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Alliance Holdings Medical Limited

Annual Report & Financial Statements 2020 Page 1

Alliance Medical Holdings Limited

Annual Report &

Financial Statements

For the year ended 30 September 2020

Company number 04113112

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Alliance Holdings Medical Limited

Annual Report & Financial Statements 2020 Page 2

DIRECTORS

H A D Marsh

M D Chapman

P P Van Der Westhuizen

INDEPENDENT AUDITORS

Deloitte LLP

Four Brindleyplace

Birmingham

B1 2HZ

BANKERS

NatWest Bank plc

1 Town Hall Building

Banbury

Oxon

OX16 8JS

REGISTERED OFFICE

Iceni Centre

Warwick Technology Park

Warwick

Warwickshire

CV34 6DA

United Kingdom

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Alliance Medical Holdings Limited

Annual Report & Financial Statements 2020 Page 3

STRATEGIC REPORT

PRINCIPAL ACTIVITY AND REVIEW OF THE YEAR

The principal activity of the Company during the year was that of strategic management services.

REVIEW OF THE BUSINESS

The Company provides strategic management services to fellow Group companies and transfers the costs of these

services across the Group.

The key performance indicators of the Company are:

Year to 30

September 2020

Year to 30

September 2019

£000

Turnover

134

118

EBITDA

(3,829)

(3,793)

Net liabilities

(12,999)

(10,009)

EBITDA is made up of Turnover less Admin expenses (excluding amortisation of £65,000 (2019: £65,000)).

The directors deem the success of this company to be measured on the success of the Alliance Medical Group as a

whole, as that is what this company aims to support.

This company does not consider there to be any other key performance indicators relevant to the business.

RESULTS AND DIVIDENDS

The loss for the financial year after taxation amounted to £2,990,000 (2019: £3,959,000) and was funded from

reserves. The loss is as a result of the costs being incurred by the management team that have not then been

recovered by recharging to the regions.

Dividends totalling £nil were paid in the period (2019: £nil), and the directors have not proposed a dividend since year

end.

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Alliance Medical Holdings Limited

Annual Report & Financial Statements 2020 Page 4

STRATEGIC REPORT (continued)

MANAGMENT OF PRINCIPAL RISKS AND UNCERTAINTIES

The Company Directors recognise the importance of sound risk management to the success of operations and

accordingly set policies to mitigate the risks. The principal risks and uncertainties facing the Company and the

potential impact and mitigation are summarised below.

Risk Category

Potential Impact

Mitigation

Liquidity risk

Withdrawal of funding

Liquidity risk is managed at the Group level and

includes regular monitoring of, and reporting

compliance with, bank covenants both

prospectively and retrospectively;

Applying cash collection targets throughout the

Group;

Regular cash flow forecasting, with action taken if

needed to re-time flows.

Counterparty credit

risk

A fellow subsidiary undertaking

may not satisfy its contractual

obligations in meeting its inter-

company liabilities

Counterparty credit risk is mitigated by ensuring

that loans to fellow subsidiaries contribute to the

long term success of the Group.

Economic risk

following referendum

decision to leave the

European Union

Reduced profitability as a result

of instability in the Sterling

Hedging via a portion of a parent undertaking’s

borrowings being denominated in Euros.

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Alliance Medical Holdings Limited

Annual Report & Financial Statements 2020 Page 5

STRATEGIC REPORT (continued)

SECTION 172(1) STATEMENT

In performing their duties under section 172, the directors of Alliance Medical Holdings 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.

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.

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Annual Report & Financial Statements 2020 Page 6

STRATEGIC REPORT (continued)

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.

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.

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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Annual Report & Financial Statements 2020 Page 7

STRATEGIC REPORT (continued)

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.

FUTURE DEVELOPMENTS

The Directors continue to seek new territories and technologies to expand the opportunities to enhance shareholder

value across the Group.

Approved by the board 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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Annual Report & Financial Statements 2020 Page 8

DIRECTORS’ REPORT

The Directors present their report together with the audited financial statements for year ended 30 September 2020.

FUTURE DEVELOPMENTS

The Directors continue to seek new territories and technologies to expand the opportunities to enhance shareholder

value across the Group.

DIRECTORS AND THEIR INTERESTS

The Directors of the Company who were in office during the period and up to the date of signing the financial

statements were as follows:

H A D Marsh

M D Chapman

P P Van Der Westhuizen

S B Viranna (resigned 17 January 2020)

No Director is beneficially interested in the share capital of the Company.

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.

DIVIDENDS

During the year a dividend of £nil was paid to shareholders (30 September 2019: £nil). Since year end no dividends

have been proposed.

POLITICAL DONATIONS

The Company made £nil (2019: £nil) political donations during the year.

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.

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Annual Report & Financial Statements 2020 Page 9

DIRECTORS’ REPORT (continued)

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.

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.

FINANCIAL RISK MANAGEMENT

The principal risks and uncertainties facing the Company and the potential impact and mitigation are summarised in

the Strategic Report.

ENERGY AND CARBON REPORTING

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.

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.

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Annual Report & Financial Statements 2020 Page 10

DIRECTORS’ REPORT (continued)

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 group in this financial year. 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.

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 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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Annual Report & Financial Statements 2020 Page 11

STATEMENT OF DIRECTORS’ RESPONSIBILITIES

The directors are responsible for preparing the Annual Report and the financial statements in accordance with

applicable law and regulations.

Company law requires the directors to prepare financial statements for each financial year. Under that law the

directors have prepared the financial statements in accordance with United Kingdom Generally Accepted Accounting

Practice (United Kingdom Accounting Standards and applicable law), including FRS 102 “The Financial Reporting

Standard applicable in the UK and Republic of Ireland”. 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 financial statements, the directors are

required to:

 select suitable accounting policies and then apply them consistently;

 state whether applicable UK Accounting Standards have been followed, subject to any material departures

disclosed and explained in the financial statements;

 make judgements and accounting estimates that are reasonable and prudent; and

 prepare the financial statements on the going concern basis unless it is inappropriate to presume that the

company will continue in business.

The directors 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.

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.

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Annual Report & Financial Statements 2020 Page 12

Independent auditor’s report to the members of Alliance Medical Holdings Limited

Report on the audit of the financial statements

Opinion

In our opinion the financial statements of Alliance Medical Holdings Limited (the ‘company’):

 give a true and fair view of the state of the company’s affairs as at 30 September 2020 and of its loss for

the year then ended;

 have been properly prepared in accordance with United Kingdom Generally Accepted Accounting

Practice, including Financial Reporting Standard 102 “The Financial Reporting Standard applicable in the

UK and Republic of Ireland”; and

 have been prepared in accordance with the requirements of the Companies Act 2006.

We have audited the financial statements which comprise:

 the profit and loss account;

 the balance sheet;

 the statement of changes in equity; and

 the related notes 1 to 19.

The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom

Accounting Standards, including Financial Reporting Standard 102 “The Financial Reporting Standard applicable in

the UK and Republic of Ireland” (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 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.

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 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.

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Annual Report & Financial Statements 2020 Page 13

Independent auditor’s report to the members of Alliance Medical Holdings Limited

Report on the audit of the financial statements (continued)

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 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 company or to cease operations, or have no realistic

alternative but to do so.

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.

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Independent auditor’s report to the members of Alliance Medical Holdings Limited

Report on the audit of the financial statements (continued)

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 company and its 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, or returns adequate for our audit have not been

received from branches not visited by us; or

 the 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.

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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Annual Report & Financial Statements 2020 Page 15

PROFIT AND LOSS ACCOUNT

for the year ended 30 September 2020

The Company’s activities all derive from continuing operations.

There is no other comprehensive income or expenses other than those included above and therefore a statement

of comprehensive income has not been included in these financial statements.

There is no material difference between the loss before taxation and the loss for the financial periods stated above

and their historical cost equivalents.

Year to 30

September

2020

Year to 30

September

2019

Notes

£000

TURNOVER

134

118

Administrative expenses

(4,028)

(3,976)

OPERATING LOSS

(3,894)

(3,858)

Interest receivable/(payable) and similar income

904

(101)

LOSS BEFORE TAXATION

(3,388)

(3,959)

Tax on loss

LOSS FOR THE FINANCIAL YEAR

(2,990)

(3,959)

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Annual Report & Financial Statements 2020 Page 16

BALANCE SHEET Company registered number: 04113112

As at 30 September 2020

At 30

September

2020

At 30

September

2019

Notes

£000

NON-CURRENT ASSETS

Intangible assets

111

CURRENT ASSETS

Debtors: amounts falling due within one year

37,375

35,092

Cash at bank and in hand

596

130

37,971

35,222

CURRENT LIABILITIES

Creditors: amounts falling due within one year

(50,628)

(45,220)

NET CURRENT LIABILITIES

(50,628)

(45,220)

TOTAL ASSETS LESS CURRENT LIABILITIES

(12,546)

(9,917)

NON-CURRENT LIABILITIES

Creditors: amounts falling due after more than one year

(439)

(92)

Provisions for liabilities and charges

(14)

NET LIABILITIES

(12,999)

(10,009)

CAPITAL AND RESERVES

Called up share capital

37,517

Share premium account

4,550

Profit and loss account

(55,066)

(52,076)

TOTAL SHAREHOLDERS’ DEFICIT

(12,999)

(10,009)

The notes on pages 18 to 29 form an integral part of these financial statements.

These financial statements on pages 15 to 29 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 17

STATEMENT OF CHANGES IN EQUITY

For the year ended 30 September 2020

Called up

capital

premium

account

Profit

and loss

account

Total

Shareholders’

deficit

£000

At 1 October 2018

37,517

4,550

(48,117)

(6,050)

Loss for the year

(3,959)

At 30 September 2019

37,517

4,550

(52,076)

(10,009)

Loss for the year

(2,990)

At 30 September 2020

37,517

4,550

(55,066)

(12,999)

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Alliance Medical Holdings Limited

Annual Report & Financial Statements 2020 Page 18

NOTES TO THE FINANCIAL STATEMENTS

For the year ended 30 September 2020

1. GENERAL INFORMATION

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 principle place of business is shown on

page 2. The principal activity of the Company is shown 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, including Financial Reporting Standard 102 “The Financial Reporting Standard applicable in the United

Kingdom and Republic of Ireland” (“FRS 102”) and the Companies Act 2006.

3. ACCOUNTING POLICIES

The following accounting policies have been applied consistently in dealing with items which are considered material

in relation to the Company’s financial statements.

Basis of preparation

These financial statements have been prepared on a going concern basis under the historical cost convention.

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.

DocuSign Envelope ID: 9D7A5DA1-F796-4980-8DF2-A662BBB520E4

Alliance Medical Holdings Limited

Annual Report & Financial Statements 2020 Page 19

NOTES TO THE FINANCIAL STATEMENTS

For the year ended 30 September 2020

3. ACCOUNTING POLICIES (continued)

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.

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.

Basis of consolidation

Group financial statements have not been prepared as permitted by Section 400 of the Companies Act 2006, as the

Company is a wholly owned subsidiary of Alliance Medical Group Limited, a company incorporated in England and

Wales, from whose registered office Group financial statements may be obtained (Iceni Centre, Warwick Technology

Park, Warwick, CV34 6DA, UK, its registered address). Therefore these financial statements present information

about the Company and not about its Group.

Exemptions

As a qualifying entity, the company has taken advantage of the disclosure exemptions available to it in respect of its

separate financial statements. The Company is consolidated in the financial statements of its parent, Group Limited,

which may be obtained at its registered address at The Iceni Centre, Warwick Technology Park, Warwick, Cv34 6DA.

The Company has taken advantage of the exemption provided in paragraph 1.12(b) of FRS 102 from preparing a

Statement of Cash Flows.

The Company has taken advantage of the exemption provided in paragraph 4.12(a) of FRS 102 from preparing a

reconciliation of the numbers of shares outstanding at the beginning and end of the period.

The Company has taken advantage of the exemption provided in paragraph 33.7 of FRS 102 from disclosing key

management personnel compensation.

The Company has taken advantage of the exemption provided in paragraphs 11.39-11.48A and 12.26-12.29 of FRS

102 from disclosing certain financial instrument disclosures. The financial instrument disclosures are incorporated

into the Group financial statements of the ultimate UK parent undertaking.

The Company has taken advantage of the exemption in paragraph 33.1(a) of FRS 102 from disclosing transactions

with related parties that are other wholly owned members of the Alliance Medical Group Limited group.

DocuSign Envelope ID: 9D7A5DA1-F796-4980-8DF2-A662BBB520E4

Alliance Medical Holdings Limited

Annual Report & Financial Statements 2020 Page 20

NOTES TO THE FINANCIAL STATEMENTS

For the year ended 30 September 2020

3. ACCOUNTING POLICIES (continued)

Revenue recognition

Turnover, which excludes value added tax, represents the value of services supplied, and is recognised according to

the value of services supplied in the period.

Operating leases

Rentals payable under operating leases are charged to the profit and loss account on a straight line basis over the

lease term.

Intangible assets

Intangible assets are stated at cost, which is the amount paid, less accumulated amortisation and impairment losses.

Purchased technology is amortised over their estimated useful life of 3 to 4 years.

Website development costs are capitalised as intangible assets, as the website generates sales for other regions

around the Alliance Medical Group, these regions are then charged for the use of this website which in turn delivers

benefits at least as great as the amount capitalised. Therefore the website development expenditure makes an

enduring contribution to the development of the revenue-generating capabilities of the website, and an enduring

asset is thus created. Website development costs are amortised over their useful economic life, which the Directors

consider to be three years on a straight line basis, the remaining amortisation period for the purchased technology

is less than 1 year.

Financial instruments

Financial assets and financial liabilities are recognised when the Company becomes a party to the contractual

provisions of the instrument.

Financial liabilities and equity instruments are classified 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.

(i) Financial assets and liabilities

All financial assets and liabilities are initially measured at transaction price (including transaction costs), except for

those financial assets classified as at fair value through profit or loss, which are initially measured at fair value (which

is normally the transaction price excluding transaction costs), unless the arrangement constitutes a financing

transaction. If an arrangement constitutes a financing transaction, the financial asset or financial liability is measured

at the present value of the future payments discounted at a market rate of interest for a similar debt instrument.

Financial assets and liabilities are only offset in the balance sheet when, and only when there exists a legally

enforceable right to set off the recognised amounts and the Company intends either to settle on a net basis, or to

realise the asset and settle the liability simultaneously.

Debt instruments that comply with all of the condition of paragraph 11.9 of FRS 102 are classified as ‘basic’. For

debt instruments that do not meet the conditions of FRS 102.11.9, the company considers whether the debt

instrument is consistent with the principle in paragraph 11.9A of FRS 102 in order to determine whether it can be

classified as basic. Instruments classified as ‘basic’ financial instruments are measured subsequently at amortised

cost using the effective interest method.

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Alliance Medical Holdings Limited

Annual Report & Financial Statements 2020 Page 21

NOTES TO THE FINANCIAL STATEMENTS

For the year ended 30 September 2020

3. ACCOUNTING POLICIES (continued)

Financial instruments (continued)

Debt instruments that have no stated interest rate (and do not constitute financing transaction) and are classified

as payable or receivable within one year are initially measured at an undiscounted amount of the cash or other

consideration expected to be paid or received, net of impairment.

With the exception of some hedging instruments, other debt instruments not meeting conditions of being ‘basic’

financial instruments are measured at fair value through profit or loss.

Commitments to make and receive loans which meet the conditions mentioned above are measured at cost (which

may be nil) less impairment.

Financial assets are derecognised when and only when a) the contractual rights to the cash flows from the financial

asset expire or are settled, b) the Company transfers to another party substantially all of the risks and rewards of

ownership of the financial asset, or c) the Company, despite having retained some, but not all, significant risks and

rewards of ownership, has transferred control of the asset to another party.

Financial liabilities are derecognised only when the obligation specified in the contract is discharged, cancelled or

expires.

(ii) Investments

Investments in non-derivative instruments that are equity of the issuer (where shares are publicly traded or their

fair value is reliably measurable) are measured at fair value through profit or loss. Where fair value cannot be

measured reliably, investments are measured at cost less impairment.

Investments in subsidiaries and associates are measured at cost less impairment. For investments in subsidiaries

acquired for consideration including the issue of shares qualifying for merger relief, cost is measured by reference

to the nominal value of the shares issued plus fair value of other consideration. Any premium is ignored.

(iii) Equity instruments

Equity instruments issued by the Company are recorded at the fair value of cash or other resources received or

receivable, net of transaction costs.

(iv) Fair value measurement

The best evidence of fair value is a quoted price for an identical asset in an active market. When quoted prices are

unavailable, the price of a recent transaction for an identical asset provides evidence of fair value as long as there

has not been a significant change in economic circumstances or a significant lapse of time since the transaction

took place. If the market is not active and recent transactions of an identical asset on their own are not a good

estimate of fair value, the fair value is estimated by using a valuation technique.

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.

DocuSign Envelope ID: 9D7A5DA1-F796-4980-8DF2-A662BBB520E4

Alliance Medical Holdings Limited

Annual Report & Financial Statements 2020 Page 22

NOTES TO THE FINANCIAL STATEMENTS

For the year ended 30 September 2020

3. ACCOUNTING POLICIES (continued)

Pensions

The Company operates defined contribution pension plans, administered by a third party, for Directors and

employees. Contributions are charged to the profit and loss account as they become payable.

Current tax

Current tax is the amount of income tax payable in respect of the taxable results for the period. Tax is calculated on

the basis of tax rates and laws that have been enacted or substantively enacted by the period end.

Deferred taxation

The deferred taxation charge takes into account taxation deferred due to timing differences between the treatment

of certain items for taxation and accounting purposes.

Deferred tax is recognised in respect of all timing differences that have originated but not reversed at the balance

sheet date where transactions or events that result in an obligation to pay more, or a right to pay less, tax in the

future have occurred at the balance sheet date, with the expectation that the Directors consider that it is more likely

than not that there will be suitable taxable profits from which the future reversal of the underlying timing differences

can be deducted. Deferred tax is measured on a non-discounted basis at the tax rates that are expected to apply in

the periods in which timing differences reverse, based on tax rates and laws enacted or substantively enacted at the

balance sheet date.

Functional and presentation currency

The Company’s functional and presentation currency is the pound sterling.

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

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. TURNOVER

Turnover represents amounts for the provision of services which fall within the Company’s continuing activities,

stated net of value added tax. All turnover originates in, and has an ultimate destination of, Europe.

5. OPERATING LOSS

This is stated after charging:

Year to 30

Sep 2020

Year to 30

Sep 2019

£000

Auditors’ remuneration

- audit of these financial statements

- tax and other services

Operating lease rentals

- land and buildings

DocuSign Envelope ID: 9D7A5DA1-F796-4980-8DF2-A662BBB520E4

Alliance Medical Holdings Limited

Annual Report & Financial Statements 2020 Page 23

NOTES TO THE FINANCIAL STATEMENTS

For the year ended 30 September 2020

6. Directors remuneration

Year to 30

Sep 2020

Year to 30

Sep 2019

£000

Emoluments

747

754

Company contributions paid to defined contribution pension schemes

758

Contributions of £11,000 (2019: £4,000) were made to defined contribution pension schemes on behalf of one (2019:

one) Director during the period. Three (2019: three) Directors of the Company were also, or have also been, Directors

of one or more companies in the Group during the period. These Directors do not believe that it is practicable to

apportion their emoluments between their services as Directors of the Company and their services as Directors of

other companies in the Group, hence the full value of their emoluments are shown in this company. Emoluments

include £nil (2019: £nil) in respect of payments for loss of office.

Emoluments include £nil (2019: £nil) in respect of payments made for executive directors becoming non-executive.

The amounts in respect of the highest paid director are as follows:

30 Sep 2020

30 Sep 2019

£000

Emoluments

432

339

Company contributions paid to defined contribution pension schemes

443

339

Emoluments include £nil (2019: £nil) in respect of payments made for executive directors becoming non-executive.

DocuSign Envelope ID: 9D7A5DA1-F796-4980-8DF2-A662BBB520E4

Alliance Medical Holdings Limited

Annual Report & Financial Statements 2020 Page 24

NOTES TO THE FINANCIAL STATEMENTS

For the year ended 30 September 2020

7. Staff costs

Year to 30

Sep 2020

Year to 30

Sep 2019

£000

Wages and salaries

1,646

1,505

Social security costs

221

178

Other pension costs

Redundancy payments

1,916

1,757

The average monthly number of employees (including Directors) during the period was 10 (2019: 9). These were all

administration staff.

8. INTEREST PAYABLE/RECEIVABLE AND SIMILAR CHARGES/INCOME

Year to 30

Sep 2020

Year to 30

Sep 2019

£000

Net retranslation of foreign currency loans and receivables

904

(101)

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Alliance Medical Holdings Limited

Annual Report & Financial Statements 2020 Page 25

NOTES TO THE FINANCIAL STATEMENTS

For the year ended 30 September 2020

9. TAX ON LOSS

(a) Tax on loss

There is no taxation in the period (2019: £nil).

(b) Factors affecting the tax for the period

The tax assessed for the period differs from (2019: differs from) that resulting from applying the standard rate of

corporation tax in the UK of 19% (2019: 19%). The differences are explained below:

Year to 30

Sep 2020

Year to 30

Sep 2019

£000

Loss before tax

(2,990)

(3,959)

Loss at the standard rate of 19% (2019: 19%)

(568)

(752)

Effects of:

Expenses not deductible for tax purposes

Utilisation of losses not recognised

(4)

Transfer pricing adjustment – imputed interest

(390)

Group relief surrendered/(claimed) for no consideration

875

756

Total tax for the year (note 9 (a))

There are no expiry dates of any timing differences or unused tax losses generated within this company.

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.

(d) Factors affecting the tax charge for the period

The Company has an unrecognised deferred tax asset in relation to accelerated capital allowances and other timing

differences of £23,000 (2019: £18,000). There is also unrecognised deferred tax asset in relation to trading losses

totalling £71,000 (2019: £63,000).

Deferred tax is not recognised as the future recovery of the asset is uncertain.

DocuSign Envelope ID: 9D7A5DA1-F796-4980-8DF2-A662BBB520E4

Alliance Medical Holdings Limited

Annual Report & Financial Statements 2020 Page 26

NOTES TO THE FINANCIAL STATEMENTS

For the year ended 30 September 2020

10. INTANGIBLE ASSETS

Purchased

technology

Total

£000

Cost

At 30 September 2019

195

Additions

At 30 September 2020

290

Accumulated depreciation

At 30 September 2019

(114)

Amortisation

(65)

Closing net book value

(179)

NBV as at 30 September 2020

111

NBV as at 30 September 2019

11. DEBTORS

At 30 Sep

2020

At 30 Sep

2019

£000

Amounts owed by Group undertakings

37,361

34,919

Prepayments and accrued income

173

37,375

35,092

Amounts owed by Group undertakings are unsecured, interest free, and are repayable on demand.

DocuSign Envelope ID: 9D7A5DA1-F796-4980-8DF2-A662BBB520E4

Alliance Medical Holdings Limited

Annual Report & Financial Statements 2020 Page 27

NOTES TO THE FINANCIAL STATEMENTS

For the year ended 30 September 2020

12. CREDITORS

Amounts falling due within one year

At 30 Sep

2020

At 30 Sep

2019

£000

Amounts owed to Group undertakings

49,251

44,230

Employee payables

534

181

Other taxation and social security

Accruals and deferred income

786

759

50,628

45,220

Amounts owed to Group undertakings, which are all UK-based, are unsecured, are repayable on demand and are

interest free.

Amounts falling due after more than one year

At 30 Sep

2020

At 30 Sep

2019

£000

Employee payables

439

13. PROVISIONS FOR LIABILITIES

Onerous lease

provision

£000

At 1 October 2018

Charged to the income statement

Utilised in the period

(94)

At 30 September 2019

Charged to the income statement

Utilised in the year

At 30 September 2020

Of the total onerous lease provision, £14,000 is due within one year (2019: £nil).

DocuSign Envelope ID: 9D7A5DA1-F796-4980-8DF2-A662BBB520E4

Alliance Medical Holdings Limited

Annual Report & Financial Statements 2020 Page 28

NOTES TO THE FINANCIAL STATEMENTS

For the year ended 30 September 2020

14. CAPITAL AND OTHER COMMITMENTS

The Company’s total future minimum lease payments under non-cancellable operating leases are as follows:

Land and buildings

At 30 Sep

2020

At 30 Sep

2019

£000

Within one year

Between two and five years

15. CALLED UP SHARE CAPITAL AND RESERVES

At 30 Sep

2020

At 30 Sep

2020

At 30 Sep

2019

At 30 Sep

2019

No.

£000

No.

£000

Ordinary shares of 1p each

Authorised

3,751,707,950

37,517

3,751,707,950

37,517

Allotted, called up and fully paid

3,751,707,950

37,517

3,751,707,950

37,517

There are no restrictions on the payment of dividends and the repayment of capital.

The share premium reserve contains the premium arising on issue of equity shares, net of issue expenses.

The profit and loss reserve represents cumulative profits or losses, including unrealised profit on the re-measurement

of investment properties, net of dividends paid and other adjustments.

16. RELATED PARTY TRANSACTIONS

There have been no related party transactions other than transactions with fellow subsidiaries of the Life Healthcare

Group Holdings Limited group.

In accordance with FRS 102, the company has taken advantage of the exemption available not to disclose transactions

with other group undertakings.

DocuSign Envelope ID: 9D7A5DA1-F796-4980-8DF2-A662BBB520E4

Alliance Medical Holdings Limited

Annual Report & Financial Statements 2020 Page 29

NOTES TO THE FINANCIAL STATEMENTS

For the year ended 30 September 2020

17. PARENT UNDERTAKINGS

The immediate parent company is Alliance Medical Acquisitionco Limited and the ultimate parent undertaking is Life

Healthcare Group Holdings Limited. The smallest group for which group financial statements are drawn up and which

include this company is Alliance Medical Group Limited, registered in England and Wales. The financial statements

can be obtained by writing to the Secretary at Iceni Centre, Warwick Technology Park, Warwick, CV34 6DA, the

company’s registered address. The largest group for which group financial statements are drawn up is Life Healthcare

Group Holdings Limited, registered in South Africa. The financial statements can be obtained by writing to the

Secretary at Oxford Manor, 21 Chaplin Road, Illovo, Guateng, South Africa, 2196, the company’s registered address.

18. POST EMPLOYMENT BENEFITS

The Company participates in defined contribution pension schemes, the assets of which are held separately from

those of the Company and are invested with an insurance company and external fund managers. The total charged to

the profit and loss account during the period was £49,000 (2019: £74,000).

19. 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 group in this financial year. 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.

DocuSign Envelope ID: 9D7A5DA1-F796-4980-8DF2-A662BBB520E4

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