
41.8
Euro
54.2
55.3
US Dollar
3.5
4.0
Swiss Franc
-
0.5
Polish Zloty
-
0.1
121.4
101.7
The following table demonstrates the sensitivity to a reasonably possible change in Sterling against the
currencies that contribute to the Group results, on external balances, with all other variables held constant, of
the Group’s results before tax (due to the changes in fair value of monetary assets and liabilities) and the
Group’s equity (due to changes in the retranslation of foreign operations). 5% has been used for the sensitivity
on the basis this is a reasonable approximation of the possible changes.
Within the UK companies there are net intercompany assets totalling £150.3m in Euros (2019:£146.2m) and
£13.9m asset in GBP in a US$ functional currency company (2019: liability of £4.0m) which are subject to
exchange rate fluctuations which would be recorded within finance costs.
On 23 June 2016 the UK voted in the European Union (EU) referendum to exit the EU. The outcome of this
referendum caused instability in the Sterling value and, as a result, a 5% change in the Sterling against Euro
exchange rate was considered an appropriate measure during the year to 30 September 2020, of foreign
currency risk, this year there have been no significant changes so the same assumptions have been followed.
As a result of recent acquisitions, the importance of other exchange rates to the Group results is increasing,
with more currencies now having a potential impact. The main exposure to the Group is translation risk (page
3).
At 30 September 2020
Effect on results before tax
£m
Effect on equity
£m
+5%
-5%
+5%
-5%
Sterling vs Euro rate
(0.5)
0.5
(2.6)
2.9
Sterling vs Polish Zloty rate
0.1
(0.1)
(0.2)
0.2
Sterling vs US Dollar rate
0.2
(0.3)
1.1
(1.2)
Sterling vs Swiss Franc rate
-
-
-
-
At 30 September 2019
Effect on results before tax
£m
Effect on equity
£m
+5%
-5%
+5%
-5%
Sterling vs Euro rate
(1.5)
1.7
(3.1)
3.4
Sterling vs Polish Zloty rate
-
-
(0.1)
0.1
Sterling vs US Dollar rate
0.3
(0.3)
(2.6)
2.8
Sterling vs Swiss Franc rate
0.6
(0.7)
3.9
(4.3)
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Alliance Medical Group Limited
Annual Report & Financial Statements 2020 Page 61
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 30 September 2020
22. DEFERRED TAX
The deferred tax included in the Group’s income statement and balance sheet is as follows:
Deferred tax in the income statement
12 months to
30 Sep 2020
12 months to
30 Sep 2019
£m
£m
Origination and reversal of temporary differences
(0.4)
(3.2)
Deferred tax asset recognised
-
2.1
Adjustments in respect to prior years
(0.3)
-
Total deferred tax (charge)/credit in the income
statement
(0.7)
(1.1)
Deferred tax in the balance sheet:
The movement in deferred tax assets and liabilities are as follows:
Assets:
Temporary
differences
including capital
allowances
£m
Liabilities:
Short term
temporary
differences
£m
Liabilities:
Recognition of
intangibles
£m
Total
£m
At 30 September 2019
7.2
-
(2.1)
5.1
Origination and reversal of
temporary differences
(0.7)
-
0.3
(0.4)
Other movements
(0.1)
-
-
(0.1)
Adjustments in relation to prior
years
(0.3)
-
-
(0.3)
Acquisition of subsidiaries
-
-
-
-
Deferred tax asset recognition
-
-
-
-
At 30 September 2020
6.1
-
(1.8)
4.3
At 30 September 2020:
Non-current asset
6.1
-
-
6.1
Non-current liability
-
-
(1.8)
(1.8)
6.1
-
(1.8)
4.3
At 30 September 2019:
Non-current asset
7.2
-
-
7.2
Non-current liability
-
-
(2.1)
(2.1)
7.2
-
(2.1)
5.1
Deferred tax assets are recognised to the extent that it is probable that taxable profits will be available against
which deductible temporary differences can be utilised.
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Alliance Medical Group Limited
Annual Report & Financial Statements 2020 Page 62
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 30 September 2020
22. DEFERRED TAX (continued)
Unrecognised deferred tax assets
There are capital allowance and non-trading losses available to carry forward and off-set future trading and
non-trading profits respectively, should they arise, within various subsidiary companies, for which a deferred
tax asset has not been provided as follows:
At 30 Sep 2020
At 30 Sep 2019
£m
£m
Accelerated capital allowances
-
-
Non-trading losses
27.7
19.7
27.7
19.7
The above unrecognised deferred tax assets are not deemed to have an expiry date.
Due to the nature of the Group there may exist taxation losses in jurisdictions which may be material, but for
which a full assessment of which has yet to be undertaken, and therefore there is a lack of certainty over
either their quantum or ability to utilise. However based on initial review it is likely that there are no material
amounts that could be utilised in the foreseeable future.
Furthermore following the acquisition of Piramal Imaging the group have performed an initial review of the tax
losses in each of the legal entities acquired. Due to the timing of when taxable profits are expected to arise in
those locations with brought forward taxable losses, and due to the level of restrictions that may apply, no
deferred taxation assets have been recognised, albeit a material level of unprovided deferred taxation is likely
to exist within the acquired group, the level of which is being formally assessed and quantified.
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Alliance Medical Group Limited
Annual Report & Financial Statements 2020 Page 63
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 30 September 2020
23. EMPLOYEE BENEFITS
Defined benefit pension schemes
Retirement benefit obligations in the balance sheet are made up as follows:
At 30 Sep 2020
At 30 Sep 2019
£m
£m
Trattamento di Fine Rapporto scheme
(7.4)
(7.0)
(7.4)
(7.0)
Trattamento di Fine Rapporto scheme
On 1 January 2007, the Italian Financial Act (law 296/2006) introduced considerable amendments to the rules
on post-employment benefits, including the selection to be made by the worker with respect to the allocation
of accruing benefits. In particular, for companies with more than 50 employees on the date of introduction of
the reform, these new regulations required new post-employment benefit contributions to be allocated to
pension plans or to an INPS treasury account based on the employee choice. In this case, only employee
severance indemnities accrued up to 31 December 2006 continue to be classified as “defined-benefit plans”,
while those accruing subsequent to that date are classified as a “defined-contribution plan”, as all obligations
of the company are met when it makes the periodic contribution to third-party entities. Therefore, discounted
amounts are no longer recognised in the Income Statement. Instead, outlays made to the various types of
pension plans selected by employees or to the separate INPS treasury fund, calculated based on art. 2120 of
the Italian Civil Code, are recognised under personnel costs.
For employees of Italian companies with less than 50 employees (Alliance Medical S.r.l., Alliance Medical
Italia S.r.l., Alliance Medical Technologies S.r.l., IMED S.r.l., Centro Diagnostico Castellano S.r.l., Laboratorio
Albaro S.r.l., Centro di Radiologia S.r.l., Radioterapia Aurelia S.r.l., Centro Alfa S.r.l., Il Centro S.r.l. -
Diagnostica e Terapia Medica and Priamar S.r.l.) employee severance indemnities accrued as at 31
December 2020 take the form of a defined benefit plan. The Group's obligation in relation to defined benefit
plans and the annual cost recognised in the Income Statement is determined on the basis of actuarial
valuations using the projected unit credit method.
IAS 19 (revised) disclosures
The key weighted average assumptions used by the actuary and the Directors for the TFR scheme were:
At 30 Sep
2020
At 30 Sep
2019
%
%
Discount rate for liabilities
0.7
0.8
Inflation rate
1.2
1.5
Future salary increases
1.0
1.0
Future pension increases (as dictated by Article 2120 of the Civil Code)
2.4
2.6
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Alliance Medical Group Limited
Annual Report & Financial Statements 2020 Page 64
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 30 September 2020
23. EMPLOYEE BENEFITS (continued)
A quantitative sensitivity analysis for significant assumptions and the impact on the net defined benefit obligation
is as shown below:
At 30 Sep
2020
At 30 Sep
2019
£m
£m
Assumption: Discount rate for liabilities
0.25% increase in sensitivity level
0.2
(0.2)
0.25% decrease in sensitivity level
(0.1)
0.2
Assumption: Inflation rate
0.25% increase in sensitivity level
-
0.1
0.25% decrease in sensitivity level
0.2
(0.1)
Assumption: Future salary increase
0.25% increase in sensitivity level
-
0.1
0.25% decrease in sensitivity level
0.3
(0.1)
Mortality assumptions are updated regularly based on official statistics from the Italian State (ISTAT 2000) in
relation to this calculation, only insofar as predicting the likelihood of a current employee dying in service.
The amount included in the balance sheet arising from the Group’s obligation in respect of its TFR scheme is
as follows:
At 30 Sep
2020
At 30 Sep
2019
£m
£m
Present value of scheme liabilities
(7.4)
(7.0)
Net TFR obligation
(7.4)
(7.0)
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Alliance Medical Group Limited
Annual Report & Financial Statements 2020 Page 65
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 30 September 2020
23. EMPLOYEE BENEFITS (continued)
Movements in the present value of TFR obligations were as follows:
At 30 Sep 2020
At 30 Sep 2019
£m
£m
Brought forward
(7.0)
(6.0)
Current service cost
(0.7)
(0.7)
Interest (charge)/credit
(0.1)
(0.1)
Actuarial (losses)/gains
0.2
(0.4)
Exchange differences
(0.2)
-
Benefits paid
0.4
0.2
Increase resulting from business acquisition
-
-
Settlements
-
-
At end of period
(7.4)
(7.0)
Defined contribution pension schemes
The Group participates in number of defined contribution pension schemes, the assets of which are held
separately from those of the Group and are invested with insurance companies and external fund managers.
The total cost charged to the income statement is shown in the table below. £0.3m (2019: £0.2m) of
contributions were outstanding at the balance sheet date.
Benefit costs charged to the income statement
Benefit costs charged to the income statement in the period relate to:
12 months to
30 Sep 2020
12 months to
30 Sep 2019
£m
£m
Defined contribution pension schemes
2.2
2.2
Trattamento di Fine Rapporto scheme
0.8
0.8
3.0
3.0
Amounts charged to statement of comprehensive income
Items charged to the statement of comprehensive income:
12 months to
30 Sep 2020
12 months to
30 Sep 2019
£m
£m
Actuarial gains/(losses)
0.2
(0.4)
0.2
(0.4)
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Alliance Medical Group Limited
Annual Report & Financial Statements 2020 Page 66
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 30 September 2020
24. PROVISIONS
Property
£m
Other
£m
Total
£m
At 30 September 2019
3.1
2.4
5.5
Charged to the income statement
during the year
0.7
0.1
0.8
Utilised during the year
(0.2)
(0.2)
(0.4)
Reallocated from accruals in the year
1.4
8.6
10.0
At 30 September 2020
5.0
10.9
15.9
At 30 September 2020:
Current liability
2.9
8.7
11.6
Non-current liability
2.1
2.2
4.3
5.0
10.9
15.9
At 30 September 2019:
Current liability
0.7
0.2
0.9
Non-current liability
2.4
2.2
4.6
3.1
2.4
5.5
Property provisions relate to various property liabilities across the Group. As a result of the sale of the business
and business changes to the property portfolio, certain leases have been identified as onerous during the year
and additional provisions have been created. In addition, detailed assessments have been made of the costs
that will be incurred in respect of property dilapidation clauses in the event of vacating properties. The liabilities
continue to be monitored and the provision will be released in line with the costs incurred.
The other provision relates to the decommissioning of cyclotrons at the end of their life and various other
provisions relating to exposures incurred in normal trading. The liabilities continue to be monitored and the
provision will be released in line with the costs incurred.
Also included in other are provisions for ongoing tax and legal cases in Italy, with an unknown certainty of
outcome and value. As a result, these values have been transferred out from accruals where they were
previously reported.
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Alliance Medical Group Limited
Annual Report & Financial Statements 2020 Page 67
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 30 September 2020
25. SHARE CAPITAL
The following authorised and allotted shares exist:
Number of
shares at
30 Sep 2020
£m
at 30 Sep
2020
Number of
shares at
30 Sep 2019
£m
at 30 Sep
2019
Authorised:
A Ordinary shares of £0.0001 each
1,000,000
-
1,000,000
-
B Ordinary shares of £0.001 each
253,549
-
253,549
-
C Ordinary shares of £0.0001 each
35,000
-
35,000
-
D Ordinary shares of £0.0001 each
3,500
-
3,500
-
1,292,049
-
1,292,049
-
Allotted, called up and full paid:
A Ordinary shares of £0.0001 each
1,000,000
-
1,000,000
-
B Ordinary shares of £0.001 each
253,549
-
253,549
-
C Ordinary shares of £0.0001 each
35,000
-
35,000
-
D Ordinary shares of £0.0001 each
3,500
-
3,500
-
1,292,049
-
1,292,049
-
The voting and other rights for the shares are as follows:
(a) A and B ordinary shares have full voting, dividend and capital distribution (including on winding up) rights;
they do not confer any rights of redemption.
(b) C and D ordinary shares do not have any voting rights. On sale, listing or winding up the net equity value
shall be allocated firstly to the B ordinary shareholders, then to the D shareholders and then to the C
shareholders and finally any balance will be distributed to the A shareholders pro rata. Every distribution
and return of capital, whether or not derived from a sale, shall be applied as between the classes of ordinary
Shares pro rata to the net equity value allocated to such classes on a sale, listing or winding up.
The Group's objectives when managing capital are to safeguard the Group's ability to continue as a going
concern, in order to provide returns for shareholders and benefits for other stakeholders, and to maintain an
optimal capital structure to reduce the cost of capital. In order to maintain or adjust the capital structure, the
Group may adjust the amount of dividends paid to shareholders, return capital to shareholders, issue new
shares, and sell assets to reduce debt or borrow additional debt.
26. FINANCE GUARANTEES
The Company has provided a finance guarantee to the bank in respect of a leasing facility and a revolving
credit facility held by Alliance Medical Leasing Limited, a subsidiary company, further details of which are in
note 19. This guarantee requires the company to repay the facility should the subsidiary company default on
the agreements, there are no further restrictions on this company as a result of the guarantee.
Alliance Medical Ltd, a subsidiary company, also has an invoice factoring agreement, further details in note
19, which Alliance Medical Group Limited is also a guarantor of. This guarantee requires the company to
repay the facility should the subsidiary company default on the agreements, there are no further restrictions
on this company as a result of the guarantee.
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Alliance Medical Group Limited
Annual Report & Financial Statements 2020 Page 68
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 30 September 2020
27. CASH FLOW FROM OPERATIONS
12 months to
30 Sep 2020
12 months to
30 Sep 2019
£m
£m
Profit attributable to equity shareholders for the period
2.9
6.7
Impact of IFRS 16 implementation
1.3
-
Non-controlling interest
-
-
Taxation charge/(credit)
2.6
6.4
Finance costs
14.9
16.8
Depreciation and amortisation charge
41.2
33.8
(Profit)/Loss on disposals of property, plant and
equipment
0.2
(0.1)
Share of profit of joint ventures
(0.5)
(0.6)
Exceptional items
-
3.7
Cash flow from operations before movements in
working capital, exceptional items and provisions
paid.
62.6
66.7
Decrease in working capital
15.0
0.9
Cash flow from operations before exceptional items
and provisions paid
77.6
67.6
Exceptional items paid
-
(2.8)
Provision increase/(decrease)
0.4
0.1
Cash generated from operations
78.0
64.9
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Alliance Medical Group Limited
Annual Report & Financial Statements 2020 Page 69
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 30 September 2020
28. RELATED PARTY TRANSACTIONS
Transactions between the Company and its subsidiaries, which are related parties, have been eliminated on
consolidation and are not disclosed in this note. The Group’s share of the income and net assets of the joint
ventures is disclosed in note 13.
The group is financed via intercompany loans from its immediate parent company, Life UK Healthcare Limited
(note 19) totalling £272.4 (2019: £245.4m). £269.0m (2019: £235.2) of this financing has interest payable on
these loans at commercial rates based on LIBOR or Euribor plus a margin of 2.85%. Interest paid during the
year to 30 September 2020 was £8.3m (2019: £8.7m). The remaining £10.5m (2019: £10.2m) has interest
payable on these loans at commercial rates based on LIBOR or Euribor plus a margin of 2.20%. Interest paid
during the year to 30 September 2020 was £0.3m (2019: £0.3m).
During the year, management charges were charged from Life Management (Pty) Limited, the ultimate parent
company, totalling £0.9m (2019: £1.6m).
Overhead costs totalling £0.1m (2019: £0.1 m) were recharged to joint ventures in Ireland during the period.
During the year, management charges were paid to Osman Solutions S.L a company incorporated in Spain.
This is a company directed by a person also a director of a subsidiary company included in this consolidation.
These are services provided by the Director in managing the business and total £0.4m for the year ended 30
September 2020.
During the year emoluments were paid to the directors totalling £0.8m (year to 30 September 2019: £1.0m),
these were for services provided to the business, further detail can be seen in note 8 of the financial statements.
29. POST BALANCE SHEET EVENTS
The Covid pandemic is considered to remain a significant event after the balance sheet date, even though it
has also impacted the period in these financial statements. The impact of Covid is still being felt across the
globe within the healthcare industry, including the countries that Alliance Medical Group operate in. Following
the balance sheet date, a number of European Countries, including the UK, has entered second national lock
down. The effects of Covid are still felt around the business, however volumes are almost back to 100% of pre-
Covid levels and systems and protocols put in place during wave 1 of the pandemic now mean that the business
can continue to operate at a more effective level during the ongoing Covid impacts. This is as well as
opportunities taken as a result of the pandemic, have meant that the directors do not believe that the effects of
Covid post the balance sheet date will lead to a material impact in the numbers presented and therefore no
adjustments are required.
As well as the above there are ongoing discussions between the UK and the EU in relation to a trade deal
following the UKs exit from the EU effective from 1 January 2021. Currently there are no details regarding the
likelihood or the contents of such a deal. As a result it cannot be estimated what impacts Brexit will have on the
Group and therefore no changes have been made to these financial statements.
30. IMMEDIATE AND ULTIMATE CONTROLLING PARTY
The immediate parent undertaking is Life UK Healthcare Limited. The financial statements for this company
can be obtained from Companies House or by writing to the Directors at Iceni Centre, Warwick Technology
Park, Warwick, CV34 6DA.
The ultimate parent undertaking and controlling party is Life Healthcare Group Holdings Limited. This company
is also the parent undertaking of the largest and smallest group which consolidates the results of Alliance
Medical Group Limited. The financial statements for the ultimate parent undertaking and controlling party can
be obtained by writing to the Secretary at Oxford Manor, 21 Chaplin Road, Illovo, Guateng, South Africa, 2196,
which is also its registered address.
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Alliance Medical Group Limited
Annual Report & Financial Statements 2020 Page 70
COMPANY BALANCE SHEET
As at 30 September 2020
Company registration number 08601376
At 30 Sep 2020
At 30 Sep 2019
Note
£m
£m
Non-current assets
Investment in subsidiaries
6
32.5
32.5
Current assets
Trade and other receivables
7
-
1.4
Current liabilities
Trade and other payables
8
(2.9)
(2.2)
Net current liabilities
(2.9)
(0.8)
Total assets less current liabilities
29.6
31.7
Non-current liabilities
Trade and other payables
8
(33.7)
(33.0)
NET LIABILITIES
(4.1)
(1.3)
Equity
Share capital
-
-
Share premium account
127.4
127.4
Other reserves
(126.6)
(126.6)
Retained Earnings brought forward
(2.1)
0.4
Loss for the year
(2.8)
(2.5)
EQUITY ATTRIBUTABLE TO OWNERS OF THE
COMPANY
(4.1)
(1.3)
The notes on pages 72 to 80 form an integral part of these financial statements.
The financial statements on pages 70 to 80 were approved by the Board of Directors on 23 December 2020
and were signed on its behalf by:
The Company has taken advantage of the legal dispensation under section 408 (3) of the Companies Act 2006
allowing it to not publish a separate profit and loss account. The result attributable to the shareholders of
Alliance Medical Group Limited for the year includes a loss of £2.8m in respect of the Company (2019: £2.5m).
H A D Marsh
Director
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Alliance Medical Group Limited
Annual Report & Financial Statements 2020 Page 71
COMPANY STATEMENT OF CHANGES IN EQUITY
For the year ended 30 September 2020
Share
capital
£m
Share
premium
account
£m
Other
reserves
£m
Retained
earnings
£m
Total
£m
At 30 September 2018
-
127.4
(126.6)
0.4
1.2
Loss for the year and total
comprehensive expense
-
-
-
(2.5)
(2.5)
At 30 September 2019
-
127.4
(126.6)
(2.1)
(1.3)
Loss for the year and total
comprehensive expense
-
-
-
(2.8)
(2.8)
At 30 September 2020
-
127.4
(126.6)
(4.9)
(4.1)
The notes on pages 72 to 80 form an integral part of these financial statements.
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Alliance Medical Group Limited
Annual Report & Financial Statements 2020 Page 72
NOTES TO THE COMPANY FINANCIAL STATEMENTS
For the year ended 30 September 2020
1. GENERAL INFORMATION
The Company is a private company limited by shares. The Company is incorporated in the United Kingdom
under the Companies Act 2006 and registered in England and Wales. The address of the registered office is
given on page 2. The nature of the Group’s operations and its principal activities are set out in the Strategic
Report on page 3.
2. STATEMENT OF COMPLIANCE
These financial statements have been prepared in accordance with applicable accounting standards in the
United Kingdom.
3. ACCOUNTING POLICIES
The following accounting policies have been applied consistently in dealing with items which are considered
material in relation to these financial statements.
Basis of preparation
These financial statements have been prepared on a going concern basis, under the historical cost convention
and in accordance with the Companies Act 2006. The Company has adopted FRS 101 “Reduced Disclosure
Framework” for these financial statements.
Going concern
The Directors performs regular assessments on the going concern status of the Company. These assessments
take into consideration:
current solvency of the Company;
current liquidity position;
available committed and uncommitted bank facilities;
cash commitments for the next 12 months;
bank covenants; and
debt maturities.
As part of the assessments the board of directors has reviewed the Company budgets, forecasts, available
cash resources and unutilised facilities as well as the debt maturity profile. The forecasts for the Company have
been prepared, covering its future performance, capital and liquidity for a period of 12 months from the date of
approval of these financial statements including performing sensitivity analyses. The expected future cash flows
were adjusted to reflect the best estimate of the short and longer-term impact of the COVID-19 pandemic (the
pandemic).
To ensure the Company has sufficient cash reserves, in addition to securing bank facilities at Life UK Holdco
level, management has implemented a number of mitigating actions which include cost and cash preservation
levers across the Group’s operations.
The external debt used to provide funding for the Alliance Medical Group companies (of which this company is
a subsidiary) sit outside of these financial statements (the external debt is recorded in Life UK Holdco Limited)
and include covenants that must be met at various measurement points as defined in the contract for these
facilities. These covenants are measured based on the results of the wider group- this being the group headed
by Life Healthcare Group Holdings Limited. Life Healthcare Group Holdings Limited is the ultimate parent
undertaking and controlling party of Alliance Medical Group limited. The wider group successfully refinanced
this external debt during March 2020 and extended the Debt’s maturities. This wider Group is in a strong
financial position with net debt to normalised EBITDA as at 30 September 2020 at 2.96 times (2019: 1.96 times).
Given the significant uncertainty caused by the pandemic, the wider Group pre-emptively negotiated amended
bank covenants for the period up to 31 March 2021 and continue to monitor prospective compliance with such
covenants. In addition, banking facilities have been increased and the wider Group’s committed undrawn bank
facilities as at 30 September 2020 are R6.3 billion.
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Annual Report & Financial Statements 2020 Page 73
NOTES TO THE COMPANY FINANCIAL STATEMENTS
For the year ended 30 September 2020
3. ACCOUNTING POLICIES (continued)
The Director’s assessments and sensitivity analysis show that the Company has sufficient accessible capital
and liquidity to continue to meet its obligations as they fall due and as a result it is appropriate to prepare these
consolidated financial statements on a going concern basis.
Standards and interpretations effective in the current period
In the current year, the Company has applied IFRS16 Leases accounting standard issued by the International
Accounting Standards Board (the Board) that are mandatorily effective for an accounting period that begins on
or after 1 January 2019. Their adoption has not had any material impact on the disclosures or on the amounts
reported in these financial statements.
In the current year, the Company has applied a number of amendments to IFRS Standards issued by the
International Accounting Standards Board (the Board) that are mandatorily effective for an accounting period
that begins on or after 1 January 2020. Their adoption has not had any material impact on the disclosures or
on the amounts reported in these financial statements.
Exemptions
As a qualifying entity the Company has taken advantage of the following disclosure exemptions under FRS
101:
The requirements of paragraph 45(b) and 46-52 of IFRS 2 “Share Based Payment”;
The requirements of IFRS 7 “Financial Instruments: Disclosures”;
The requirements of paragraphs 91-99 of IFRS 13 “Fair Value Measurement”;
The requirement in paragraph 38 of IAS 1 “Presentation of Financial Statements” to present
comparative information in respect of:
o Paragraph 79(a)(iv) of IAS 1 “Presentation of Financial Statements”;
o Paragraph 73(e) of IAS 16 “Property, Plant and Equipment”; and
o Paragraph 118(e) of IAS 38 “Intangible Assets”;
The requirements of paragraphs 10(d), 10(f), 16, 38A, 38B, 38C, 38D, 40A, 40C, 40D, 111 and 134-
136 of IAS 1 “Presentation of Financial Statements”;
The requirements of IAS 7 “Statement of Cash Flows”;
The requirements of paragraphs 30 and 31 of IAS 8 “Accounting Policies, Changes in Accounting
Estimates and Errors”; and
The requirements in IAS 24 “Related Party Disclosures” to disclose Key management personnel
remuneration as well as related party transactions entered into between two or more members of a
group, provided that any subsidiary which is a party of the transaction is wholly owned by such a
member.
This information is included in the consolidated financial statements of Alliance Medical Group Limited as at 30
September 2020.
Fixed asset investments
Investments in subsidiary undertakings are stated at cost less provision for impairment.
Financial instruments
The Company classifies financial instruments, or their component parts, on initial recognition as financial assets,
financial liabilities or equity instruments according to the substance of the contractual arrangements entered
into. An equity instrument is any contract that evidences a residual interest in the assets of the Company after
deducting all of its liabilities. Equity instruments issued by the Company are recorded at the proceeds received,
net of direct issue costs. All financial instruments are initially recognised at fair value. After initial recognition,
loans and receivables, including short-term receivables, and financial liabilities, including trade payables, are
carried at amortised cost, as reduced by appropriate allowances for estimated irrecoverable amounts.
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Annual Report & Financial Statements 2020 Page 74
NOTES TO THE COMPANY FINANCIAL STATEMENTS
For the year ended 30 September 2020
3. ACCOUNTING POLICIES (continued)
Foreign currencies
Transactions in foreign currencies are recorded at the rate ruling at the date of transaction or at the contracted
rate if the transaction is covered by a forward foreign currency contract. Monetary assets and liabilities
denominated in foreign currencies are retranslated at the rate of exchange ruling at the balance sheet date. All
differences are taken to the profit and loss account.
Impairment of assets
The carrying amounts of assets are reviewed at each balance sheet date to determine whether there is any
indication of impairment. If any such indication exists, the asset’s recoverable amount is estimated to determine
the amount of impairment loss.
For the purpose of impairment testing of these assets, recoverable amount is determined on an individual asset
basis unless the asset does not generate cash flows that are largely independent of those from other assets. If
this is the case, recoverable amount is determined for the cost generating unit (“CGU”) to which the asset
belongs to. An asset’s recoverable amount is the higher of the asset’s, or CGU’s, fair value less costs to sell
and its value in use. In assessing value in use, the estimated future cash flows are discounted to their present
value using a pre-tax discount rate that reflects current market assessments of the time value of money and
the risks specific to the asset.
Where the carrying amount of an asset exceeds its recoverable amount, the asset is considered impaired and
is written down to its recoverable amount. An impairment loss is recognised in profit or loss in the period in
which it arises.
Share capital
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares are
shown in equity as a deduction from the proceeds received.
Critical accounting judgements and sources of estimation uncertainty
There were no critical accounting judgements that would have a significant effect on the amounts recognised
in the Parent Company Financial Statements or key sources of estimation uncertainty at the balance sheet date
that would have a significant risk of causing a material adjustment to the carrying amounts of assets and
liabilities within the next financial year.
4. STAFF COSTS AND DIRECTORS’ EMOLUMENTS
a) Directors’ remuneration
Directors’ remuneration is shown on page 40 of the Group financial statements. The costs are borne by a
subsidiary undertaking.
b) Staff costs
During the period ended 30 September 2020, there were no employees of the company, other than the
Directors. There were 3 directors during the year (2019:3).
5. PROFIT AND LOSS ACCOUNT
The Company has taken advantage of the legal dispensation under section 408 (3) of the Companies Act 2006
allowing it to not publish a separate profit and loss account. The consolidated result attributable to the
shareholders of Alliance Medical Group Limited for the year includes a loss of £2.8m in respect of the Company
(2019: £2.5m).
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Alliance Medical Group Limited
Annual Report & Financial Statements 2020 Page 75
NOTES TO THE COMPANY FINANCIAL STATEMENTS
For the year ended 30 September 2020
6. INVESTMENTS
a) Principal subsidiary and joint venture undertakings
The Company is the beneficial owner of the ordinary share capital and voting rights, either itself or through
subsidiary undertakings (* indicates indirect holdings), of the following companies:
Name
Country of
incorporation
Effective
%
ownership
Principal activities
Alliance Medical Acquisitionco Limited
England
(A)
100
Finance Services
*Alliance Medical Holdings Limited
England
(A)
100
Management services
*Alliance Medical Leasing Limited
England
(A)
100
Finance Services
*Alliance Medical Limited
England
(A)
100
Medical diagnostic imaging services
and parent of English operating
subsidiaries
*Alliance Medical Radiopharmacy
Limited
England
(A)
100
Production of PET radio
pharmaceuticals
*Alliance Medical Molecular Imaging
Limited
England
(A)
100
Dormant company
*Alliance Diagnostic Services Limited
England
(A)
100
Medical diagnostic imaging services
*Lodestone Patient Care Limited
England
(A)
100
Dormant company
*Life Molecular Imaging Limited
England
(A)
100
Development and production of PET
radio pharmaceuticals
*Alliance Medical Italia S.r.l.
Italy
(B)
100
Management services and parent of
Italian operating subsidiaries
*Alliance Medical S.r.l.
Italy
(B)
100
Medical diagnostic imaging services
*Urology Diagnostic S.r.l.
Italy
(B)
100
Medical diagnostic imaging services
*Alliance Medical Diagnostic S.r.l.
Italy
(B)
100
Medical diagnostic imaging services
*Radioterapia Aurelia S.r.l.
Italy
(B)
67
Medical diagnostic imaging services
*Opportunity srl
Italy
(C)
100
Medical diagnostic imaging services
*Laboratorio Albaro srl
Italy
(C)
100
Medical diagnostic imaging services
*Il Centro srl Diagnostica e Terapia
Medica
Italy
(D)
100
Medical diagnostic imaging services
*Centro Polispecialistico valli Stura e
Orba Scrl
Italy
(E)
100
Medical diagnostic imaging services
*Imed srl
Italy
(V)
100
Medical diagnostic imaging services
*Centro Diagnostico Castellano srl
Italy
(V)
100
Medical diagnostic imaging services
*Centro di Radiologia srl
Italy
(W)
100
Medical diagnostic imaging services
*Centro Alfa srl
Italy
(X)
100
Medical diagnostic imaging services
* Priamar srl
(1)
Italy
(Y)
100
Medical diagnostic imaging services
*Charter Medical Diagnostic Imaging
Limited
Ireland
(F)
100
Medical diagnostic imaging services
*Alliance Medical Diagnostic Imaging
Limited
Ireland
(F)
100
Management services and parent of
Irish operating subsidiaries
*Alliance Medical Diagnostic Imaging
(Northern Ireland) Limited
Ireland
(F)
100
Medical diagnostic imaging services
*Barringtons MRI Limited
Ireland
(G)
50
Medical diagnostic imaging services
*20/20 Imaging Limited
Ireland
(H)
33
Medical diagnostic imaging services
*Cork Community Imaging Limited
(2)
Ireland
(F)
100
Medical diagnostic imaging services
*BSM Diagnostica Gesellschaft mbH
Austria
(R)
100
Production of PET radio
pharmaceuticals
*Alliance Medical GmbH
Germany
(I)
100
Medical diagnostic imaging services
and parent of German operating
subsidiaries
*Tomovation GmbH
Germany
(I)
100
Medical diagnostic imaging services
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Alliance Medical Group Limited
Annual Report & Financial Statements 2020 Page 76
NOTES TO THE COMPANY FINANCIAL STATEMENTS
For the year ended 30 September 2020
6. INVESTMENTS (continued)
Name
Country of
incorporation
Effective
%
ownership
Principal activities
*Life Radiopharma f-con GmbH
Germany
(N)
100
Production of PET radio
pharmaceuticals
*Life Radiopharma Bonn GmbH
Germany
(O)
100
Production of PET radio
pharmaceuticals
*Life Radiopharma Berlin GmbH
Germany
(Q)
100
Production of PET radio
pharmaceuticals
*Life Molecular Imaging GmbH
Germany
(S)
100
Development and production of PET
radio pharmaceuticals
*Alliance Medical BV
Holland
(J)
100
Medical diagnostic imaging services
*Life Radiopharma Warszawa SP Zoo
Poland
(P)
100
Production of PET radio
pharmaceuticals
*Alliance-Servicos Diagnosticos por
Imagen Unipessoal LDA
Portugal
(K)
100
Dormant company
*Imagen Medical Digital Servicios
Diagnosticos S.A.
Spain
(L)
80
Medical diagnostic imaging services
*Alliance Medical La Rioja S.L.
Spain
(M)
100
Medical diagnostic imaging services
*Life Molecular Imaging SA
Switzerland
(T)
100
Development and production of PET
radio pharmaceuticals
*Life Molecular Imaging Inc
USA
(U)
100
Development and production of PET
radio pharmaceuticals
*European Scanning Centre (Harley
Street) Limited
England
(A)
100
Medical diagnostic imaging services
*European Scanning Centre LLP (Harley
Street)
England
(A)
84.5
Medical diagnostic imaging services
*European Scanning Centre LLP 2
(Harley Street)
England
(A)
92.5
Medical diagnostic imaging services
*European Scanning Centre LLP MSK
(Harley Street)
England
(A)
97
Medical diagnostic imaging services
*European Scanning Centre LLP
(Manchester)
England
(A)
98.5
Medical diagnostic imaging services
*European Scanning Centre LLP
(Cardiff)
England
(A)
100
Medical diagnostic imaging services
*held indirectly
(1)
Acquired 31 December 2019
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Alliance Medical Group Limited
Annual Report & Financial Statements 2020 Page 77
NOTES TO THE COMPANY FINANCIAL STATEMENTS
For the year ended 30 September 2020
6. INVESTMENTS (continued)
The registered offices of the investments are as follows:
(A) Iceni Centre, Warwick Technology Park, Warwick, Warwickshire, CV34 6DA, UK
(B) Via G. Mameli 42/A, 20851, Lissone, Italy
(C) Via Paolo Boselli 32/6, 16146, Genova, Italy
(D) Piaza Dante 9/10, 16121, Genova, Italy
(E) Via Vallecalda 45, 16013, Campo Ligure, Italy
(F) Portal House, Loughmore Avenue, Raheen Business Park, Limerick, Ireland
(G) Barringtons Hospital, Georges Quay, Limerick Ireland
(H) 82 North Main Street, Bandon, Co. Cork, Ireland
(I) Westring 168, 44575 Castrop-Rauxel, Germany
(J) PO Box 1768, NL-3800 BT Amersfoot, Netherlands
(K) Avda. Antonio Augusto de Aguilar, 150-5 Dto. 1050-022 Lisboa, Portugal
(L) Calle Illa, Num. 52 Planta Bajo. 08202 Sabadell, Barcelona, Spain
(M) Avda. Portugal, Num. 23 Planta 1, Despacho 2, 26001 Logrono, Spain
(N) Nic.-Aug.-Otto-Str. 7a, D-12489, Berlin, Germany
(O) Spessartstr. 9, D-53119 Bonn, Germany
(P) Ul. Szeligowska 3, PL-05-850 Szeligi, Poland
(Q) Max-Planck-Strabe 4, D-12489 Berlin, Germany
(R) Alser strasse 25, A-1080 Wien, Austria
(S) Tegeler Strasse 6-7, 13353 Berlin, Germany
(T) 13 Route de l’Ecole, 1753 Matran, Switzerland
(U) C/o The Corporation Trust Company, 1209 Orange Street, Wilmington, Delaware 19801, New
Castle County, USA.
(V) Via Alfieri 13, 35125 Padova, Italy
(W) Via Zenson di Piave, 31100 Treviso, Italy
(X) Via Bellini 174, 41121 Modena, Italy
(Y) Via Partigiani, 13/r - 17100 Savona, Italy
Included in the above are two dormant companies, Alliance Medical Molecular Imaging Limited (company
number 08540627) and Lodestone Patient Care limited (company number 02609976) both incorporated in the
UK. Dormant accounts for both of these companies are prepared and filed with Companies House, copies are
available from Iceni Centre, Warwick Technology Park, Warwick, CV34 6DA, the registered office. The
directors of the company are exempt from the requirement to deliver a copy of the company’s individual
accounts to the registrar by virtue of section s448A and the company is exempt from the requirements to the
audit of individual accounts by virtue of this section s479A.
b) Company investments in subsidiaries
At 30 Sep 2020
At 30 Sep 2019
£m
£m
Investment in Alliance Medical Acquisitionco Limited
32.5
32.5
32.5
32.5
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Alliance Medical Group Limited
Annual Report & Financial Statements 2020 Page 78
NOTES TO THE COMPANY FINANCIAL STATEMENTS
For the year ended 30 September 2020
7. TRADE AND OTHER RECEIVABLES
Debtors: amounts falling due within one year
At 30 Sep 2020
At 30 Sep 2019
£m
£m
Amounts owed by Group undertakings
-
1.4
-
1.4
Amounts owed by Group undertakings are unsecured, interest free and repayable on demand.
8. TRADE AND OTHER PAYABLES
a) Amounts falling due within one year
At 30 Sep 2020
At 30 Sep 2019
£m
£m
Amounts owed to parent undertakings
1.8
2.2
Amounts owed to Group undertakings
1.1
-
2.9
2.2
Amounts owed to parent undertakings are unsecured, interest free and repayable on demand.
b) Amounts falling due after more than one year
At 30 Sep 2020
At 30 Sep 2019
£m
£m
Amount owed to parent undertakings
33.7
33.0
33.7
33.0
c) Amount owed to parent undertaking
The maturity profile of the borrowings is:
At 30 Sep 2020
At 30 Sep 2019
£m
£m
More than five years
33.7
33.0
33.7
33.0
The amounted owed to the entity’s parent undertaking, is subject to interest at LIBOR plus a margin of 2.85%.
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Alliance Medical Group Limited
Annual Report & Financial Statements 2020 Page 79
NOTES TO THE COMPANY FINANCIAL STATEMENTS
For the year ended 30 September 2020
9. SHARE CAPITAL AND RESERVES
The following authorised and allotted shares exist:
Number of
shares at
30 Sep 2020
£m
at 30 Sep
2020
Number of
shares at
30 Sep 2019
£m
at 30 Sep
2019
Authorised:
A Ordinary shares of £0.0001 each
1,000,000
-
1,000,000
-
B Ordinary shares of £0.001 each
253,549
-
253,549
-
C Ordinary shares of £0.0001 each
35,000
-
35,000
-
D Ordinary shares of £0.0001 each
3,500
-
3,500
-
1,292,049
-
1,292,049
-
Allotted, called up and full paid:
A Ordinary shares of £0.0001 each
1,000,000
-
1,000,000
-
B Ordinary shares of £0.001 each
253,549
-
253,549
-
C Ordinary shares of £0.0001 each
35,000
-
35,000
-
D Ordinary shares of £0.0001 each
3,500
-
3,500
-
1,292,049
-
1,292,049
-
The voting and other rights for the shares are as follows:
(a) A and B ordinary shares have full voting, dividend and capital distribution (including on winding up) rights;
they do not confer any rights of redemption.
(b) C and D ordinary shares do not have any voting rights. On sale, listing or winding up the net equity value
shall be allocated firstly to the B ordinary shareholders, then to the D shareholders and then to the C
shareholders and finally any balance will be distributed to the A shareholders pro rata. Every distribution
and return of capital, whether or not derived from a sale, shall be applied as between the classes of ordinary
Shares pro rata to the net equity value allocated to such classes on a sale, listing or winding up.
The Group's objectives when managing capital are to safeguard the Group's ability to continue as a going
concern, in order to provide returns for shareholders and benefits for other stakeholders, and to maintain an
optimal capital structure to reduce the cost of capital. In order to maintain or adjust the capital structure, the
Group may adjust the amount of dividends paid to shareholders, return capital to shareholders, issue new
shares, and sell assets to reduce debt or borrow additional debt.
The other reserves balance contains an adjustment made in 2013 when the company carried out a debt for
equity swap.
The share premium reserve contains the premium arising on issue of equity shares, net of issue expenses.
The retained earnings reserve represents cumulative profits or losses, including unrealised profit on the re-
measurement of investment properties, net of dividends paid and other adjustments.
10. RELATED PARTY TRANSACTIONS
In accordance with FRS 101, the company has taken advantage of the exemption available not to disclose
transactions with other group undertakings.
There are no other related party transactions outside of those with group undertakings.
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Alliance Medical Group Limited
Annual Report & Financial Statements 2020 Page 80
NOTES TO THE COMPANY FINANCIAL STATEMENTS
For the year ended 30 September 2020
11. FINANCE GUARANTEES
The Company has provided a finance guarantee to the bank in respect of a leasing facility and a revolving
credit facility held by Alliance Medical Leasing Limited, a subsidiary company, further details of which are in
note 19. This guarantee requires the company to repay the facility should the subsidiary company default on
the agreements, there are no further restrictions on this company as a result of the guarantee.
Alliance Medical Ltd, a subsidiary company, also has an invoice factoring agreement, further details in note
19, which Alliance Medical Group Limited is also a guarantor. This guarantee requires the company to repay
the facility should the subsidiary company default on the agreements, there are no further restrictions on this
company as a result of the guarantee.
12. POST BALANCE SHEET EVENTS
The Covid pandemic is considered to remain a significant event after the balance sheet date, even though it
has also impacted the period in these financial statements. The impact of Covid is still being felt across the
globe within the healthcare industry, including the countries that Alliance Medical Group operate in. Following
the balance sheet date, a number of European Countries, including the UK, has entered second national lock
down. The effects of Covid are still felt around the business, however volumes are almost back to 100% of pre-
Covid levels and systems and protocols put in place during wave 1 of the pandemic now mean that the business
can continue to operate at a more effective level during the ongoing Covid impacts. This is as well as
opportunities taken as a result of the pandemic, have meant that the directors do not believe that the effects of
Covid post the balance sheet date lead to a material impact in the numbers presented and therefore no
adjustments are required.
As well as the above there are ongoing discussions between the UK and the EU in relation to a trade deal
following the UKs exit from the EU effective from 1 January 2021. Currently there are no details regarding the
likelihood or the contents of such a deal. As a result it cannot be estimated what impacts Brexit will have on the
Company and therefore no changes have been made to these financial statements.
13. IMMEDIATE AND ULTIMATE CONTROLLING PARTY
The immediate parent undertaking is Life UK Healthcare Limited. The financial statements for this company
can be obtained from Companies House or by writing to the Directors at Iceni Centre, Warwick Technology
Park, Warwick, CV34 6DA.
The ultimate parent undertaking and controlling party is Life Healthcare Group Holdings Limited. This company
is also the parent undertaking of the largest and smallest group which consolidates the results of Alliance
Medical Group Limited. The financial statements for the ultimate parent undertaking and controlling party can
be obtained by writing to the Secretary at Oxford Manor, 21 Chaplin Road, Illovo, Guateng, South Africa, 2196,
which is also its registered address.
DocuSign Envelope ID: 3C3A25B5-E5AA-4815-A06F-3D63452F2F73
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