Annual Report 2017
Contents
Strategic report
Highlights...........................................................................................................01
Bango at a glance................................................................................................02
Chairman’s statement..........................................................................................03
CEO’s statement..................................................................................................05
CFO’s statement.................................................................................................07
Strategy for growth.............................................................................................10
Principal risks and uncertainties............................................................................11
Report of Directors
Directors............................................................................................................13
Company information...........................................................................................15
Directors’ report...................................................................................................16
Corporate governance report................................................................................18
Audit comittee report...........................................................................................19
Remuneration committee report...........................................................................20
Financial statements
Independent auditor’s report to the members of Bango PLC (Bango)......................22
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Consolidated statement of comprehensive income...................................................29
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Consolidated statement of changes in equity...........................................................31
(cid:49)(cid:82)(cid:87)(cid:72)(cid:86)(cid:3)(cid:87)(cid:82)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:191)(cid:81)(cid:68)(cid:81)(cid:70)(cid:76)(cid:68)(cid:79)(cid:3)(cid:86)(cid:87)(cid:68)(cid:87)(cid:72)(cid:80)(cid:72)(cid:81)(cid:87)(cid:86)(cid:17)(cid:17)(cid:17)(cid:17)(cid:17)(cid:17)(cid:17)(cid:17)(cid:17)(cid:17)(cid:17)(cid:17)(cid:17)(cid:17)(cid:17)(cid:17)(cid:17)(cid:17)(cid:17)(cid:17)(cid:17)(cid:17)(cid:17)(cid:17)(cid:17)(cid:17)(cid:17)(cid:17)(cid:17)(cid:17)(cid:17)(cid:17)(cid:17)(cid:17)(cid:17)(cid:17)(cid:17)(cid:17)(cid:17)(cid:17)(cid:17)(cid:17)(cid:17)(cid:17)(cid:17)(cid:17)(cid:17)(cid:17)(cid:17)(cid:17)(cid:17)(cid:17)(cid:17)(cid:17)(cid:17)(cid:17)(cid:17)(cid:17)(cid:17)(cid:17)(cid:17)(cid:17)(cid:17)(cid:17)(cid:17)(cid:17)(cid:17)(cid:17)(cid:17)(cid:17)(cid:17)(cid:17)(cid:17)(cid:17)(cid:17)(cid:17)(cid:22)(cid:21)
(cid:54)(cid:87)(cid:68)(cid:87)(cid:72)(cid:80)(cid:72)(cid:81)(cid:87)(cid:3)(cid:82)(cid:73)(cid:3)(cid:191)(cid:81)(cid:68)(cid:81)(cid:70)(cid:76)(cid:68)(cid:79)(cid:3)(cid:83)(cid:82)(cid:86)(cid:76)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3)(cid:82)(cid:73)(cid:3)(cid:37)(cid:68)(cid:81)(cid:74)(cid:82)(cid:3)(cid:51)(cid:47)(cid:38)(cid:171)(cid:171)(cid:171)(cid:171)(cid:171)(cid:171)(cid:171)(cid:17)(cid:17)(cid:17)(cid:17)(cid:17)(cid:17)(cid:17)(cid:17)(cid:17)(cid:17)(cid:17)(cid:17)(cid:17)(cid:17)(cid:17)(cid:17)(cid:17)(cid:17)(cid:17)(cid:17)(cid:17)(cid:17)(cid:17)(cid:17)(cid:17)(cid:17)(cid:17)(cid:17)(cid:17)(cid:17)(cid:17)(cid:17)(cid:17)(cid:17)(cid:17)(cid:17)(cid:17)(cid:17)(cid:24)(cid:21)
Statement of changes in equity of Bango PLC.........................................................53
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(cid:49)(cid:82)(cid:87)(cid:72)(cid:86)(cid:3)(cid:87)(cid:82)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:191)(cid:81)(cid:68)(cid:81)(cid:70)(cid:76)(cid:68)(cid:79)(cid:3)(cid:86)(cid:87)(cid:68)(cid:87)(cid:72)(cid:80)(cid:72)(cid:81)(cid:87)(cid:86)(cid:171)(cid:17)(cid:17)(cid:17)(cid:17)(cid:17)(cid:17)(cid:17)(cid:17)(cid:17)(cid:17)(cid:17)(cid:17)(cid:17)(cid:17)(cid:17)(cid:17)(cid:17)(cid:17)(cid:17)(cid:17)(cid:17)(cid:17)(cid:17)(cid:17)(cid:17)(cid:17)(cid:17)(cid:17)(cid:17)(cid:17)(cid:17)(cid:17)(cid:17)(cid:17)(cid:17)(cid:17)(cid:17)(cid:17)(cid:17)(cid:17)(cid:17)(cid:17)(cid:17)(cid:17)(cid:17)(cid:17)(cid:17)(cid:17)(cid:17)(cid:17)(cid:17)(cid:17)(cid:17)(cid:17)(cid:17)(cid:17)(cid:17)(cid:17)(cid:17)(cid:17)(cid:17)(cid:17)(cid:17)(cid:17)(cid:17)(cid:17)(cid:17)(cid:17)(cid:17)(cid:17)(cid:17)(cid:17)(cid:24)(cid:24)
2
Bango PLC | Annual Report 2017
Highlights
Highlights
•
End User Spend (EUS) increased
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(cid:133)(cid:21)(cid:26)(cid:20)(cid:17)(cid:23)(cid:80)(cid:3)
(cid:20)(cid:19)(cid:24)(cid:8)(cid:3)
£132.3m)
(cid:87)(cid:82)(cid:3)
• (cid:53)(cid:72)(cid:89)(cid:72)(cid:81)(cid:88)(cid:72)(cid:3) (cid:76)(cid:81)(cid:70)(cid:85)(cid:72)(cid:68)(cid:86)(cid:72)(cid:71)(cid:3) (cid:25)(cid:19)(cid:8)(cid:3) (cid:87)(cid:82)(cid:3) (cid:133)(cid:23)(cid:17)(cid:21)(cid:80)(cid:3)
(cid:11)(cid:41)(cid:60)(cid:21)(cid:19)(cid:20)(cid:25)(cid:29)(cid:3)(cid:133)(cid:21)(cid:17)(cid:25)(cid:80)(cid:12)
•
Bango operational
costs were
(cid:86)(cid:87)(cid:68)(cid:69)(cid:79)(cid:72)(cid:3) (cid:68)(cid:87)(cid:3) (cid:133)(cid:21)(cid:17)(cid:22)(cid:80)(cid:3) (cid:11)(cid:41)(cid:60)(cid:21)(cid:19)(cid:20)(cid:25)(cid:29)(cid:3) (cid:133)(cid:21)(cid:17)(cid:23)(cid:80)(cid:12)(cid:15)(cid:3)
demonstrating the high scalability
of the platform
6
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EUS, revenue and opex costs
300
M
£
/
S
U
E
250
200
150
100
50
0
(cid:41)(cid:60)(cid:21)(cid:19)(cid:20)(cid:23)
(cid:41)(cid:60)(cid:21)(cid:19)(cid:20)(cid:24)
(cid:41)(cid:60)(cid:21)(cid:19)(cid:20)(cid:25)
(cid:41)(cid:60)(cid:21)(cid:19)(cid:20)(cid:26)
EUS revenue
Operating costs
End User Spend (EUS)
DCB for Amazon retail in Japan
Bango enabled a new payment method for Amazon customers in Japan. Amazon
customers with a KDDI (au) or NTT DOCOMO mobile phone account can now pay for
physical goods from Amazon.co.jp, by charging the cost to their mobile phone bill.
Mobile wallets in Google Play
Continuing its history of launching disruptive payment technologies on a large scale
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as a payment method for customers buying from Google Play in Africa.
Upgraded Google Play routes
Three Google Play routes upgraded to the Bango Platform. By applying Bango Boost
technology they experience an immediate uplift in sales and move back into growth.
“
1
We are constantly on the lookout for new ways to optimize our mobile services and
ensure they’re paced with our customers’ growing online needs. We are excited to
adopt Bango technology which will allow us to build on the success of our existing app
store carrier billing and provide our customers a frictionless payment experience.
“
Karim Tabbouche, Chief Commercial Officer of VIVA Bahrain
Bango PLC | Annual Report 2017
Bango at a glance
In 2017, Bango added new
customers using the Bango
Platform, expanded global
reach with new payment routes
and increased development
in technology to support new
products and services from
our customers. Each of these
growth factors, provides a
strong base for more success
in 2018 and beyond for Bango
and its customers.
Connected commerce
Bango is the payment platform
the world’s most
chosen by
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sales faster in the age of connected
commerce.
people make
Working with global stores including
Google, Amazon, and Microsoft, Bango
has become the industry standard,
helping
payments
quickly and conveniently. Through its
(cid:83)(cid:68)(cid:85)(cid:87)(cid:81)(cid:72)(cid:85)(cid:86)(cid:75)(cid:76)(cid:83)(cid:86)(cid:3) (cid:68)(cid:81)(cid:71)(cid:3) (cid:85)(cid:72)(cid:68)(cid:70)(cid:75)(cid:15)(cid:3) (cid:37)(cid:68)(cid:81)(cid:74)(cid:82)(cid:3) (cid:82)(cid:3812)(cid:72)(cid:85)(cid:86)(cid:3)
unique insights derived from pooled
data and shared knowledge. Bango
gives businesses unrivalled visibility into
their markets and customers, increasing
sales and customer acquisition. Built
to scale, the Bango Platform supports
the exponential growth ambitions of its
global partners.
Bango at a glance
Carrier billing
on Xbox One
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content then expanded the availability
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over 200 million subscribers across
Europe and the USA.
Operator wallets
in Google Play
Launched new app store
payments services including
African operator wallets in Google
Play, enabling our partners
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methods with no risk.
Amazon Prime
resale in India
Launched resale and bundling
technology in India, enabling Bharti
Airtel customers to sign-up to Amazon
Prime in India as part of a bundled
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Carrier billing
in Amazon Japan
Japanese customers are in the
enviable position of being able
to use this convenient payment
method at checkout for physical
goods as well as digital content.
‘Most Innovative
DCB Technology’
award
Bango won the award for the ‘Most
Innovative DCB Technology’ at the
Global Direct Carrier Billing Awards
2017.
Bango PLC | Annual Report 2017
2
Chairman’s statement
Chairman’s statement
I am delighted to report that
the vision and plan the Bango
management team set out at its
January 2017 strategy day has
been delivered. 2017 was a year in
which the remarkable breadth of
the Bango Platform was thoroughly
and successfully demonstrated.
In a year of many achievements,
enabling a new payment method for the
world’s biggest online retailer in its third
largest global market, was a highlight.
The Amazon business in Japan covers
retail, digital products and services such
as Amazon Prime and Prime Student.
The technical requirements to support
this kind of retail payments are far
greater than for digital purchases, which
validates
investment
Bango has made in the sophisticated
capabilities of the Bango Platform. This
investment has proven to be a shrewd
decision by management and signposts
the longevity of Bango technology as the
market develops in new ways.
long-term
the
At the heart of the Bango strategy is
the idea that a platform accumulates
a vast amount of information from
multiple sources, and delivers value
to customers and partners that they
cannot obtain through direct, bilateral
relationships. The Bango Platform is
truly global, collecting data from end
user activity across Europe, Asia, Africa,
Oceania and the Americas. The business
today powers digital and retail sales,
using direct billing, wallets and reseller
business models, for the world’s biggest
internet companies which can grow their
sales faster by partnering with Bango.
This places Bango in a unique position,
and with a unique opportunity, in the
commerce market.
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of
the Bango Platform was again
demonstrated when Bharti Airtel, India’s
biggest Mobile Network Operator,
(cid:79)(cid:68)(cid:88)(cid:81)(cid:70)(cid:75)(cid:72)(cid:71)(cid:3) (cid:68)(cid:3) (cid:81)(cid:72)(cid:90)(cid:3) (cid:86)(cid:72)(cid:85)(cid:89)(cid:76)(cid:70)(cid:72)(cid:3) (cid:82)(cid:3812)(cid:72)(cid:85)(cid:76)(cid:81)(cid:74)(cid:3) (cid:90)(cid:76)(cid:87)(cid:75)(cid:3)
Amazon. Mobile users can now enjoy
Amazon Prime video, bundled as part of
their Airtel mobile or broadband service.
(cid:55)(cid:75)(cid:72)(cid:3)(cid:68)(cid:70)(cid:87)(cid:76)(cid:89)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3)(cid:82)(cid:73)(cid:3)(cid:87)(cid:75)(cid:76)(cid:86)(cid:3)(cid:70)(cid:88)(cid:86)(cid:87)(cid:82)(cid:80)(cid:72)(cid:85)(cid:3)(cid:82)(cid:3812)(cid:72)(cid:85)(cid:3)(cid:88)(cid:86)(cid:72)(cid:86)(cid:3)
the Bango Platform to resell, maintain
and manage subscriber entitlement, and
provide valuable information to both
parties, leading to increased sales and
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(cid:41)(cid:76)(cid:81)(cid:68)(cid:79)(cid:79)(cid:92)(cid:15)(cid:3) (cid:76)(cid:81)(cid:3) (cid:68)(cid:3) (cid:86)(cid:76)(cid:74)(cid:81)(cid:76)(cid:191)(cid:70)(cid:68)(cid:81)(cid:87)(cid:3) (cid:83)(cid:82)(cid:86)(cid:87)(cid:16)(cid:92)(cid:72)(cid:68)(cid:85)(cid:3) (cid:72)(cid:81)(cid:71)(cid:3)
event, Bango announced the rapid
acceleration of
further
monetize
the Bango
Platform. The acquisition of Audiens,
the value of
its plan to
a technology provider with a Customer
Data Platform, is an opportunity for
Bango to seize the strategic value that
is increasingly being placed by the
commerce market on online payments
and
the associated data. Audiens
enables a much wider market beyond
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the value of payments data and from the
broader data attributes that merchants
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relationships with Bango.
The management skill in achieving
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Management again shows itself to be
highly capable of leading the business
to new heights, equipped to achieve
continued progress
through organic
growth and the application of the Bango
technology to new markets. I am now
looking forward to reporting on the data
opportunities provided by the Audiens
acquisition. I am looking forward to the
year ahead, during which I believe Bango
can deliver sizeable End User Spend
growth and deepen its importance in the
business of the internet.
David Sear
Chairman
3
Bango PLC | Annual Report 2017
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bangoinvestor.com
DCB for Amazon retail in Japan
Bango has enabled a new
payment method for Amazon
customers in Japan. Amazon
customers with a KDDI (au) or
NTT DOCOMO mobile phone
account can now pay
for
physical goods from Amazon.
co.jp, by charging the cost to
their mobile phone bill.
Bango expanded Direct Carrier
Billing (DCB) availability
to
include Amazon Prime and
Prime Student membership
programs a few months later.
Expanded the availability of Direct Carrier Billing for Windows Store
Bango expanded the availability of Direct Carrier Billing for
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across Europe and the USA. European launches for Windows 10
carrier billing through the Bango Platform include EE in the UK,
Base in Belgium and 3 in Italy.
In the USA, subscribers on the Verizon network can purchase
their favorite apps, games, movies, music and more from
Windows Store, across all devices running Windows 10,
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Bango PLC | Annual Report 2017
4
CEO’s statement
CEO’s statement
Bango is the platform chosen by the
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to grow their sales faster in the age
of connected commerce. Google,
Amazon, Microsoft and other
leaders are using Bango technology
to enable billions of users to make
payments quickly and conveniently.
Through its partnerships and technology,
Bango delivers unique commerce insights
derived from pooled data and shared
knowledge. Bango gives businesses
unrivalled visibility into their markets
and customers, increasing sales and
customer acquisition. Built to scale, the
Bango Platform supports the exponential
growth ambitions of its global partners.
Driving customer success with
the Bango Platform
Amazon physical goods
In June 2017, Bango broke new ground
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customers the convenience of payment
for physical goods on their mobile phone
bill.
Launching initially across all Android and
iPhone users on the Docomo and KDDI
networks in Japan, this reaches over 110
million consumers. Japan is a mobile-
centric internet culture with billions of
dollars of online purchases transacting
on mobile phones each year.
The Bango Platform can now support the
more complex technology and processes
demanded by online retailers. This
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investment
in the Bango API and
associated software over more than 3
years.
Online retailers anywhere in the world
are now able to follow Amazon’s lead and
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payment to their mobile phone bill.
Amazon Prime Video
In parallel with opening-up payments
for physical goods using the Bango
Platform,
the expansion of digital
services continues via the Bango resale
product. At the end of 2017, Bharti
Airtel, the largest mobile operator in
India began to launch Amazon Prime
Video as part of a bundled package
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with Amazon was made possible by
using the Bango Platform. As new
mobile operators integrate to the Bango
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physical and digital goods, the reach for
all merchant partners is increased.
Google Play upgrades
Mobile operators switching from an
existing connection to the Bango Platform
provide proof that Bango provides more
value than a payment processor. In the
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Middle East moved their Google Play
routes from third party providers to the
Bango Platform, to stimulate growth.
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from the tools and data that Bango
uniquely provides. An immediate uplift in
end user spend of 35% was gained, with
more than 25% increase in unique users.
Bango Boost will enable app developers
to strengthen their business with these
operators by using the benchmarking
and data insights that only Bango can
provide.
to
A key focus of Bango sales and marketing
teams in 2018 is accelerating the growth
of Google Play EUS by upgrading mobile
operators
the Bango Platform.
More than 30 mobile operators are in
discussion with Bango about the upgrade
opportunity, representing in excess of
US$3Bn of End User Spend that can be
moved to the Bango Platform and grown
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Success with mobile wallets
The Bango Platform was designed to
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emerging payment methods as they
are deployed by operators and other
payment providers. During 2017, work
continued on integrating new wallets
and payment systems to meet the needs
of merchants wanting to go beyond
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launched in Japan with AU’s wallet,
followed in November by 9mobile’s 9pay
wallet in Nigeria, which launched in
Google Play.
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bangoinvestor.com
5
Bango PLC | Annual Report 2017
CEO’s statement
zero and, therefore, additional revenue
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Acquisition of Audiens
The increasing capabilities of the Bango
Platform result in more transactions
being processed. Additional transactions
provide not only immediate commercial
value to Bango and its partners, but also
contribute to the pool of anonymized
data stored in the Bango Platform. Data
has great value to publishers, operators,
developers and other advertisers. To
market this data more quickly and
to allow partners integrated to the
Bango Platform to monetize their data
securely and at low cost, Bango acquired
Audiens. Audiens brings contracts to
sell data with the leading global Data
Management Platform’s (DMPs) and a
team with extensive experience in data
monetization.
Outlook
Bango has continued to execute on its
successful strategy of powering the
industry leaders. In 2017 the power and
versatility of the Bango Platform was
emphasized by the successful launch
of DCB for Amazon physical goods in
Japan, of Amazon Prime Video resale in
India, and continued growth for Google
Play merchants worldwide.
In 2017, for the third consecutive year,
the EUS processed through the Bango
Platform more than doubled, increasing
the power of the platform for merchants,
and attracting new business which will
power spending growth and contribute
to an increasingly valuable pool of data
in the years to come.
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of the Bango Platform even more
compelling. The more
transactions
through the Bango Platform, the better
it can increase sales for customers in
the future – due to the unique “platform
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mobile operators see from moving to
the Bango Platform is expected to drive
many legacy direct routes to move to
Bango in the coming year.
Bango will continue to invest in 2018 in
developing the commercial relationships
that can bring billions of EUS in the future.
The future of Bango as a key commerce
technology provider for the world’s most
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from both further growth in payment
processing volumes and, excitingly,
new revenue streams from the recently
expanded data monetization business.
Ray Anderson
CEO
platform
capabilities
Product development
New
added
during 2015 and 2016 to handle the
sophistication of physical goods delivery
were extensively tested and proven
during 2017, and the Bango API was
extended to support these powerful
capabilities.
its
sales
conversion
Bango released an update to Bango
Boost,
rate
improvement product, to provide Google
Play developers with valuable data that
can improve their marketing activity and
enable better collaboration with mobile
operators. Previously Bango Boost was
focused on mobile operators and people
within Google or other stores. Bango
Boost unleashes new revenue streams
for mobile operators from the developers
exploiting Google Play who could not
otherwise easily engage with the MNOs.
A team is already engaging with 20
of the top Google Play developers to
increase their sales success.
Software engineering work continues
to speed up transaction processing and
improve reliability and resilience through
innovations in the use of database and
API technology. Bango datacenters have
been tested at a sustained transaction
rate of over £5Bn/yr. The 10x headroom
means that the incremental cost to
process transactions remains close to
Bango PLC | Annual Report 2017
6
CFO’s statement
CFO’s statement
growing EUS demonstrates the strength
of the Bango Platform to handle rapidly
increasing EUS at low operational costs.
the
fees
revenue
Revenue
Bango
that
is
customers or partners pay Bango
to collect transactions through the
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incremental cost of sales and therefore
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(cid:74)(cid:85)(cid:82)(cid:86)(cid:86)(cid:3)(cid:83)(cid:85)(cid:82)(cid:191)(cid:87)(cid:17)(cid:3)
Bango has two revenue streams which
are reported on separately.
from
from EUS
Revenue generated
is
accounted for consistently with the
method
the prior year, and
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(cid:76)(cid:81)(cid:3)(cid:41)(cid:60)(cid:21)(cid:19)(cid:20)(cid:25)(cid:17)(cid:3)(cid:55)(cid:75)(cid:72)(cid:3)(cid:74)(cid:85)(cid:82)(cid:90)(cid:87)(cid:75)(cid:3)(cid:76)(cid:81)(cid:3)(cid:40)(cid:56)(cid:54)(cid:3)(cid:75)(cid:68)(cid:86)(cid:3)(cid:79)(cid:72)(cid:71)(cid:3)(cid:87)(cid:82)(cid:3)
an increase in EUS revenue. The Bango
business model is for the EUS revenue
to grow to cover all expenses and R&D
investment in the platform.
Other fees, comprising all revenue not
generated from EUS such as integration
fees, are recognized on completion of
the contracted milestones. This revenue
relates to payments by merchants or
mobile operators for upgrades to the
Bango Platform.
Bango has considered the potential
impact that IFRS 15 may have on
its revenue. Following a review, the
only impact is that the fees related to
subscription services lasting more than
one month are now spread over the
life of the subscription, in-line with the
criteria under IFRS 15. Other revenues
from digital and physical goods sales will
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Bango became EBITDA positive on a run
rate basis in November 2017.
Revenue expressed as a
percentage of EUS
Revenue expressed as a percentage of
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consistent with management’s short-
term expectations for this metric.
Bango has a range of contractual
models and pricing that link to total EUS
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content. Accordingly,
revenues can
reduce with higher EUS due to a tiered
pricing model or potential market size.
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longer report on revenue expressed as a
percentage of EUS, as revenue from the
data business will make an increasing
contribution to the total revenue.
Acquisition of Audiens S.R.L.
On 23 January 2018, Bango purchased
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End User Spend
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Spend (EUS) for the third consecutive
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growth came from existing and new
routes activated through the Bango
Platform.
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can continue to drive future EUS growth
from existing routes, new payment
routes being activated and existing
Google Play routes upgrading to the
Bango Platform. Two new migrations
in the Middle East were completed in
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Bango to successfully migrate Google
Play routes to the Bango Platform.
Partners are choosing
the Bango
Platform because the technologies that
Bango has developed, including Bango
Boost and Bango Dashboard allow
greater business understanding which
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to direct connections.
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Performance Indicator that management
uses to measure the development of
the business and the success of Bango
partners. The delivery of additional EUS
through upgrades will be a key focus of
Bango in 2018. EUS is calculated as the
total sales processed through the Bango
taxes. Bango’s
Platform, excluding
End User Spend (EUS)
300
250
200
150
100
50
0
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o
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M
7
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Bango PLC | Annual Report 2017
CFO’s statement
platform and growing EUS leading to
increased revenue, Bango will begin
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the operational costs of the business
and continued investment in product
development. As part of the post year
end acquisition of Audiens, Bango raised
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and integrate Audiens and to invest
in the development of Bango’s data
monetization technology and business.
include acquired
Intangible assets
goodwill as well as internally developed
capitalized R&D.
Intangible assets
relating to capitalized R&D increased to
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in the Bango Platform (31 December
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is amortized over 5 years with projects
assessed in relation to their individual
cash generation ability. As at 31
December 2017, there was £0.9m trade
and assets relating to BilltoMobile Inc
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(cid:82)(cid:73)(cid:3)(cid:74)(cid:82)(cid:82)(cid:71)(cid:90)(cid:76)(cid:79)(cid:79)(cid:3)(cid:11)(cid:22)(cid:20)(cid:3)(cid:39)(cid:72)(cid:70)(cid:72)(cid:80)(cid:69)(cid:72)(cid:85)(cid:3)(cid:21)(cid:19)(cid:20)(cid:25)(cid:29)(cid:3)(cid:133)(cid:20)(cid:17)(cid:21)(cid:80)(cid:12)(cid:17)(cid:3)
Total borrowings at 31 December 2017
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(cid:68)(cid:81)(cid:71)(cid:3) (cid:70)(cid:82)(cid:81)(cid:86)(cid:76)(cid:86)(cid:87)(cid:3) (cid:82)(cid:73)(cid:3) (cid:191)(cid:81)(cid:68)(cid:81)(cid:70)(cid:72)(cid:3) (cid:79)(cid:72)(cid:68)(cid:86)(cid:72)(cid:3) (cid:79)(cid:76)(cid:68)(cid:69)(cid:76)(cid:79)(cid:76)(cid:87)(cid:76)(cid:72)(cid:86)(cid:3)
used to purchase computer equipment
and software.
Going concern
As Bango continues to grow its EUS and
revenue in 2018 in line with prior year
trends, cash consumption will reduce
on a stable cost basis. With cash at the
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(cid:87)(cid:75)(cid:72)(cid:85)(cid:72)(cid:3)(cid:76)(cid:86)(cid:3)(cid:86)(cid:88)(cid:3813)(cid:70)(cid:76)(cid:72)(cid:81)(cid:87)(cid:3)(cid:70)(cid:68)(cid:86)(cid:75)(cid:3)(cid:76)(cid:81)(cid:3)(cid:83)(cid:79)(cid:68)(cid:70)(cid:72)(cid:3)(cid:87)(cid:82)(cid:3)(cid:86)(cid:72)(cid:72)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)
business through to cash breakeven and
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and support Audiens in January 2018,
ensures that the Bango cash balance
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year to ensure customers continued
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Platform.
Rachel Elias-Jones
CFO
Bango recognizes that the Google Play
market continues to be a growing and
early stage market. Most of Google
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2018) is from older, legacy routes that
are connected directly with Google or
limited to credit card users. Bango has
increased its sales and marketing team
to target this market as the potential
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on legacy routes ranges from millions
to hundreds of millions of dollars a year
per route. The largest markets are Asia
(particularly Japan and Korea) and North
America. To address these key markets,
Bango has increased its local presence.
and
impairment
Amortization
of
intangible assets in the year was £1.1m
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capitalized in prior years were deployed.
Amortization of the BilltoMobile Inc
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Depreciation for the year totaled £0.2m
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(cid:81)(cid:88)(cid:80)(cid:69)(cid:72)(cid:85)(cid:3) (cid:82)(cid:73)(cid:3) (cid:191)(cid:91)(cid:72)(cid:71)(cid:3) (cid:68)(cid:86)(cid:86)(cid:72)(cid:87)(cid:3) (cid:68)(cid:71)(cid:71)(cid:76)(cid:87)(cid:76)(cid:82)(cid:81)(cid:86)(cid:3) (cid:76)(cid:81)(cid:3) (cid:87)(cid:75)(cid:72)(cid:3)
year, and that much on the equipment is
now fully depreciated.
Share based payment costs of £0.7m
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(cid:82)(cid:3812)(cid:72)(cid:85)(cid:76)(cid:81)(cid:74)(cid:3) (cid:86)(cid:75)(cid:68)(cid:85)(cid:72)(cid:3) (cid:82)(cid:83)(cid:87)(cid:76)(cid:82)(cid:81)(cid:86)(cid:3) (cid:87)(cid:82)(cid:3) (cid:72)(cid:80)(cid:83)(cid:79)(cid:82)(cid:92)(cid:72)(cid:72)(cid:86)(cid:17)(cid:3)
The increased charge resulted from
an increase in the share volatility input
into the Black Scholes model used
to calculate the charge, which is a
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Bango share price over the year. Share
options remain one of the most valuable
components of the Bango remuneration
policy used to attract, motivate and
retain employees in a highly competitive
market. All employees, other than Non-
Executive Directors are eligible to take
part in the Bango share option scheme.
Balance sheet
Net assets at 31 December 2017 were
(cid:133)(cid:20)(cid:19)(cid:17)(cid:26)(cid:80)(cid:3)(cid:11)(cid:22)(cid:20)(cid:3)(cid:39)(cid:72)(cid:70)(cid:72)(cid:80)(cid:69)(cid:72)(cid:85)(cid:3)(cid:21)(cid:19)(cid:20)(cid:25)(cid:29)(cid:3)(cid:133)(cid:20)(cid:21)(cid:17)(cid:22)(cid:80)(cid:12)(cid:17)
Cash balances at 31 December 2017
(cid:71)(cid:72)(cid:70)(cid:85)(cid:72)(cid:68)(cid:86)(cid:72)(cid:71)(cid:3) (cid:69)(cid:92)(cid:3) (cid:133)(cid:19)(cid:17)(cid:28)(cid:80)(cid:3) (cid:87)(cid:82)(cid:3) (cid:133)(cid:23)(cid:17)(cid:27)(cid:80)(cid:3) (cid:11)(cid:68)(cid:87)(cid:3) (cid:22)(cid:20)(cid:3)
(cid:39)(cid:72)(cid:70)(cid:72)(cid:80)(cid:69)(cid:72)(cid:85)(cid:3) (cid:21)(cid:19)(cid:20)(cid:25)(cid:29)(cid:3) (cid:133)(cid:24)(cid:17)(cid:26)(cid:80)(cid:12)(cid:15)(cid:3) (cid:68)(cid:86)(cid:3) (cid:68)(cid:3) (cid:85)(cid:72)(cid:86)(cid:88)(cid:79)(cid:87)(cid:3) (cid:82)(cid:73)(cid:3)
continued investment in new products.
scalable operating
With a highly
S.p.A, for an initial consideration of
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in cash during 2018. Bango also
issued 521,803 new Bango shares to
the vendors of Audiens and 738,399
warrants over new Bango shares,
exercisable at a price of £1.80 each,
which will lapse after 10 years. Further
deferred consideration, based on the
growth of the business in the two years
post acquisition is potentially payable
to the CEO of Audiens, based upon an
option agreement for the remaining
1.55% of Audiens. Bango currently
expect this payment to be up to €0.95m.
As Bango EUS grows in 2018, the
volume of data in the Bango Platform
will increase and therefore, the revenue
from the Bango data opportunity is
expected to increase.
Administrative expenses
Administrative expenses of £5.7m
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(cid:11)(cid:41)(cid:60)(cid:21)(cid:19)(cid:20)(cid:25)(cid:29)(cid:3) (cid:133)(cid:24)(cid:17)(cid:20)(cid:80)(cid:12)(cid:3) (cid:90)(cid:72)(cid:85)(cid:72)(cid:3)
cost of processing
budget. The
transactions
Bango
the
through
Platform remained static at £2.3m
(cid:11)(cid:41)(cid:60)(cid:21)(cid:19)(cid:20)(cid:25)(cid:29)(cid:3) (cid:133)(cid:21)(cid:17)(cid:23)(cid:80)(cid:12)(cid:15)(cid:3) (cid:69)(cid:88)(cid:87)(cid:3) (cid:87)(cid:75)(cid:72)(cid:3) (cid:87)(cid:82)(cid:87)(cid:68)(cid:79)(cid:3) (cid:89)(cid:68)(cid:79)(cid:88)(cid:72)(cid:3)
of transactions more than doubled,
highlighting the huge scale and cost
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In
increase
The
administrative
in
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and development.
the second
half of 2017 Bango invested in new
to make processing of
technology
entitlement
to subscription services
that are bundled with other services
more easily available to customers. The
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India’s largest mobile operator, Bharti
Airtel, who made Amazon Prime Video
available as part of a bundled package
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EUS opportunity for this technology
(cid:76)(cid:86)(cid:3) (cid:86)(cid:76)(cid:74)(cid:81)(cid:76)(cid:191)(cid:70)(cid:68)(cid:81)(cid:87)(cid:3) (cid:68)(cid:81)(cid:71)(cid:3) (cid:87)(cid:75)(cid:72)(cid:85)(cid:72)(cid:73)(cid:82)(cid:85)(cid:72)(cid:3) (cid:37)(cid:68)(cid:81)(cid:74)(cid:82)(cid:3) (cid:90)(cid:76)(cid:79)(cid:79)(cid:3)
continue to invest in enhancement of
this technology and its marketing in
2018. Bango continues to invest in
other Research and Development (R&D)
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to ensure that the Bango Platform
remains agile to customer needs.
Bango PLC | Annual Report 2017
8
Revenue
Bango revenue is the sum of all the
fees charged across merchants. Bango
receives a fee from every transaction
through the platform which varies by
market and volume of transactions.
Key Performance Indicators (KPIs)
End User Spend (EUS)
This remains the key metric to measure
the growth and success of the Bango
Platform. It is the total value of all sales
through the Bango Platform net of VAT
or sales taxes. Bango closely monitors
EUS growth and forecasts, to ensure
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in the platform to handle massive future
volumes and temporary spikes in volume
to ensure there are no barriers to future
growth.
Cash balances
The Bango Board reviews a two year cash
forecast on a monthly basis to ensure
that Bango has appropriate resources.
As Bango is not currently generating
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is important to major stakeholders,
particularly key customers, that they
(cid:87)(cid:75)(cid:68)(cid:87)(cid:3) (cid:37)(cid:68)(cid:81)(cid:74)(cid:82)(cid:3) (cid:75)(cid:68)(cid:86)(cid:3) (cid:86)(cid:88)(cid:3813)(cid:70)(cid:76)(cid:72)(cid:81)(cid:87)(cid:3)
(cid:70)(cid:82)(cid:80)(cid:73)(cid:82)(cid:85)(cid:87)(cid:3)
resources to keep trading and investing
in
joint research and development
projects.
(cid:49)(cid:82)(cid:81)(cid:16)(cid:191)(cid:81)(cid:68)(cid:81)(cid:70)(cid:76)(cid:68)(cid:79)(cid:3)(cid:46)(cid:51)(cid:44)(cid:86)
These are monitored monthly by the
board and key management, and include
relationships with mobile operators
and leading merchants. Growing and
developing
relationships will
ensure that Bango has the contracts in
place to grow its market share and EUS.
these
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Bango is a highly scalable platform that
can handle huge additional volumes of
EUS without increasing processing costs.
With other operating costs decreasing,
and despite additional investment in
in
sales and development, growth
revenue on a highly leveraged platform
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Google Play upgrades
Viva Bahrain and Viva Kuwait are the
most recent mobile operators to migrate
their app store business to the Bango
Platform. As a result, they are able to
move back into growth by applying
Bango Boost technology to improve the
payment experience for their customers.
Developers selling through the Google
Play store in Kuwait and Bahrain will
see increased sales from Viva customers
through the Bango Boost program.
9
Bango PLC | Annual Report 2017
Strategy for growth
Strategy for growth
More sales to consumers
Bango delivers unique insights derived
from pooled data and shared knowledge
across the Bango Platform. Bango gives
businesses unrivalled visibility into their
markets and customers, which increase
sales and boost customer acquisition.
Built to scale, the Bango Platform
supports
growth
exponential
ambitions of its global partners.
the
Dive more actions with unique
data
Major stores and merchants can model
campaign performance to focus their
advertising spend to gain the highest
ROI. The acquisition of Audiens in 2018
is a key part of the Bango strategy to
build a unique, industrywide commerce
platform for global stores and merchants.
through
Win leading merchants
Major stores and merchants maximize
platform’s
coverage
universal payment capability - any
device, any content type, with any
alternative payment method to reach
the biggest possible market.
the
Proven at scale for leading online
merchants, Bango continues to onboard
and expand partnerships with leading
online merchants that want to grow
their sales faster. As more merchants
standardize on the Bango Platform
for online commerce, the value of the
for online commerce, the
platform increases for all.
platform increases for all.
Collect more data
The Bango Platform improves through
continual use by Bango partners, creating
and sharing value with every transaction
it processes. Shared across more major
stores than any other provider, the
Bango Platform has information that is
not available to other solution providers,
and cannot be captured through direct
integrations between payment providers
and merchants.
Add payment partne
Add payment partners
Payment providers gain insi
Payment providers gain insights into user
behavior to increase transaction success
and drive user engagement. The Bango
Platform is designed to support multiple
payment methods, and recent additions
of mobile wallets demonstrates the
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adds unique insights that enable the
payment providers to increase payment
route performance and boost their
revenues.
Reach more consumers
As more customers and partners adopt
the Bango Platform more transactions
are processed and analyzed by Bango
technology. Consequently the platform
powerful,
increasingly
becomes
providing unique insights that drive
revenue growth. This in turn attracts
more customers to use the Bango
Platform, which feeds a virtuous circle of
success for the Bango Platform and the
industry.
Bango PLC | Annual Report 2017
10
Principal risk and uncertainties
Principal risks and uncertainties
Financial risk management objectives and policies
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and key management personnel regularly review these risks and assess the processes and controls that have been put in place to
mitigate them.
risk and going
Liquidity
concern
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available to meet foreseeable needs
and invests in cash assets safely and
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information. Due to the nature of the
business with long term relationships
with operators and merchants, Bango
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bad debt and therefore the impact
on Bango’s liquidity is low. The Board
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(cid:72)(cid:81)(cid:86)(cid:88)(cid:85)(cid:72)(cid:3) (cid:87)(cid:75)(cid:68)(cid:87)(cid:3) (cid:87)(cid:75)(cid:72)(cid:85)(cid:72)(cid:3) (cid:76)(cid:86)(cid:3) (cid:86)(cid:88)(cid:3813)(cid:70)(cid:76)(cid:72)(cid:81)(cid:87)(cid:3) (cid:70)(cid:68)(cid:86)(cid:75)(cid:3) (cid:87)(cid:82)(cid:3)
continue to invest in the platform and
future development to meet the needs
of current and future Bango customers.
Employee retention
Bango depends on its ability to recruit and
retain people with the right experience
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into providing an excellent working
(cid:72)(cid:81)(cid:89)(cid:76)(cid:85)(cid:82)(cid:81)(cid:80)(cid:72)(cid:81)(cid:87)(cid:3) (cid:68)(cid:81)(cid:71)(cid:3) (cid:69)(cid:72)(cid:81)(cid:72)(cid:191)(cid:87)(cid:86)(cid:15)(cid:3)
(cid:76)(cid:81)(cid:70)(cid:79)(cid:88)(cid:71)(cid:76)(cid:81)(cid:74)(cid:3)
a share option scheme available to all
employees (notes 7 and 12).
Currency risk
The Bango revenue streams and the
assets of some of the Groups subsidiaries
are transacted or held in currencies
other than sterling. This results in an
inherent currency risk, partly mitigated
by sales and costs in the same country
(cid:69)(cid:72)(cid:76)(cid:81)(cid:74)(cid:3) (cid:79)(cid:68)(cid:85)(cid:74)(cid:72)(cid:79)(cid:92)(cid:3) (cid:82)(cid:3812)(cid:86)(cid:72)(cid:87)(cid:17)(cid:3) (cid:54)(cid:72)(cid:72)(cid:3) (cid:81)(cid:82)(cid:87)(cid:72)(cid:3) (cid:21)(cid:20)(cid:3) (cid:73)(cid:82)(cid:85)(cid:3)
further information. Regular reviews of
the impact of dramatic currency swings
are undertaken to plan against any
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to happen. No forward exchange or
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been used in the year.
Personal data risk
Bango processes data belonging to
customers and individuals (some of
which may be very sensitive) as part of
its business. There is a risk that such
data could become public if there were a
failure of security. The extensive testing
of Bango by its major partners as part
of ongoing supplier audits, minimization
of such data, and the unique way Bango
technology is used, gives assurance that
this risk is appropriately mitigated.
pace
Technology risk
its
is dependent on
Bango EUS
technology
with
keeping
developments in internet, mobile and
payment technology. Bango manages
this risk with a continued investment
in Research and Development (R&D),
combined with
technology
trading partners and
reviews with
that
to ensure
sector
specialists
regular
market developments are understood
and managed. Products are reviewed
regularly for signs of impairment, based
on single cash generating units and their
ability to grow revenues.
Platform risk
The Bango Platform processes huge
volumes of data, and is designed to
ensure it has capacity to process ever
growing volumes of EUS as well as short
term spikes of data. The availability and
stability of the platform is managed by
closely reviewing the performance of the
platform and stress testing the platform
to ensure that there is huge capacity to
scale.
Diversity of customers
The Bango strategy is based on a
diversity of customers which use the
Bango Platform because it can do
things that no one customer can do
themselves – because Bango serves
multiple customers. Extreme dominance
of the market by one merchant of
mobile operator could reduce the value
of Bango. Bango has secured deals with
leading stores and expects diversity of
customers and operators to continue.
Even the largest internet companies do
not monopolize the global commerce
market.
Gender of Directors and senior managers
Bango has six Directors, three identify as male, two as non-binary and one as female. There are ten other key management personnel
of which seven identify as male, two as female and one as other.
(cid:55)(cid:75)(cid:72)(cid:3)(cid:86)(cid:87)(cid:85)(cid:68)(cid:87)(cid:72)(cid:74)(cid:76)(cid:70)(cid:3)(cid:85)(cid:72)(cid:83)(cid:82)(cid:85)(cid:87)(cid:3)(cid:90)(cid:75)(cid:76)(cid:70)(cid:75)(cid:3)(cid:76)(cid:81)(cid:70)(cid:82)(cid:85)(cid:83)(cid:82)(cid:85)(cid:68)(cid:87)(cid:72)(cid:86)(cid:3)(cid:83)(cid:68)(cid:74)(cid:72)(cid:86)(cid:3)(cid:22)(cid:3)(cid:87)(cid:82)(cid:3)(cid:20)(cid:20)(cid:3)(cid:90)(cid:68)(cid:86)(cid:3)(cid:68)(cid:83)(cid:83)(cid:85)(cid:82)(cid:89)(cid:72)(cid:71)(cid:3)(cid:69)(cid:92)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:37)(cid:82)(cid:68)(cid:85)(cid:71)(cid:3)(cid:82)(cid:73)(cid:3)(cid:39)(cid:76)(cid:85)(cid:72)(cid:70)(cid:87)(cid:82)(cid:85)(cid:86)(cid:15)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:86)(cid:76)(cid:74)(cid:81)(cid:72)(cid:71)(cid:3)(cid:82)(cid:81)(cid:3)(cid:76)(cid:87)(cid:86)(cid:3)(cid:69)(cid:72)(cid:75)(cid:68)(cid:79)(cid:73)(cid:3)(cid:69)(cid:92)(cid:29)
Ray Anderson
CEO
11
Bango PLC | Annual Report 2017
Bango Platform wins ‘Most Innovative DCB Technology’ award
Bango won the award for the ‘Most
Innovative DCB Technology’ at the Global
Direct Carrier Billing Awards 2017.
award
recognizes
The
the new
technology and capabilities added to
the Bango Platform to support the many
complexities involved in the launch of
carrier billing by Amazon Japan.
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(cid:87)(cid:75)(cid:72)(cid:3)
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leadership role of the Bango Platform in
opening-up the market for carrier billing
at scale, increasing payments inclusivity
for the billions of smartphone users
around the world.
Bango Boost version 2 released
Bango Boost v2 is an evolution of
Bango Boost v1, which achieved
significant success for operators by
focusing on the causes of friction
in
Expanding
on this, Bango Boost v2 provides
stores and merchants with unique
payment
routes.
and comprehensive data analysis,
including performance benchmarking,
to enable stores and merchants to
invest in revenue growth and to
continuously improve the customer
experience.
Bango Strategy day
The Bango Strategy seminar at the end of
January 2017, highlighted the potential
for applying the Bango Platform to retail,
resale and IoT market opportunities.
The size of the overall market – 5
billion mobile phones, more than half
smartphones – is vast, but with the
possibility of transactions
between
connected
devices, the sources of
commerce will be counted
in tens of billions.
Latam and Asia expansion
activity
development
its presence and
Bango expanded
business
in
South Korea to support the growth
ambitions of key partners. Through this
expansion, Bango will increase payment
opportunities for digital, physical and
Internet of Things (IoT) services across
the region.
Further investment was made across
Latin America with key hires to its São
(cid:51)(cid:68)(cid:88)(cid:79)(cid:82)(cid:3)(cid:82)(cid:3813)(cid:70)(cid:72)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:82)(cid:83)(cid:72)(cid:81)(cid:76)(cid:81)(cid:74)(cid:3)(cid:82)(cid:73)(cid:3)(cid:68)(cid:81)(cid:3)(cid:82)(cid:3813)(cid:70)(cid:72)(cid:3)
in Bogota, Colombia.
the Bango presence
Expanding
in
these regions will support Bango store
(cid:83)(cid:68)(cid:85)(cid:87)(cid:81)(cid:72)(cid:85)(cid:86)(cid:3) (cid:76)(cid:81)(cid:3) (cid:87)(cid:75)(cid:72)(cid:3) (cid:82)(cid:81)(cid:72)(cid:3) (cid:86)(cid:76)(cid:74)(cid:81)(cid:76)(cid:191)(cid:70)(cid:68)(cid:81)(cid:87)(cid:3) (cid:85)(cid:72)(cid:74)(cid:76)(cid:82)(cid:81)(cid:3)
which is relatively undeveloped for the
global store providers.
Bango PLC | Annual Report 2017
12
Directors
Directors
Directors
Directors
Rachel is responsible for the overall
(cid:191)(cid:81)(cid:68)(cid:81)(cid:70)(cid:76)(cid:68)(cid:79)(cid:3)(cid:80)(cid:68)(cid:81)(cid:68)(cid:74)(cid:72)(cid:80)(cid:72)(cid:81)(cid:87)(cid:3)(cid:82)(cid:73)(cid:3)(cid:37)(cid:68)(cid:81)(cid:74)(cid:82)(cid:15)(cid:3)(cid:76)(cid:81)(cid:70)(cid:79)(cid:88)(cid:71)(cid:76)(cid:81)(cid:74)(cid:3)
(cid:70)(cid:82)(cid:85)(cid:83)(cid:82)(cid:85)(cid:68)(cid:87)(cid:72)(cid:3)(cid:191)(cid:81)(cid:68)(cid:81)(cid:70)(cid:76)(cid:68)(cid:79)(cid:3)(cid:73)(cid:88)(cid:81)(cid:70)(cid:87)(cid:76)(cid:82)(cid:81)(cid:86)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:3)(cid:191)(cid:81)(cid:68)(cid:81)(cid:70)(cid:76)(cid:68)(cid:79)(cid:3)
relationships with partners. The global
reach of Bango requires a wide range
(cid:82)(cid:73)(cid:3)(cid:191)(cid:81)(cid:68)(cid:81)(cid:70)(cid:76)(cid:68)(cid:79)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:87)(cid:68)(cid:91)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3)(cid:80)(cid:82)(cid:71)(cid:72)(cid:79)(cid:86)(cid:15)(cid:3)(cid:53)(cid:68)(cid:70)(cid:75)(cid:72)(cid:79)(cid:3)
ensures the smooth delivery of this
(cid:70)(cid:82)(cid:80)(cid:80)(cid:72)(cid:85)(cid:70)(cid:76)(cid:68)(cid:79)(cid:3)(cid:192)(cid:72)(cid:91)(cid:76)(cid:69)(cid:76)(cid:79)(cid:76)(cid:87)(cid:92)(cid:17)(cid:3)(cid:53)(cid:68)(cid:70)(cid:75)(cid:72)(cid:79)(cid:3)(cid:90)(cid:82)(cid:85)(cid:78)(cid:86)(cid:3)(cid:90)(cid:76)(cid:87)(cid:75)(cid:3)
Bango’s development team and key
partners on the design and implementation
of new technologies, including the
capabilities of the Bango Platform to
enable payment to be collected for any
(cid:87)(cid:92)(cid:83)(cid:72)(cid:3) (cid:82)(cid:73)(cid:3) (cid:74)(cid:82)(cid:82)(cid:71)(cid:86)(cid:17)(cid:3) (cid:36)(cid:81)(cid:3) (cid:72)(cid:91)(cid:83)(cid:72)(cid:85)(cid:76)(cid:72)(cid:81)(cid:70)(cid:72)(cid:71)(cid:3) (cid:191)(cid:81)(cid:68)(cid:81)(cid:70)(cid:72)(cid:3)
leader and Chartered Accountant, Rachel
spent 5 years in practice at PwC and Grant
Thornton, specializing in the audit of the
technology and listed sectors.
Rachel Elias-Jones
CFO
Bango
Ray has over 30 years experience in
starting, growing and selling businesses.
He was named ‘Business Person of the
(cid:60)(cid:72)(cid:68)(cid:85)(cid:182)(cid:3)(cid:76)(cid:81)(cid:3)(cid:21)(cid:19)(cid:20)(cid:21)(cid:17)(cid:3)(cid:53)(cid:68)(cid:92)(cid:3)(cid:70)(cid:82)(cid:16)(cid:73)(cid:82)(cid:88)(cid:81)(cid:71)(cid:72)(cid:71)(cid:3)(cid:37)(cid:68)(cid:81)(cid:74)(cid:82)(cid:3)(cid:76)(cid:81)(cid:3)
1999 after realizing that the convergence
of the internet with the ubiquity of mobile
phones could open up huge opportunities
for content and service providers. Prior
(cid:87)(cid:82)(cid:3) (cid:37)(cid:68)(cid:81)(cid:74)(cid:82)(cid:3) (cid:53)(cid:68)(cid:92)(cid:3) (cid:72)(cid:86)(cid:87)(cid:68)(cid:69)(cid:79)(cid:76)(cid:86)(cid:75)(cid:72)(cid:71)(cid:3) (cid:44)(cid:59)(cid:44)(cid:3) (cid:90)(cid:75)(cid:76)(cid:70)(cid:75)(cid:3)
created the industry standard network
(cid:42)(cid:56)(cid:44)(cid:3)(cid:16)(cid:3)(cid:59)(cid:17)(cid:71)(cid:72)(cid:86)(cid:78)(cid:87)(cid:82)(cid:83)(cid:17)(cid:3)(cid:44)(cid:59)(cid:44)(cid:3)(cid:90)(cid:68)(cid:86)(cid:3)(cid:68)(cid:81)(cid:3)(cid:72)(cid:68)(cid:85)(cid:79)(cid:92)(cid:3)(cid:79)(cid:72)(cid:68)(cid:71)(cid:72)(cid:85)(cid:3)
in the creation of the web. It sponsored
(cid:87)(cid:75)(cid:72)(cid:3)(cid:191)(cid:85)(cid:86)(cid:87)(cid:3)(cid:72)(cid:89)(cid:72)(cid:85)(cid:3)(cid:58)(cid:58)(cid:58)(cid:3)(cid:70)(cid:82)(cid:81)(cid:73)(cid:72)(cid:85)(cid:72)(cid:81)(cid:70)(cid:72)(cid:3)(cid:68)(cid:87)(cid:3)(cid:38)(cid:40)(cid:53)(cid:49)(cid:3)
(cid:68)(cid:81)(cid:71)(cid:3)(cid:86)(cid:75)(cid:76)(cid:83)(cid:83)(cid:72)(cid:71)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:90)(cid:82)(cid:85)(cid:79)(cid:71)(cid:182)(cid:86)(cid:3)(cid:191)(cid:85)(cid:86)(cid:87)(cid:3)(cid:70)(cid:82)(cid:80)(cid:80)(cid:72)(cid:85)(cid:70)(cid:76)(cid:68)(cid:79)(cid:3)
web browser.
Ray Anderson
CEO
Bango
between
Anil is responsible for Bango’s marketing
activities and app store partnerships,
including device makers, app store
providers and global network operators.
Anil has extensive experience of creating
partnerships
technology innovators and major market
successful
players in online technologies and OEMs.
Before co-founding Bango, Anil developed
the major partnerships for Cyberlife
Technology, one of Europe’s leading
computer games technology developers,
which resulted in the licensing of the
(cid:70)(cid:82)(cid:80)(cid:83)(cid:68)(cid:81)(cid:92)(cid:182)(cid:86)(cid:3) (cid:181)(cid:68)(cid:85)(cid:87)(cid:76)(cid:191)(cid:70)(cid:76)(cid:68)(cid:79)(cid:3) (cid:79)(cid:76)(cid:73)(cid:72)(cid:182)(cid:3) (cid:87)(cid:72)(cid:70)(cid:75)(cid:81)(cid:82)(cid:79)(cid:82)(cid:74)(cid:92)(cid:3) (cid:69)(cid:92)(cid:3)
the world’s leading games publishers
including Warner and Hasbro. Before that
he worked with Bango CEO Ray Anderson
(cid:87)(cid:82)(cid:3)(cid:72)(cid:86)(cid:87)(cid:68)(cid:69)(cid:79)(cid:76)(cid:86)(cid:75)(cid:3)(cid:68)(cid:3)(cid:87)(cid:72)(cid:70)(cid:75)(cid:81)(cid:82)(cid:79)(cid:82)(cid:74)(cid:92)(cid:3)(cid:70)(cid:68)(cid:79)(cid:79)(cid:72)(cid:71)(cid:3)(cid:59)(cid:17)(cid:71)(cid:72)(cid:86)(cid:78)(cid:87)(cid:82)(cid:83)(cid:15)(cid:3)
which became the global standard for the
user interface software on networked
computers.
Anil Malhotra
CMO
Bango
13
Bango PLC | Annual Report 2017
Directors
Directors
Directors
Directors
Gianluca is an Angel investor and pioneer
in the mobile industry. He has over 25
years’ experience of founding, growing
and investing in international mobile
content and payment businesses. In
2007 he founded Neomobile SPA. As
CEO, he grew the business organically
and via M&A to become a leading mobile
monetization enabler across Europe and
Latam. Gianluca has a Non-Executive
role on the Neomobile SPA board. Before
Neomobile, he held senior management
roles at KPMG, Freever, TIM and Telecom
Italia. He was named in the ‘Top 50 Mobile
Execs’ 2009, 2010 and 2011 and ‘Media
(cid:48)(cid:82)(cid:80)(cid:72)(cid:81)(cid:87)(cid:88)(cid:80)(cid:3)(cid:48)(cid:68)(cid:81)(cid:3)(cid:82)(cid:73)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:60)(cid:72)(cid:68)(cid:85)(cid:182)(cid:3)(cid:76)(cid:81)(cid:3)(cid:21)(cid:19)(cid:20)(cid:20)(cid:17)
Gianluca D’Agostino
Non-Executive Director
Bango
David Sear
David has been an entrepreneur and
investor in FinTech companies for the last
two decades. He is currently Chairman
(cid:82)(cid:73)(cid:3) (cid:44)(cid:59)(cid:36)(cid:53)(cid:44)(cid:54)(cid:3) (cid:11)(cid:68)(cid:3) (cid:89)(cid:76)(cid:85)(cid:87)(cid:88)(cid:68)(cid:79)(cid:3) (cid:70)(cid:68)(cid:85)(cid:71)(cid:3) (cid:76)(cid:86)(cid:86)(cid:88)(cid:72)(cid:85)(cid:12)(cid:3) (cid:68)(cid:81)(cid:71)(cid:3)
Semafone, a payments technology business
which protects consumer privacy. He is also
a non-executive Director of Fintrax Group,
a tax-free shopping and cross-border
payments business. Previously David was
Group Chief Executive of Skrill. He went to
Skrill from Weve, the joint venture between
EE, Telefonica UK (O2) and Vodafone UK,
where he was Chief Executive. Prior to that
at Travelex, the world’s largest non-bank
payments provider, he spearheaded the
global roll out of the CASH PASSPORT travel
card business and Travelex Global Business
Payments. In 1999 he was a founder of
WorldPay at the genesis of today’s FTSE
100 global payments powerhouse.
Chairman,
Non-executive Director
Bango
Martin Rigby is co-founder and CEO of
Psonar, the internet music service. He is
also founder and a managing director of
ET Capital, an early investor in Bango.
He has been investing in innovative
technology businesses for over 25 years,
principally in network services, software
and hardware. He is Non-executive
Chairman of FSE Fund Managers and an
advisory board member of the Bettany
(cid:38)(cid:72)(cid:81)(cid:87)(cid:85)(cid:72)(cid:3) (cid:73)(cid:82)(cid:85)(cid:3) (cid:40)(cid:81)(cid:87)(cid:85)(cid:72)(cid:83)(cid:85)(cid:72)(cid:81)(cid:72)(cid:88)(cid:85)(cid:86)(cid:75)(cid:76)(cid:83)(cid:3) (cid:68)(cid:87)(cid:3) (cid:38)(cid:85)(cid:68)(cid:81)(cid:191)(cid:72)(cid:79)(cid:71)(cid:3)
University.
Martin Rigby
Non-executive Director
Bango
Bango PLC | Annual Report 2017
14
Company information
Company information
Company registration number
05386079
Registered office
5 Westbrook Centre
Cambridge
CB4 1YG
Directors
D Sear - Non-executive Chairman
R Anderson - CEO
A Malhotra - CMO
R Elias-Jones – CFO
M Rigby – Non-executive Director
G D’Agostino – Non-executive Director
Company Secretary
R Greenhalgh
Bankers
Solicitors
Independent auditor
Nominated adviser and broker
Public relations advisor
US office
HSBC Bank PLC
Vitrum
St Johns' Innovation Park
Cambridge
CB4 0DS
Mills & Reeve LLP
Botanic House
100 Hills Road
Cambridge
CB2 1PH
Grant Thornton UK LLP
Chartered Accountants and Statutory Auditors
101 Cambridge Science Park
Milton Road
Cambridge
CB4 0FY
Cenkos Securities Ltd
6.7.8 Tokenhouse Yard
London
EC2R 7AS
FTI Consulting
200 Aldersgate
Aldersgate Street
London
EC1A 4HD
C/O Danal Inc
2833 Junction Avenue #202
San Jose
California
95134 USA
www.bango.com
investors@bango.com
15 Bango PLC | Annual Report 2017
Directors’ report
Directors’ report
The Directors present the Annual Report and audited financial
statements of Bango PLC for the year ended 31 December 2017.
The Directors’ report should also be read in conjunction with the
Bango Strategic report which sets out the principal risks,
uncertainties and growth opportunities for Bango.
The Directors and their interests
The Directors who served Bango during the year, together with
their beneficial interests in the shares of Bango were as follows:
R Anderson
A Malhotra
M Rigby
R Elias-Jones
G D’Agostino
D Sear
Ordinary shares
of 20p each
31 Dec 2017
6,567,260
3,976,815
176,630
4,100
37,500
-
====================
Ordinary shares
of 20p each
31 Dec 2016
6,628,949
3,986,815
176,630
4,100
37,500
-
=====================
The Directors’ biographies and experiences are shown on pages
13-14.
The Directors’ interests in share options of Bango were as
follows:
Options to buy ordinary shares of 20p each
chairman of the Bango board. This was following reviews of the
accounts by the Institutional Shareholder Service (ISS) which
suggested that non-executive Directors should not have share
options as best practice. While the Bango board does not agree
that non-executive Directors holding share options results in
Directors acting against the interests of shareholders, David
Sear agreed to relinquish his share options as an act of good
faith to shareholders.
The share options were granted to executive directors under the
Bango employee share option scheme. All share options are
granted with the same conditions. Share options are granted
only at market price on the date of the grant and vest over a
three year period in twelve equal quarterly instalments. Vested
options will lapse unless exercised within ten years of the date
of grant or within 90 days of an employee leaving the business
unless they are dismissed,
lapse
immediately.
in which case they
Martin Rigby and Gianluca D’Agostino both hold Bango shares
but due to the size of their holdings, this is deemed to not affect
their independence as non-executive directors.
Share capital
Details of changes in the share capital of Bango during the year
are given in note 7 to the financial statements.
Option
price
31 Dec
2017
31 Dec
2016
Dividends
The Directors have not recommended a dividend (31 December
2016: £nil).
Date of grant
D Sear
7 February 2011
R Anderson
22 September 2017
21 March 2017
21 September 2016
16 March 2016
18 September 2015
Total
A Malhotra
22 September 2017
21 March 2017
21 September 2016
16 March 2016
18 September 2015
Total
R Elias-Jones
22 September 2017
21 March 2017
21 September 2016
16 March 2016
18 September 2015
16 March 2015
22 October 2014
01 April 2014
4 October 2013
26 March 2013
20 September 2012
Total
£1.530
-
100,000
£2.55
£1.145
£0.89
£0.43
£0.885
£2.55
£1.145
£0.89
£0.43
£0.885
£2.55
£1.145
£0.89
£0.43
£0.885
£1.060
£1.010
£1.360
£1.260
£2.325
£1.665
50,000
50,000
50,000
50,000
32,500
232,500
50,000
50,000
50,000
50,000
32,500
232,500
50,000
50,000
50,000
100,000
20,000
20,000
20,000
20,000
12,000
8,000
7,500
357,500
-
-
50,000
50,000
32,500
132,500
-
-
50,000
50,000
32,500
132,500
-
-
50,000
100,000
20,000
20,000
20,000
20,000
12,000
8,000
7,500
257,500
Post balance sheet events
On 23 January 2018 Bango purchased 98.45% of Audiens SRL,
a subsidiary of Digitouch SRL, for a mixture of shares and
warrants in Bango PLC, cash of €1.48m and a one off fee of
€620,000 in exchange for twelve months of services to support
the transition of the business from Digitouch to Bango. Further
details of the transaction can be found in Note 22.
Research and development
Bango has continued to invest in research and development in
the year. As a high growth technology company, the focus is to
develop unique technology that takes Bango forward as the
ubiquitous payment platform for not just direct carrier billing but
all other forms of alternative payments that allow merchants to
sell more goods to consumers. Bango has increased its focus on
R&D in 2017 taking the platform forward by enabling both the
complexities of physical goods and resale to be enabled on the
Bango Platform. Further development has begun at the end of
2017 for new products that will be launched in 2018 and details
of the internal development work that has been capitalized in
the year is in Note 5.2.
Directors’ indemnity arrangements
Bango has purchased and maintained throughout the year
Directors’ and Officers’ liability insurance in respect of itself and
its Directors.
Employment policies
Bango is committed to following the applicable employment
laws in each territory in which it operates. Bango is committed
to fair employment practices including the prohibition of all
forms of discrimination and attempts as far as possible to give
equal access and fair treatment to all employees on the basis of
merit. Wherever possible Bango provides
same
opportunities for disabled people as for others. If employees
the
On March 08 2017 David Sear relinquished for nil consideration,
his 100,000 share options granted in 2011 on his acceptance of
Bango PLC | Annual Report 2017 16
Directors’ report
Directors’ report
become disabled Bango would make reasonable effort to keep
them
training where
necessary.
in employment, with appropriate
Bango supports the training needs of its staff and actively works
to provide on the job and external training to continue the
development of all staff. It is important to maintain an exciting
and interesting working environment to fully engage its staff.
Bango operates in a global business environment with rapidly
changing needs. The Bango values are Success, Personable,
Individual, Reliable, Innovation and Transparency. The Bango
annual goals are aligned to these values and reviewed on a
company wide basis at monthly all hands meetings. Following
the Bango SPIRIT values serves both employees and customers’
needs.
Health and safety policies
Bango is committed to conducting its business in a manner
which ensures high standards of health and safety for its
employees, visitors and the general public. Bango complies with
all regulatory and other applicable requirements.
Going concern
After making enquiries, at the time of approving the financial
statements, the Directors retain a reasonable expectation that
Bango has adequate resources to continue in operational
existence for the foreseeable future. The Directors expect the
current level of investing activities to continue which is
supported by the additional funding secured by the FY2018
placement to support the development of Bango Deep and
Audiens in FY2018. At 31 December 2017 Bango had cash
reserves of £4.8m (£4.5m net of debt) and based on detailed
cash flows provided to the Board within the FY2018/19 budget,
there is sufficient cash to see Bango through to profitability
based on the standard Bango operating model. Revenue is
expected to increase again in FY2018 as it did in FY2017 as a
result of expansion of the existing Bango activity and known
new business activity launched at the end of FY2018 included
in the FY2018/19 forecasts. For these reasons, the Directors
continue to adopt the going concern basis in preparing the
financial statements and to provide reasonable, but not absolute
assurance against material misstatement or loss.
Substantial shareholdings
At 31 December 2017 Bango PLC had been informed of the
following interests in addition to the interests of R Anderson and
A Malhotra, amounting to 3% or more in the issued ordinary
share capital of the company:
Liontrust Asset Management
Herald Investment Management
Odey Asset Management LLP
Hargreave Hale
Inflection Point Investments LLP
Cavendish Asset Management
Killik & Co
%
Number
10,625,363 16.00
8,876,267 13.36
6,690,000 10.07
2,948,100 4.44
2,850,139 4.29
2,616,840 3.94
2,444,307 3.68
Directors’ responsibility
The following statement, which should be read in conjunction
with both reports of the auditor set out on page 22, is made to
distinguish for shareholders the respective responsibilities of the
Directors and of the auditor in relation to the financial
statements.
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 each financial year. Under that law the Directors
have to prepare the Group financial statements in accordance
with International Financial Reporting Standards as adopted by
the European Union (IFRSs) and have elected to prepare the
parent company financial statements in accordance with IFRS.
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 and profit or loss of the
Company and the Group for that period. In preparing these
financial statements, the Directors are required to:
(cid:120)
Select suitable accounting policies and then apply
them consistently.
(cid:120) Make judgements and accounting estimates that are
reasonable and prudent.
(cid:120)
(cid:120)
State whether applicable IFRSs have been followed
subject to any material departures disclosed and
explained in the financial statements.
Prepare the financial statements on the going concern
basis unless it is inappropriate to presume that Bango
will continue in business.
The Directors are responsible for keeping adequate accounting
records that are sufficient to show and explain Bango’s
transactions and disclose with reasonable accuracy at any time
the financial position of Bango and enable them to ensure that
the financial statements comply with the Companies Act 2006.
They are also responsible for safeguarding the assets of Bango
and hence for taking reasonable steps for the prevention and
detection of fraud and other irregularities.
The Directors confirm that:
(cid:120)
(cid:120)
In so far as each Director is aware there is no
relevant audit information of which Bango’s
auditors are unaware
The Directors have taken all steps that they ought
to have taken as Directors in order to make
themselves aware of any
relevant audit
information and to establish that the auditor is
aware of that information
The Directors are responsible for the maintenance and integrity
of the corporate and financial information included on the
Group's website. Legislation in the United Kingdom governing
the preparation and dissemination of financial statements may
differ from legislation in other jurisdictions.
Auditor
The Audit Committee have decided to put the audit of Bango out
to tender in 2018, in line with best practice. The process will be
completed by the AGM in May 2018 and a resolution passed to
appoint auditors at that time.
BY ORDER OF THE BOARD
Company Secretary
R Greenhalgh
17 Bango PLC | Annual Report 2017
Corporate governance report
Corporate governance report
Communications with shareholders
The Board recognizes the importance of regular and effective
communication with shareholders. The primary
forms of
communication are:
(cid:120)
(cid:120)
(cid:120)
The annual and interim statutory financial reports and
associated investor and analyst presentations and
reports.
Announcements relating to trading or business updates
released to the London Stock Exchange.
The Annual General Meeting provides shareholders with
an opportunity to meet the Board of Directors and to ask
questions relating to the business.
financial reports, as well as accompanying
All statutory
presentations and additional independent analysts are published
on www.bangoinvestor.com and are made available on a timely
basis.
Additional Board committees
In line with best practice Bango also has a number of sub
committees to ensure good corporate governance. Separate
Remuneration and Audit Committees have held regular meetings
and are each chaired by a different Non-Executive Director with
the independent chairman in attendance. The members of these
committees are deemed to have the appropriate knowledge and
skills to complete their tasks. They may seek advice and guidance
from external parties as required.
Bango does not currently have a nominations committee, instead
this role is filled by the Non-Executive Directors, supported by the
CEO. This is in line with the QCA Code, which acknowledges that
some small and mid-size quoted companies will use the whole
Board to consider matters of nomination.
David Sear
Non-executive Chairman
The Board
The Board is responsible for the overall management of Bango, its
strategy and long-term objectives. The Board provides leadership
to Bango, based on the best interests of shareholders. The Board
has a formal list of matters specifically reserved for its decisions
and delegates authority to its various committees as required.
UK Corporate Governance Code
Bango does not comply with the UK Corporate Governance Code.
Instead, the Directors have reported on Bango’s Corporate
Governance arrangements, including those aspects of the UK
Corporate Governance Code we consider to be relevant to the
Group and best practice.
Board composition
The Board of Bango PLC is made up of the independent Non-
Executive Chairman, CEO, CFO, CMO, and two other independent
Non-Executive Directors. Details of the Board’s experience and
interests are shown on pages 13-14 which demonstrate the range
of skills and insight that they bring to the Board. It is important
that the Non-Executive Directors bring a wide range of skills to the
Bango Board in order to provide robust challenges to the Executive
Directors and
interests are
represented.
that shareholders’
to ensure
The three Non-Executive Directors are all deemed to be
independent. All Directors are subject to election by the
shareholders at the first Annual General Meeting following their
appointment, and to re-election thereafter every three years. After
nine years the Non-Executive Directors are subject to election on
an annual basis.
Board meetings
The Board meets formally 11 times per year to discuss the strategy,
direction and financial performance of the company. Other
additional Board meetings occur as required. The Board reviews a
detailed management pack each month which enables them to
fulfill all of their duties of stewardship. This management pack
contains detailed financial information as well as wider resources
on the KPIs for Bango. The Non-Executive Directors attend all of
the meetings.
Board
13 (15)
15 (15)
15 (15)
13 (15)
12 (15)
13 (15)
Audit
Committee
2 (2)
2 (2)*
2 (2)*
2 (2)*
2 (2)
2 (2)
Remuneration
Committee
2 (2)
2 (2)*
2 (2)*
2 (2)*
2 (2)
2 (2)
David Sear
Ray Anderson
Rachel Elias-Jones
Anil Malhotra
Martin Rigby
Gianluca
D’Agostino
*By invitation of the committee.
(x) Number of meetings held.
Bango PLC | Annual Report 2017 18
Audit Committee report
Audit Committee report
Composition
The Audit Committee comprises the Chairman and all other Non-
Executive Directors. The Audit Committee as in prior years is
chaired by Martin Rigby.
Responsibilities
The Audit Committee meets at least twice a year to review the
independent audit report of Bango’s auditors and the wider
responsibilities set out below:
(cid:120) Monitor the integrity of the financial statements of
(cid:120)
(cid:120)
(cid:120)
Bango.
Review Bango’s internal financial controls and risk
management systems.
Report to the Board, identifying any matters in respect of
which it considers that action or improvement is required.
Ensure a formal channel is available for employees and
other stakeholders to express any complaints in respect
of financial accounting and reporting.
External Audit
In relation to Bango’s external auditors the key responsibilities are:
(cid:120)
(cid:120) Make recommendations to the Board, for it to put to the
shareholders for their approval in relation to the
appointment of the external auditor and to approve the
remuneration and terms of reference of the external
auditor.
Discussion of the nature, extent and timing of the
external auditor’s procedures and discussion of the
external auditor’s findings.
Review and monitor the external auditor’s independence
and objectivity and the effectiveness of the audit process.
Develop and implement policy on the engagement of the
external auditor to supply non-audit services.
(cid:120)
(cid:120)
(cid:120)
(cid:120)
(cid:120)
(cid:120)
(cid:120)
(cid:120)
(cid:120)
Regular reviews by the Board and by the senior
management team of key performance indicators.
Dual authority is required for all bank payments.
Payments are not permitted without an approved invoice
signed in accordance with the Bango Delegation of
Authority document.
Reconciliations of key balance sheet accounts are
performed and independently reviewed by the finance
team. Wherever possible segregation of duties are
implemented to provide additional comfort and support
on all finance processes.
All employees must go through initial and periodic
security screening in line with requirements from Bango’s
key customers.
Appropriate physical security and virtual checks are in
place at all Bango locations to protect Bango’s assets
(fixed and intangible)..
Appropriate whistleblowing and escalation points are
established and communicated to staff to provide a safe
and secure forum for employees to escalate matters.
A disaster recovery plan and back-up system is
documented and in place.
The Board in conjunction with the Audit Committee keeps under
review Bango’s internal control system on a periodic basis. An
internal cross functional Infosec team also meets periodically to
review the controls and processes in place for Bango.
Martin Rigby
Audit Committee Chairman
It has been agreed by the Audit Committee that the audit will be
put out to tender in 2018 in line with best practice, following the
continued appointment of Grant Thornton for 13 years.
Internal Audit
Bango does not currently have an internal audit function, which
the Board considers appropriate for a Group of Bango’s size,
however this is currently under review and an internal audit
function may be added during 2018.
Internal control procedures
The Board is responsible for the Bango’s system of internal controls
and risk management, and for reviewing the effectiveness of these
systems. These systems are designed to manage, rather than
eliminate, the risk of failure to achieve business objectives.
The key features of Bango’s internal controls are described below:
(cid:120)
(cid:120)
(cid:120)
structure with
clearly defined organizational
A
appropriate delegation of authority.
The approval by the Board of a one-year budget,
including monthly income statements, balance sheets
and cash flow statements. The budget is prepared in
conjunction with senior managers to ensure targets are
feasible.
The business plan is updated on a periodic basis to take
into account the most recent forecasts. On a monthly
basis, actual results are compared to the latest forecast
and market expectations, and presented to the Board on
a timely basis.
19 Bango PLC | Annual Report 2017
Remuneration committee report
Remuneration committee report
Composition
The Remuneration Committee comprises all of the Non-Executive
Directors and is chaired by Gianluca D’Agostino. The committee
meets at least twice a year, and may meet more frequently due to
the needs of the business.
Responsibilities
The Committee’s main role and responsibilities are as follows:
(cid:120)
(cid:120)
(cid:120)
(cid:120)
To review, and determine on behalf of the Board, the
specific remuneration and incentive packages for each of
Bango’s Executive Directors.
To review, and make recommendations to the Board in
respect of the design of remuneration structures and
levels of pay and other incentives for employees of
Bango,
including share option awards and any
adjustments to the terms of share ownership and share
option schemes.
To be responsible for reporting to Bango’s shareholders
in relation to remuneration policies applicable to Bango’s
Executive Directors.
To monitor and approve the grants of all share option
schemes to employees.
The Committee may invite the CEO and CFO to attend meetings of
the Remuneration Committee. The CEO is consulted on proposals
relating to the remuneration of the CFO and of other senior
executives of the Group. The CEO and CFO are not involved in
setting their own remuneration.
The Committee may use remuneration consultants to advise it in
setting remuneration structures and policies. The Committee is
exclusively responsible for appointing such consultants and for
setting their terms of reference. In 2017 no independent
consultants were consulted, as the Committee were deemed to
have sufficient skills to determine the appropriate levels of
remuneration.
The Committee’s terms of reference are reviewed and approved by
the Board. These are available for inspection at Bango’s registered
office.
Remuneration policy
Bango’s policy on remuneration is to provide a package of benefits,
including salary, performance-related bonuses and share options,
which reward success and individual contributions to Bango’s
overall performance appropriately, while avoiding paying more
than is necessary for this purpose. In addition, the Committee
into account remuneration packages of comparable
takes
companies when making recommendations to the Board. Bango
only offers a base salary, performance related bonuses, share
options and a workplace pension to Directors.
Annual salary
Salaries are set at a level appropriate for the role and the individual
in relation to the performance of the business and the current
market rates. A review of salaries to market rates is conducted in
assessing the rates for the Executive Directors.
Bonus scheme
Performance-related elements of remuneration are designed to
align the interests of Executive Directors with those of shareholders
and accordingly are set as a significant proportion of total
remuneration. The awarding of a bonus is based upon a series of
success factors including financial and non-financial criteria. These
success factors are linked to the long-term development of Bango.
The success factors include company financial goals (such as EUS
targets and reducing LBITDA) shared by all Directors and individual
targets for each Director based on their roles and responsibility.
The board reserves the right to enforce claw back terms related to
the bonus if it is discovered that any of the terms under which the
bonus was granted change.
Share options
Bango considers that active participation in a share option plan is
an effective means of incentivizing and retaining high quality
people. The Bango employee share option scheme has been
successfully operated since 2005 and is a key benefit for all staff.
Executive Directors and employees are eligible to participate in the
scheme on completion of an agreed probationary period. The
number of options awarded to all staff is directly related to their
contribution to the future growth of Bango.
Share options are granted following a review of staff performance
by the wider leadership team, who then make recommendations
to the Committee. Share options may only be granted after
approval by the Committee and in line with the restrictions set out
under the companies share option plan. All options are granted at
the market rate at the date of grant. The options do not fully vest
for three years, if an employee or Director does not perform in
their role then their contract of employment is terminated and their
share options lapse immediately.
Further details of the option plan and outstanding options as at 31
December 2017 are given in note 7 to the financial statements.
Details of share options and shares held by Directors in Bango are
shown in the Directors’ report on page 16.
Pensions
Executive Directors may participate in the Bango defined
contribution pension scheme or chose to pay into their own private
pension scheme. In line with requirements for all employees and
following a mandatory legal increase, the pension contribution
percentage increased in the year from 1% to 2% under auto-
enrollment rules. There have been no changes to the Bango
pension policy in the year and there are no unfunded pension
contributions in the year.
Non-executive Directors are not able to participate in the Bango
pension scheme.
Service agreements
The Executive Directors have service agreements with Bango.net
Ltd. The agreements include restrictive covenants which apply
during employment and for a period of twelve months after
termination. The agreements can be terminated on twelve months’
notice in writing by either Bango or by the Executive Director.
Non–executive Directors
The remuneration of the Non-executive Directors is determined by
the Executive Directors. Their appointments can be terminated on
three months’ notice in writing by Bango.
Bango PLC | Annual Report 2017 20
Remuneration committee report
Remuneration committee report
Directors’ emoluments
Details of remuneration in respect of the Directors is as follows:
31 December 2017
R Anderson
A Malhotra
R Elias-Jones
M Rigby
G D’Agostino
D Sear
Wages and
salaries
£
150,000
140,000
126,667
22,500
22,500
55,333
-----------------
517,000
==========
Variable pay
£
56,250
48,750
-
-
-
-
-----------------
105,000
==========
Pension and
other benefits
£
2,255
3,412
2,866
-
-
-
------------------
8,533
==========
Total
£
208,505
192,162
129,533
22,500
22,500
55,333
-----------------
630,533
==========
During the year Bango was invoiced £42,000 by Fusion Mobile Value Limited, a company of which Gianluca D’Agostino is sole director.
The amount invoiced relates to consultancy work carried out by Gianluca D’Agostino in the year.
31 December 2016
R Anderson
A Malhotra
R Elias-Jones (appointed 14 March 2016)
M Rigby
G D’Agostino (appointed 18 November 2016)
D Sear
G Tucker (resigned 18 November 2016)
R Burger (resigned 18 November 2016)
Wages and
salaries
£
150,000
140,000
90,526
19,125
3,750
42,000
118,983
17,250
-----------------
581,634
==========
Variable pay
£
48,000
40,000
-
-
-
-
-
-
-----------------
88,000
==========
Pension and
other benefits
£
1,650
1,860
1,567
-
-
-
5,725
-
------------------
10,802
==========
Total
£
199,650
181,860
92,093
19,125
3,750
42,000
124,708
17,250
-----------------
680,436
==========
Gianluca D’Agostino
Remuneration Committee Chairman
21 Bango PLC | Annual Report 2017
Independent auditor’s report to the members of Bango PLC
Independent auditor’s report to the
members of Bango PLC
Opinion
Our opinion on the financial statements is unmodified
We have audited the financial statements of Bango plc (the ‘parent company’) and its subsidiaries (the ‘group’) for the year ended
31 December 2017, which comprise the Consolidated statement of financial position, the Consolidated statement of comprehensive
income, the Consolidated cash flow statement, the Consolidated statement of changes in equity, the parent company Statement of
financial position, the parent company Statement of changes in equity, the parent company Cash flow statement and notes to th e
financial statements, including a summary of significant accounting policies. The financial reporting framework that has been applied
in the preparation of the group financial statements is applicable law and International Financial Reporting Standards (IFRSs) as
adopted by the European Union and, as regards the parent company financial statements, as applied in accordance with the provisions
of the Companies Act 2006.
In our opinion:
(cid:120)
the financial statements give a true and fair view of the state of the group’s and of the parent company’s affairs as at 31
December 2017 and of the group’s loss for the year then ended;
the group financial statements have been properly prepared in accordance with IFRSs as adopted by the European Union;
the parent company financial statements have been properly prepared in accordance with IFRSs as adopted by the European
Union and as applied in accordance with the provisions of the Companies Act 2006; and
the financial statements have been prepared in accordance with the requirements of the Companies Act 2006.
(cid:120)
(cid:120)
(cid:120)
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 FRC’s Ethical Standard as applied to listed entities, 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.
Who we are reporting to
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.
Conclusions relating to going concern
We have nothing to report in respect of the following matters in relation to which the ISAs (UK) require us to report to you where:
the Directors’ use of the going concern basis of accounting in the preparation of the financial statements is not appropriate; or
(cid:120)
the Directors have not disclosed in the financial statements any identified material uncertainties that may cast significant doubt about
(cid:120)
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.
Bango PLC | Annual Report 2017 22
Independent auditor’s report to the members of Bango PLC
Independent auditor’s report to the
members of Bango PLC
Overview of our audit approach
(cid:120) Overall materiality: £177,000, which represents 5% of the group's loss before taxation;
Key audit matters were identified as the carrying value of intangible assets and the
(cid:120)
presumed risk of improper revenue recognition;
(cid:120) We audited the financial statements of Bango plc and the financial information of
Bango.net Limited and Bango Payments Limited, which accounted for 82% of the group’s
loss before taxation. For the remaining nine components, we performed targeted and
analytical audit procedures to respond to the risk of material misstatement.
Key audit matters
The graph below depicts the audit risks identified and their relative significance based on the extent of the financial statement impact
and the extent of management judgement.
High
Potential
financial
statement
impact
Low
Carrying value of
intangibles
Revenue
recognition
Capitalized
intangibles
Going
concern
Business
combinations
Employee
remuneration/
share options
Trade
payables
Trade
receivables
Low Extent of management judgement High
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial statements
of the current period and include the most significant assessed risks of material misstatement (whether or not due to fraud) that we
identified. These matters included those that had the greatest effect on: the overall audit strategy, the allocation of resources in the
audit; and directing the efforts of the engagement team. These matters were addressed in the context of our audit of the financial
statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.
23 Bango PLC | Annual Report 2017
Independent auditor’s report to the members of Bango PLC
Independent auditor’s report to the
members of Bango PLC
Key Audit Matter – Group
Carrying value of intangible assets
The group has development costs
(£4.0m), acquired intangible assets
(£0.9m) and goodwill (£1.2m).
There is the risk that the carrying value of
intangible assets exceeds the recoverable
value.
Indicators of impairment are assessed on
an annual basis, and management use
significant judgements, such as the
discount rate and timing of future cash
flows, when performing impairment
reviews.
The Directors and management consider
that there are two cash generating units
(CGUs), BilltoMobile Inc (B2M) and the
Bango.net payment platform. Revenues
from contracts acquired on the purchase
of B2M are allocated to the B2M CGU
when assessing impairment, and all
intangible assets in relation to capitalised
development costs are allocated to the
payment platform when assessing this for
impairment.
We identified a risk that development
costs are wrongly capitalised in the year,
and do not meet the criteria set out in
International Accounting Standard (IAS)
38 ‘Intangible assets’.
Due to the inherent uncertainty involved
in forecasting and discounting future cash
flows, we therefore identified the carrying
value of intangible assets as a significant
risk, which was one of the most
significant assessed risks of material
misstatement.
How the matter was addressed in the audit – Group
Our audit work included, but was not restricted to:
(cid:120) Assessing whether the accounting policy for amortisation was compliant with
IFRS as adopted by the European Union and whether the group had accounted
for amortisation in accordance with that policy, including whether it was
consistent with the prior year;
(cid:120) Recalculation of the amortisation for the year;
(cid:120) Checking the assumptions used and mathematical accuracy of the impairment
models;
(cid:120) Assessing the appropriateness of the discount rate used in the calculations by
using an auditor’s expert;
(cid:120) Testing the accuracy of management’s assumptions and inputs to their
impairment models by comparing the 2017 budgeted sales and gross profit to
the results achieved for the year;
(cid:120) Discussing and corroborating the ongoing viability of projects with relevant Group
personnel; and
(cid:120) Assessing management’s review of possible impairment of intangible assets and
challenging the basis of key assumptions used; and
(cid:120) To agree the correct capitalisation (in accordance with IAS 38), we tested a
sample of amounts capitalised as development costs during the year, split
between staff costs, consultancy costs, software and overheads.
The group's accounting policy on the capitalisation and impairment of intangible
assets is shown in notes 3.4 and 3.5 to the financial statements and related
disclosures are included in note 5.
Key observations
Our testing did not identify any material misstatements in the carrying value of the
development costs, acquired intangible assets and goodwill. We found no reason for
impairment of intangible assets or any additional factors to be considered that would
affect the carrying value of intangible assets recognised within the financial
statements and we found no material errors in calculations.
We also did not find any issues with the capitalisation of development costs in the
year.
Presumed risk of improper revenue
recognition
Under International Standard on Auditing
(UK) 240 “The Auditor’s Responsibilities
Relating to Fraud in an Audit of Financial
Statements”, there is a rebuttable
Our audit work included, but was not restricted to:
(cid:120) End user spend (EUS) has been tested by obtaining and reconciling monthly
operator analysis reports to the financial statements. We rationalised the
resultant margin by multiplying EUS by the average margin for each operator,
Bango PLC | Annual Report 2017 24
Independent auditor’s report to the members of Bango PLC
Independent auditor’s report to the
members of Bango PLC
Key Audit Matter – Group
presumed risk that revenue may be
misstated due to the improper recognition
of revenue.
Revenue is split into two streams, end
user activity (EUS) and other fees. An
area of management judgement is around
the whether the transactions should be
accounted for on an agency or principal
basis. This is assessed by management on
a contract by contract basis.
As a result of these judgements we
identified improper revenue recognition as
a significant risk, which was one of the
most significant assessed risks of material
misstatement.
How the matter was addressed in the audit – Group
each month. The margin percentages were confirmed by tracing a sample of
operators back to underlying contracts;
(cid:120) The split between agent and principal contracts was calculated, more than 99%
of the revenue is based on an agency agreements;
(cid:120) Assessing whether the accounting policy in respect of revenue recognition was
compliant with IFRS and whether the group had accounted for revenue in
accordance with that policy; and
(cid:120) We have supplemented our testing with analytical review of revenue recognised
in the year including testing of variances and ratio analysis.
The group's accounting policy on revenue recognition is shown in note 3.12 to the
financial statements and related disclosures are included in note 4.
Key observations
Our audit work did not identify any material errors in the occurrence of revenue
recognised in the year or any material instances of revenue not being recognised in
accordance with the stated accounting policy.
The proportion of revenue generated from principal agreements is now wholly
immaterial, so as a result the financial statements only disclose the margin made on
each end-user transaction.
Our application of materiality
We define materiality as the magnitude of misstatement in the financial statements that makes it probable that the economic decisions
of a reasonably knowledgeable person would be changed or influenced. We use materiality in determining the nature, timing and extent
of our audit work and in evaluating the results of that work.
Materiality was determined as follows:
Materiality measure
Financial statements as
a whole
Performance materiality
used to drive the extent
of our testing
Specific materiality
Group
£177,000, which is 5% of the
Group’s loss before taxation. This
benchmark is considered the most
appropriate because the net trading
result is a key measure used by
management and shareholders in
assessing the performance of the
business, and is a generally
accepted audit benchmark.
Materiality for the current year is
lower than the level that we
determined for the year ended 31
December 2016 to reflect the fact
that the group has reduced its loss
for the year.
75% of financial statement
materiality.
We also determine a specific level
of materiality for certain areas such
as Directors’ remuneration, related
party transactions and End User
Spend (EUS).
Parent
£159,000, which is 1% of total assets, capped at 90% of group
materiality. This benchmark is considered the most appropriate
because the parent entity holds investments in subsidiaries and
does not actively trade. A revenue or profit based benchmark is
not appropriate because the parent company is not revenue
generative and incurs minimal costs.
Materiality for the current year is lower than the level that we
determined for the year ended 31 December 2016 to reflect the
fact that, despite an increase in total assets, parent company
materiality is capped at 90% of group materiality and Group
materiality on which it is based has fallen.
75% of financial statement materiality.
We also determine a specific level of materiality for certain
areas such as Directors’ remuneration, related party
transactions and End User Spend (EUS).
25 Bango PLC | Annual Report 2017
Independent auditor’s report to the members of Bango PLC
Independent auditor’s report to the
members of Bango PLC
Communication of
misstatements to the
audit committee
£8,850 and misstatements below
that threshold that, in our view,
warrant reporting on qualitative
grounds.
£7,950 and misstatements below that threshold that, in our
view, warrant reporting on qualitative grounds.
The graph below illustrates how performance materiality interacts with our overall materiality and the tolerance for potential
uncorrected misstatements.
Overall materiality - group
Overall materiality - parent
25%
75%
Tolerance for
potential uncorrected
mistatements
Performance
materiality
25%
75%
An overview of the scope of our audit
Our audit approach was a risk-based approach founded on a thorough understanding of the group’s business, its environment and risk
profile and in particular included:
(cid:120)
evaluation by the group audit team of identified components to assess the significance of that component and to determine the
planned audit response based on a measure of materiality. Significance was determined as a percentage of the Group’s total assets,
revenues and profit before taxation;
(cid:120) we undertook an interim visit, and assessed the group’s internal processes and control environment before starting any of our year-
end procedures;
all of the UK entities, being Bango plc, Bango.net Limited and Bango Payments Limited had a full scope audit (covering 82% of the
group’s loss before taxation and 91% of the group’s revenue);
BilltoMobile, the main trading entity in the US, had a targeted review over its revenue and intangible assets to give us assu rance
over the group opinion;
all eight other overseas components were reviewed analytically to give us assurance over the group opinion;
all audit work was undertaken by the group audit team, no component auditors were involved; and
there have been no significant scope changes compared to the prior year.
(cid:120)
(cid:120)
(cid:120)
(cid:120)
(cid:120)
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 s o, 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 this regard.
Bango PLC | Annual Report 2017 26
Independent auditor’s report to the members of Bango PLC
Independent auditor’s report to the
members of Bango PLC
Our opinion on other matters prescribed by the Companies Act 2006 is unmodified
In our opinion, based on the work undertaken in the course of the audit:
(cid:120)
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.
(cid:120)
Matters on which we are required to report under the Companies Act 2006
In the light of the knowledge and understanding of the group and the parent company and its environment obtained in the course of the
audit, we have not identified material misstatements in the strategic report or the Directors’ report.
Matters on which we are required to report by exception
We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you
if, in our opinion:
(cid:120)
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
(cid:120)
certain disclosures of Directors’ remuneration specified by law are not made; or
(cid:120)
(cid:120) we have not received all the information and explanations we require for our audit.
Responsibilities of Directors for the financial statements
As explained more fully in the Directors’ responsibilities statement set out on page 17, 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
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 Financial Reporting Council’s website
at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s report.
Paul Naylor
Senior Statutory Auditor
for and on behalf of Grant Thornton UK LLP
Statutory Auditor, Chartered Accountants
Cambridge
12 March 2018
27 Bango PLC | Annual Report 2017
Consolidated statement of financial position
Consolidated statement of financial
position
ASSETS
Non-current assets
Property, plant and equipment
Intangible assets
Current assets
Trade and other receivables
Research and Development tax credits
Cash and cash equivalents
Total assets
EQUITY
Capital and reserves attributable to equity holders of the parent company
Share capital
Share premium account
Merger reserve
Other reserve
Foreign exchange revaluation reserve
Accumulated losses
Total equity
LIABILITIES
Current liabilities
Trade and other payables
Finance lease liabilities
Non-current liabilities
Finance lease liabilities
Total liabilities
Total equity and liabilities
31 Dec 2017
31 Dec 2016
Note
5
5
6
6
7
8
9
9
556,863
6,130,190
---------------------------
6,687,053
294,565
6,017,061
----------------------------
6,311,626
2,013,088
421,215
4,847,203
---------------------------
7,281,506
---------------------------
13,968,559
1,821,796
318,857
5,696,517
----------------------------
7,837,170
----------------------------
14,148,796
================ ================
13,284,561
31,248,453
1,236,225
2,350,701
78,318
(37,474,820)
13,029,124
30,323,341
1,236,225
2,211,136
135,187
(34,579,125)
---------------------------
10,723,438
-----------------------------
12,355,888
================ ================
2,967,538
99,889
---------------------------
3,067,427
1,697,354
82,149
-----------------------------
1,779,503
177,694
---------------------------
177,694
13,405
-----------------------------
13,405
3,245,121
1,792,908
---------------------------
13,968,559
----------------------------
14,148,796
=============== ===============
These financial statements were approved by the Directors on 12 March 2018 and are signed on their behalf by:
R Anderson R Elias-Jones
Director Director
Company registration number 05386079
The notes on pages 32 to 58 are an integral part of these consolidated financial statements.
Bango PLC | Annual Report 2017 28
Consolidated statement of comprehensive income
Consolidated statement of
comprehensive income
Alternative performance measure (Non-IFRS)
End User Spend
Note
31 Dec 2017
£
31 Dec 2016
£
4
271,356,080
132,290,981
Revenue
Cost of sales
Gross profit
Other administrative expenses
Non-recurring items
Share based payments
Depreciation
Amortization and impairment
Total administrative expenses
Operating loss
Interest payable
Investment income
Loss before taxation
Income tax
Loss for the financial year
Other comprehensive Income
Foreign exchange on consolidation
Loss and total comprehensive loss for the financial year
4
4
10
11
10
5
5
11
14
15
4,151,939
(2,439)
2,624,187
(7,054)
------------------------------ ------------------------------
2,617,133
4,149,500
(5,717,516)
(59,463)
(679,023)
(188,496)
(1,396,541)
(5,039,873)
(376,013)
(359,373)
(319,284)
(1,150,822)
------------------------------ ------------------------------
(7,245,365)
------------------------------ ------------------------------
(8,041,039)
(3,891,539)
(4,628,232)
(51,458)
20,858
(53,661)
30,363
------------------------------ ------------------------------
(4,651,530)
(3,922,139)
486,986
238,413
------------------------------ ------------------------------
(4,413,117)
(3,435,153)
(56,869)
135,187
================ ================
(4,277,930)
================ ================
(3,492,022)
Loss per share attributable to the equity holders of the parent
Basic loss per share
Diluted loss per share
16
16
(5.22)
(5.22)
(6.81)
(6.81)
All of the activities of the Group are classed as continuing.
The notes on pages 32 to 58 are an integral part of these consolidated financial statements
29 Bango PLC | Annual Report 2017
Consolidated cashflow statement
Consolidated cash flow statement
Note
31 Dec 2017
£
31 Dec 2016
£
Net cash used by operating activities
17
(253,675)
(2,646,857)
Cash flows used by investing activities
Purchases of property, plant and equipment
Addition to intangible assets
Interest received
Net cash used by investing activities
Cash flows generated from financing activities
Proceeds from issuance of ordinary shares
Costs associated with issuance of ordinary shares
Interest payable
Capital payable on finance lease obligations
Capital received on finance lease obligations
Net cash (used)/generated from financing activities
Net (decrease)/increase in cash and cash equivalents
Cash and cash equivalents at beginning of year
Exchange differences on cash and cash equivalents
Cash and cash equivalents at end of year
(450,794)
(1,509,670)
20,858
-----------------------------
(1,939,606)
(106,554)
(3,425,134)
30,363
-----------------------------
(3,501,325)
1,180,549
-
(51,458)
(89,571)
271,600
----------------------------
1,311,120
85,948
(2,668)
(53,661)
(268,466)
-
----------------------------
(238,847)
-----------------------------
(882,161)
-----------------------------
(6,387,029)
5,696,517
32,847
-----------------------------
5,729,364
----------------------------
4,847,203
12,135,326
(51,780)
-----------------------------
12,083,546
----------------------------
5,696,517
================ ================
The notes on pages 32 to 58 are an integral part of these consolidated financial statements
Bango PLC | Annual Report 2017 30
Consolidated statement of changes in equity
Consolidated statement of changes in
equity
Share
Capital
£
Share
Premium
account
£
Merger
reserve
Other
reserve
FER reserve
Retained
Earning
Total
£
£
£
£
£
12,886,350
30,101,510
1,236,225
1,896,842
-
(30,211,087)
15,909,840
-
-
-
-
25,555
60,393
117,219
-
142,774
164,106
(2,668)
221,831
-
-
-
-
-
-
359,373
(45,079)
-
-
-
314,294
-
-
-
-
-
-
-
45,079
359,373
-
-
85,948
-
-
45,079
281,325
(2,668)
723,978
----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
(4,413,117)
(4,413,117)
-
-
-
-
-
-
-
-
-
-
-
-
-
135,187
-
135,187
135,187
(4,413,117)
(4,277,930)
====================================================================================================================================================================================================================================
13,029,124
30,323,341
1,236,225
2,211,136
135,187
(34,579,125)
12,355,888
===================================================================================================================================================================================================================================
Share
Capital
£
Share
Premium
account
£
Merger
reserve
Other
reserve
FER reserve
Retained
Earning
Total
£
£
£
£
£
13,029,124
30,323,341
1,236,225
2,211,136
135,187
(34,579,125)
12,355,888
-
-
-
-
255,437
925,112
255,437
925,112
-
-
-
-
679,023
(539,458)
-
139,565
-
-
-
-
-
539,458
679,023
-
-
1,180,549
539,458
1,859,572
---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
(3,435,153)
(3,435,153)
-
-
-
-
-
-
-
-
-
-
-
-
-
(56,869)
-
(56,869)
(56,869)
(3,435,153)
(3,492,022)
===================================================================================================================================================================================================================================
10,723,438
2,350,701
13,284,561
(37,474,820)
31,248,453
1,236,225
78,318
===================================================================================================================================================================================================================================
Balance at 1 January
2016
Share based payments
Share based payments
transfer for exercised
share options
Exercise of share
options
Issue of new shares
Expense of share issue
Transactions with
owners
Loss for the year
Other comprehensive
income
Foreign exchange on
consolidation
Total comprehensive
income for the year
Balance at 31
December 16
Balance at 1 January
2017
Share based payments
Share based payments
transfer for exercised
share options
Exercise of share
options
Transactions with
owners
Loss for the year
Other comprehensive
income
Foreign exchange on
consolidation
Total comprehensive
income for the year
Balance at 31
December 17
The notes on pages 32 to 58 are an integral part of these consolidated financial statements.
31 Bango PLC | Annual Report 2017
Notes to the financial statements
Notes to the financial statements
1 General information
Bango PLC (“the Company”) was incorporated on 8 March 2005
in the United Kingdom. Bango PLC is domiciled in the United
Kingdom. The address of the registered office of the Company,
which is also its principal place of business, is given on page 15.
Bango PLC’s shares are listed on the Alternative Investment
Market of the London Stock Exchange ("AIM").
The principal activity of Bango during the year was the
development, marketing and sale of technology to enable
mobile phone users to easily make payments for goods and
services on connected devices.
The financial statements for the year ended 31 December 2017
(including the comparatives for the year ended 31 December
2016) were approved by the Board of Directors on 12 March
2018.
2 Basis of preparation
The Group financial statements, which consolidate those of
Bango PLC and all of its subsidiaries, have been prepared under
the historical cost convention and under the basis of going
concern.
Bango has prepared its Report and accounts for the year ended
31 December 2017, in accordance with International Financial
Reporting Standards (“IFRS”) as adopted in the European Union
and as applied in accordance with the provisions of the
Companies Act 2006. IFRS requires the use of certain critical
accounting estimates. It also requires management to exercise
its judgement in the process of applying the Group’s and
Company’s accounting policies. The areas involving a high
degree of
judgement or complexity, or areas where
assumptions and estimates are significant to the consolidated
financial statements are disclosed in note 3.20.
These financial statements are presented in pounds sterling
(GBP) because that is the presentation currency of Bango. Every
entity within the group has its own functional currency. The
Brazilian, Japanese, Spanish, Nigerian and US subsidiaries,
perform sales and support functions in country for services
provided by Bango.net Limited to customers. The local ledgers
and accounts are prepared in accordance with local accounting
standards. The majority of the groups costs are incurred in
sterling, and cash is mostly held in sterling. Foreign operations
are included in accordance with the policies set out in notes
3.15.
2.1 Going concern
Bango had cash of £4.8m at 31 December 2017 (31 December
2016: £5.7m) and financing debt of £0.3m (31 December 2016:
£0.1m). The cash flow forecasts of Bango anticipate increased
cash generation in the future, from current trading operations
as a result of our deals with merchants. For this reason, the
going concern basis has continued to be adopted in the
preparation of the financial statements.
A fundraise was carried out in January 2018, generating cash
for further development (see Directors Report for detailed
disclosure).
3 Principal accounting policies
The principal accounting policies applied in the preparation of
these consolidated financial statements are set out below.
3.1 Basis of consolidation
On 9 June 2005 Bango PLC acquired the entire issued share
capital of Bango.net Limited by way of a share for share
exchange. As the shareholders were the same before and after
this transaction, the share for share exchange qualifies as a
common control transaction and falls outside of the scope of
IFRS 3, Business Combinations.
No goodwill has been recorded and the difference between the
parent company's cost of investment and Bango.net Limited's
share capital and share premium is presented as a merger
reserve within equity on consolidation.
The consolidated financial statements incorporate the financial
statements of Bango PLC and all entities controlled by it after
eliminating internal transactions. Control is achieved where the
Group has the power to govern the financial and operating
policies of a Group undertaking so as to obtain economic
benefits from its activities. Subsidiary undertakings’ results are
adjusted, where appropriate, to conform to Group accounting
policies.
3.2 Property, plant and equipment
Property, plant and equipment are stated at historical cost less
accumulated depreciation. Residual values and useful economic
lives are assessed annually. Depreciation is provided to write off
the cost of all property, plant and equipment to its residual value
on a straight-line basis over its expected useful economic lives,
which are as follows:
Leasehold improvements 20% straight-line
Office equipment 20% straight-line
Computer equipment 33.3% straight-line
Property plant and equipment also include computer equipment
held under finance leases.
3.3 Intangible assets
Intangible assets are measured initially at historical cost and are
amortized on a straight-line basis over the expected useful
economic lives:
Domain names 33.3% straight-line
Internal development 20% straight-line
3.3.1 Goodwill
Goodwill is the difference between the amount by which the fair
value of the cost of a business combination exceeds the fair
value of net assets acquired. Goodwill is not amortized and is
stated at cost less any accumulated impairment losses. The
goodwill is tested for impairment annually or when events would
indicate that it might be impaired. Impairment charges are
deducted from the carrying value and recognized immediately
in profit or loss. For the purpose of impairment testing, goodwill
is allocated to the trade and assets acquired. An impairment loss
recognized for goodwill is not reversed in a subsequent period.
3.3.2 Acquisition related intangible assets
Net assets acquired as part of a business combination includes
an assessment of the fair value of separately identifiable
acquisition related intangible assets, in addition to other assets
and contingent liabilities purchased. These are amortized over
their useful lives which are individually assessed. The estimated
useful economic life for customer contracts and relationships is
10 years.
Bango PLC | Annual Report 2017 32
Notes to the financial statements
Notes to the financial statements
3.4 Research and development
Expenditure on research activities is recognized as an expense
in the period in which it is incurred. An internally-generated
intangible asset arising from Bango's development activities is
recognized only if all of the following conditions are met:
(cid:120)
(cid:120)
(cid:120)
(cid:120)
(cid:120)
(cid:120)
Completion of the intangible asset is technically
feasible so that it will be available for use or sale.
Bango intends to complete the intangible asset and
use or sell it.
Bango has the ability to use or sell the intangible
asset.
The intangible asset will generate probable future
economic benefits. Among other things, this requires
that there is a market for the output from the
intangible asset or for the intangible asset itself, or, if
it is to be used internally, the asset will be used in
generating such benefits.
There are adequate technical, financial and other
resources to complete the development and to use or
sell the intangible asset.
The expenditure attributable to the intangible asset
during its development can be measured reliably.
Internally-generated intangible assets are amortized on a
straight-line basis over their useful economic lives. Where no
internally-generated
intangible asset can be recognized,
development expenditure is recognized as an expense in the
period in which it is incurred.
The cost of an internally generated intangible asset comprises
all directly attributable costs necessary to create, produce and
prepare the intangible asset to be capable of operating in the
manner intended by management. Directly attributable costs
comprise employee salary and other employment costs
incurred, on a time apportioned basis, as well as a proportion
of attributable overhead costs. These costs are recognized as
intangible assets. Development costs previously recognized as
an expense are not included in the amount recognized as an
asset. Until completion of the project, these assets are subject
to impairment testing only. Amortization commences upon
completion of the asset, and is shown within administrative
expenses in the statement of comprehensive income.
3.5 Impairment of property, plant and equipment and
intangible assets
At each balance sheet date, Bango reviews the carrying
amounts of its property, plant and equipment and individual
intangible assets for 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 the impairment loss, if any. The
recoverable amount is the higher of the fair value less costs to
sell and value in use. Until completion of the development
project, when amortization can be charged on the intangible
asset, the assets are subject to an annual impairment test.
3.6 Loans and receivables
a) Cash and cash equivalents
Cash and cash equivalents comprise cash in hand and bank
deposits available on demand, together with other short term
highly liquid investments.
b) Trade and other receivables
Trade and other receivables are recognized initially at fair value
and are measured subsequent to initial recognition net of any
provision for impairment. Any change in their value through
impairment or reversal of impairment is recognized in profit or
loss.
Provision against trade receivables is made when there is
objective evidence that Bango will not be able to collect all
amounts due to it in accordance with the original terms of those
receivables. The amount of the write-down is determined as the
difference between the asset's carrying amount and the present
value of the estimated receivable.
3.7 Trade and other payables
Trade and other payables are initially measured at fair value,
and are subsequently measured at amortized cost, using the
effective interest rate method.
3.8 Income taxes
Current income tax liabilities comprise those obligations to fiscal
authorities relating to the current or prior reporting period, that
are unpaid at the balance sheet date. They are calculated
according to the tax rates and tax laws applicable to the fiscal
periods to which they relate, based on the taxable profit for the
year. All changes to current tax assets or liabilities are
recognized as a component of tax expense in the income
statement, except where it relates to items recognized outside
profit or loss.
Deferred income taxes are calculated using the liability method
on temporary differences. This involves the comparison of the
carrying amounts of assets and liabilities in the consolidated
financial statements with their respective tax bases. In addition,
tax losses available to be carried forward as well as other
income tax credits are assessed for recognition as deferred tax
assets. However, deferred tax is not provided on the initial
recognition of goodwill, nor on the initial recognition of an asset
or liability unless the related transaction is a business
combination or affects tax or accounting profit. Deferred tax on
temporary differences associated with shares in subsidiaries and
joint ventures is not provided if reversal of these temporary
differences can be controlled by Bango and it is probable that
reversal will not occur in the foreseeable future. In addition, tax
losses available to be carried forward as well as other income
tax credits to Bango are assessed for recognition as deferred
tax assets.
Deferred tax liabilities are always provided for in full. Deferred
tax assets are recognized to the extent that it is probable that
the underlying deductible temporary differences will be able to
be offset against future taxable income. Deferred tax assets and
liabilities are calculated, without discounting, at tax rates that
are expected to apply to their respective period of realization,
provided they are enacted or substantively enacted at the
balance sheet date.
Deferred tax is recognized as a component of tax expense in
the income statement, except where it relates to items charged
or credited directly to other comprehensive income, when it is
recognized in other comprehensive income. Deferred tax
relating to items recognized directly in equity is recognized
directly in equity.
3.9 Operating lease agreements
Rentals applicable to operating leases where the risks and
rewards of ownership are not transferred are charged to profit
or loss net of any incentives received from the lessor on a
straight-line basis over the period of the lease. When IFRS 16 is
adopted the operating leases of Bango, disclosed in note 9, will
become recognized on the statement of financial position.
33 Bango PLC | Annual Report 2017
Notes to the financial statements
Notes to the financial statements
3.10 Finance lease agreements
all of the risks and rewards of ownership are classified as finance
leases. On initial recognition, the leased asset is measured at an
amount equal to the lower of its fair value and the present value
of minimum lease payments.
Minimum lease payments made under finance leases are
apportioned between the financial expense and the reduction of
the outstanding liability. The finance expense is allocated to
each period during the lease term so as to produce a constant
periodic rate of interest on the remaining balance of the liability.
3.11 End User Spend
End User Spend (EUS) is the total value of sales processed
through the Bango Platform net of taxes. EUS shows the growth
of business through the Bango Platform, and is the most
significant Key Performance Indicator that management uses to
measure the development of the business and the success of
Bango partners.
is
reported on
This
the consolidated statement of
comprehensive income as a non IFRS KPI and in Note 4 on
revenue as EUS is directly linked to Bango’s revenue.
3.12 Revenue recognition
Revenue is measured by reference to the fair value of
consideration receivable by Bango for services provided,
excluding taxes. There are two separable revenue streams in
Bango.
3.12.1 Revenue linked to End user activity
Bango revenue is a mixture of agency and principal models:
(cid:120)
(cid:120)
Agency model – where Bango is not the merchant of
record
Principal model – where Bango is the merchant of
record, buying and reselling the content to end users
The proportion of business that is principal model is now
immaterial in comparison to the agency model business,
therefore Bango only reports its margin from every transaction
through the Platform, regardless of commercial model, as
revenue.
Bango revenue is the fee from each transaction through the
Bango Platform. It does not reflect the different commercial
models. Bango receives a fee for every transaction through the
Bango Platform, so growing EUS leads to increased revenue.
3.12.2 Other fees
Revenue from other fees relates to all revenue not generated
from EUS, such as one off connection or support fees:
•
Connection fees – where Bango charges the payment
provider or the merchant for connecting to the Bango Platform.
Revenue is recognized when certain stages of completion are
reached, including signing of commercials, delivery of technical
design and activation of routes.
(cid:120)
services which are recognised at point of invoice.
Support fees – where Bango provides monthly
Other fees are additive to the Bango revenue, but the internal
forecasts of the business are based on their being sufficient EUS
revenue to cover the operating costs of the business.
3.13 Employee benefits
All accumulating employee-compensated absences that are
Assets held under leases which transfer to Bango substantially
unused at the balance sheet date are recognized as a liability.
Payments to defined contribution retirement benefit schemes
are charged as an expense in the period to which they relate.
3.14 Share-based payment transactions
Bango issues equity settled share-based compensation to
certain employees (including Directors). Equity settled share
based payments are measured at fair value at the date of grant.
The fair value determined at the grant date of the equity-settled
share-based payment is expensed on a straight-line basis over
the vesting period, together with a corresponding increase in
equity, based upon the estimate of the shares that will
eventually vest. These estimates are subsequently revised if
there is any indication that the number of options expected to
vest differs from previous estimates. Any cumulative adjustment
prior to vesting is recognized in the current period. No
adjustment is made to any expense recognized in prior periods.
Fair value is measured by an external valuer using the Black-
Scholes option pricing model. The expected life used in the
model has been adjusted, based on management’s best
estimate, for the effects of non-transferability, exercise
restrictions and behavioral considerations. No adjustment is
made for performance conditions as these do not form a
condition of the option agreement.
If the terms of an equity-settled transaction were to be
modified, as a minimum an expense is recognized as if the terms
had not been modified. In addition, an expense would be
recognized for any increase in the value of the transaction as a
result of the modification, as measured by the date of
modification, over the remaining vesting period. To date Bango
has not modified any equity-settled transactions.
Where an equity-settled transaction is cancelled, it is treated as
if it had vested on the due date of the cancellation, and any
expense not yet recognized for the transaction is recognized
immediately. However, if a new transaction is substituted for
the cancelled transaction, and designated as a replacement
transaction on the date that it is granted, the cancelled and new
transactions are treated as if they were a modification of the
original transaction, as described in the previous paragraph.
Once exercised, the share based payment expense previously
recognized is transferred from Other reserves to Retained
transactions are shown
earnings. Share-based payment
separately
income.
Additional information is provided in note 7.
in the statement of comprehensive
3.15 Foreign currencies
Monetary assets and liabilities in foreign currencies are
translated into sterling at the rates of exchange prevailing at the
balance sheet date. Transactions in foreign currencies are
translated into sterling at the rate of exchange prevailing at the
date of the transaction. Exchange gains and losses are included
in the profit or loss for the period.
3.16 Segment reporting
In identifying Bango operating segments the chief operating
decision maker reviews two service lines. These are the
provision of a mobile payment platform allowing end users to
purchase goods and services, and the provision of services to
digital merchants and other organizations. The revenue
generated from each of these segments is separately reported
but where costs and assets are managed and utilized on a group
basis, these are not allocated to a segment.
Bango PLC | Annual Report 2017 34
Notes to the financial statements
Notes to the financial statements
3.17 Financial instruments
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 entity after
deducting all of its financial liabilities.
Where the contractual obligations of financial instruments
(including share capital) are equivalent to a similar debt
instrument, those financial instruments are classed as financial
liabilities. Financial liabilities are presented as such in the
balance sheet. Finance costs and gains or losses relating to
financial liabilities are included in profit or loss. Finance costs
are calculated so as to produce a constant rate of return on the
outstanding liability.
Where the contractual terms of share capital do not have any
terms meeting the definition of a financial liability then this is
classed as an equity instrument.
Dividends and distributions relating to equity instruments are
debited direct to equity. Interest income and expenses are
reported on an accrual basis using the effective interest method.
3.18 Share capital and reserves
Share capital
Ordinary shares are classified as equity. Equity instruments
issued by Bango PLC are recorded at the proceeds received, net
of direct issue costs.
Share premium
Share premium represents the excess over nominal value of the
fair value of consideration received for equity shares, net of
expenses of the share issue.
Merger reserve
The merger reserve represents the difference between Bango
PLC’s cost of investment and a subsidiary’s share capital and
share premium where a group reorganization qualifies as a
common control transaction.
Other reserve
The other reserve represents equity-settled share-based
employee remuneration recognized over the vesting period.
Foreign exchange reserve
The foreign exchange reserve represents translation differences
arising from the translation of the Bango subsidiaries financial
statements which are held
into the
consolidated Bango accounts which is reported in GBP. This
reserve only arises at consolidation.
local currency
in
Retained earnings
Retained earnings include all current and prior period retained
profits.
3.19 Non-recurring items
Non-recurring items are those significant items which are
disclosed by virtue of their size of incidence to enable a full
understanding of the financial performance (note 11b).
3.20 Significant accounting estimates and judgements
Revenue recognition
As discussed in policy note 3.12 there are a number of key
judgements taken by management in determining the most
appropriate presentation of revenues generated from services
to end users. The Directors consider the principal model
element to be immaterial for the current and prior year.
Deferred tax
A deferred tax asset is recognized where Bango considers it
probable that a tax credit will be received in the future. This
specifically applies to tax losses and to outstanding vested share
options at the balance sheet date. No deferred tax asset is
currently being recognized due to the unpredictability of future
taxable trading profits from which these differences may be
deducted (note 15).
Finance leases
Judgement is applied when considering the substance of a lease
agreement and whether it should be recognized as either a
finance lease or an operating lease. Management use the
following criteria in reviewing the contract to determine the
classification; rights to the asset at the end of the lease term,
the present value of the minimum lease payments in relation to
the asset’s fair value, length of the lease term in relation to the
useful economic life of the asset and the obligations to insure
and maintain the asset.
During previous years the group has entered into a number of
computer equipment leases that it has deemed to be a finance
lease based on the assessment of the key criteria. The carrying
value of finance leases at 31 December 2017 is £277,583 (2016:
£95,544).
Development costs
Judgement is applied when deciding whether the recognition
requirements for development costs have been met, based on
the information available at each balance sheet date. The
economic success of any product development is uncertain at
the time of recognition as it may be subject to future technical
problems and therefore impairment reviews are completed for
each project on the balance sheet date. The carrying value of
(2016:
costs
capitalized development
£3,638,080).
is £4,031,919
At the end of 2017 one project was partially impaired, due to
R&D work superseding previous work done. No other
impairments have been recognized based on expected future
revenues.
Acquisition accounting
Acquired assets are accounted for in accordance with IFRS3
Business Combinations following a detailed review of the fair
value of the assets by an independent third party. The business
separates out the underlying assets which include software,
customer relationships and trade names based on the
attributable values that can be apportioned directly to them, and
the remaining difference in the value is shown as goodwill. The
acquired assets are amortized over a five-year period, goodwill
is not amortized. All acquired assets are tested annually for
impairment.
No impairment is recognized based on current estimates of
future revenue streams expected to be derived from acquired
assets.
3.21 Standards and interpretations not yet applied by
the Group
For the purpose of the preparation of these consolidated
financial statements, the Group has applied all standards and
interpretations that are effective for accounting periods
beginning on or after 1 January 2017. There was no impact on
the presentation of financial statements of Bango PLC other
than in disclosure. No new standards, amendments or
interpretations to existing standards that have been published
35 Bango PLC | Annual Report 2017
Notes to the financial statements
Notes to the financial statements
and that are mandatory for the Group’s accounting periods
beginning on or after 1 January 2017, or later periods, have
been adopted early. The following new Standards and
Interpretations, which are yet to become mandatory, have not
been applied in the Bango’s financial statements.
IFRS 15 has not yet been implemented, however Bango has
considered the potential impact of implementing the new
standard on future accounting of revenue. Criteria considered
have included the contract, the nature of the service, the
timescales for delivery and the length of the service. The two
revenue streams – EUS and other fees – have been considered
separately.
It is considered suitable that Bango continue to recognize EUS
revenue at the point in time that the transaction is completed.
For digital goods this is at either the point of purchase or
enablement. For retail goods the revenue is recognized when
the goods are dispatched to the consumer.
For most transactions Bango is not the seller of record, has not
produced the goods and is not responsible for the customer
support. Bango has the performance obligation to make sure
that the Bango Platform, that enables payment processing or
subscription to take place and be accounted for, is available.
Other fees relate to merchants remaining connected to the
Bango Platform. The fees are charged monthly to connect to the
Bango Platform. There are no direct costs associated to the
revenue, therefore it is deemed appropriate to recognize the
monthly fee each month in line with invoicing.
For the contracts that Bango currently has, IFRS 15 is expected
to have no quantitative impact, however a more detailed
assessment will be conducted before adoption at 30 June 2018.
IFRS 16 Leases (IASB effective date 1 January 2019) will bring
all operating leases onto the balance sheet in line with the
accounting treatment for finance leases. This will bring the lease
of Bango’s Cambridge office on to the statement of financial
position, but it is not expected to have a material impact on the
income statement.
IFRS 9 Financial Instruments (effective date 1 January 2018)
will not have a material impact on the financial statements.
The above standards and interpretations are not expected to
have any significant impact on the financial statements when
applied, except for additional disclosures when the relevant
standard comes into effect.
3.22 Related party transactions
Bango’s related parties
its Directors and key
include
management personnel. Unless otherwise stated, none of the
transactions incorporate special terms and conditions and no
guarantees were given or received. Outstanding balances are
settled in cash.
The only transactions with Directors are noted in the Directors
remuneration note in the accounts, see note 13. There was
minimal trading in the year with Fusion Mobile Value Ltd whose
Board includes some of the Directors of Bango PLC.
Bango PLC | Annual Report 2017 36
Notes to the financial statements
Notes to the financial statements
4 Segment reporting
(a) End User Spend
As a non IFRS alternative performance measure, Bango has identified EUS as its key performance indicator on which all management
decisions surrounding investment in the platform and development of intangible assets are based. Key business decisions are based on
the total value and volume of transactions that Bango has processed in each month through its payment platform. Therefore, to give
additional information to key stakeholders of Bango and to assist users of these financial statements, Bango includes this additional
reporting.
31 December
2017
£
31 December
2016
£
End User Spend
271,356,080
132,290,981
(b) Revenue and gross profit
Bango, based on the information reviewed by the chief operating decision maker, identifies two operating segments. Management
reporting is based principally on the type of customer and strategic decisions are made on the basis of the gross profit generated from
each segment. The segments are not separately managed and therefore Bango’s operations and its research and development activity
are considered group operations and are not allocated to any operating segment. Segment information can be analyzed as fo llows for
the reporting periods under review.
12 months to 31 December 2017
End user
activity
£
Segment revenue
Cost of sales – payment providers
4,080,987
(2,439)
Other
fees
£
70,952
-
Group
Total
£
-
-
£
4,151,939
(2,439)
Segment gross profit
4,078,548
70,952
-
4,149,500
------------------------------- ------------------------------- ------------------------------- -------------------------------
Administrative expenses
Non-recurring items
Share based payments charge
Depreciation
Amortization and impairment
Interest payable
Interest income
Segment net profit/ (loss)
-
-
-
-
-
-
-
------------------------------- ------------------------------- ------------------------------- -------------------------------
(5,717,516)
(59,463)
(679,023)
(188,496)
(1,396,541)
(51,458)
20,858
------------------------------- ------------------------------- ------------------------------- ------------------------------
(3,922,139)
================== ================ ================ ================
(5,717,516)
(59,463)
(679,023)
(188,496)
(1,396,541)
(51,458)
20,858
(8,071,639)
-
-
-
-
-
-
-
4,078,548
70,952
Segment assets
1,451,542
-
12,517,017
13,968,559
Segment liabilities
Net assets
(2,479,707)
(3,245,121)
-
--------------------------------- ------------------------------ ------------------------------- ------------------------------
10,723,438
-
================== ================ ================ ================
(1,028,165)
11,751,603
(765,414)
Bango has two revenue streams, which it reports separately. Firstly, revenue from transaction fees due to EUS, secondly, revenue from
other fees paid by merchants to connect to Bango and other services.
Group assets include non-current assets and cash and cash equivalents. Group liabilities relate to administrative expenses.
Non-current assets are all based in the UK.
37 Bango PLC | Annual Report 2017
Notes to the financial statements
Notes to the financial statements
12 months to 31 December 2016
End user
activity
£
Other
fees
£
Group
Total
£
£
Segment revenue
Cost of sales – payment providers
2,410,871
(7,054)
213,316
-
------------------------------- ------------------------------- ------------------------------- -------------------------------
2,624,187
(7,054)
-
-
Segment gross profit
2,403,817
213,316
-
2,617,133
Administrative expenses
Non-recurring items
Share based payments charge
Depreciation
Amortization
Interest payable
Interest income
Segment net profit/ (loss)
Segment assets
Segment liabilities
Net assets
------------------------------- ------------------------------- ------------------------------- -------------------------------
(5,039,873)
(376,013)
(359,373)
(319,284)
(1,150,822)
(53,661)
30,363
(5,039,873)
(376,013)
(359,373)
(319,284)
(1,150,822)
(53,661)
30,363
-
-
-
-
-
-
-
-
-
-
-
-
-
-
------------------------------- ------------------------------- ------------------------------- -------------------------------
2,403,817
(4,651,530)
================== ================ ================ ================
(7,268,663)
213,316
434,365
125,859
13,588,572
14,148,796
(357,920)
(1,792,908)
-
--------------------------------- ------------------------------ ------------------------------- ------------------------------
12,355,888
================== ================ ================ ================
12,153,584
(1,434,988)
125,859
76,445
(c) Geographical analysis
Bango’s revenue from external customers is divided into the following geographical areas.
United Kingdom (country of domicile)
EU
USA and Canada
Indonesia
Rest of World
31 Dec 2017
31 Dec 2016
£
£
12,264
58,719
2,050,162
249,295
1,781,499
12,653
47,857
1,745,150
563,585
254,942
---------------------------------------------------
4,151,939
======= ========
---------------------------------------------------
2,624,187
===============
Segment revenue is based on the location of the partners. All turnover from end users is spread over many territories, of which £1.8m
comes from a partner in the USA and Canada, £0.4m from a partner in Rest of World and £0.6m from another partner in Rest of World
(2016: £1m USA and Canada and £0.3m Rest of World).
Bango PLC | Annual Report 2017 38
Notes to the financial statements
Notes to the financial statements
5 Non-current assets
5.1 Property, plant and equipment
Cost
At 1 January 2016
Additions
At 31 December 2016
Depreciation
At 1 January 2016
Charge for the year
At 31 December 2016
Net book value
At 31 December 2016
Cost
At 1 January 2017
Additions
At 31 December 2017
Depreciation
At 1 January 2017
Charge for the year
At 31 December 2017
Net book value
At 31 December 2017
Leasehold
improvements
£
Office
equipment
£
Computer
equipment
£
Total
£
354,786
1,390
--------------------------------------
356,176
======================
155,081
2,299
--------------------------------------
157,380
======================
1,753,942
102,865
--------------------------------------
1,856,807
======================
2,263,809
106,554
--------------------------------------
2,370,363
======================
219,549
33,051
--------------------------------------
252,600
======================
124,536
14,408
--------------------------------------
138,944
======================
1,412,429
271,825
--------------------------------------
1,684,254
======================
1,756,514
319,284
--------------------------------------
2,075,798
======================
103,576
======================
18,436
======================
172,553
======================
294,565
======================
Leasehold
improvements
£
Office
equipment
£
Computer
equipment
£
Total
£
356,176
3,445
--------------------------------------
359,621
======================
157,380
26,005
--------------------------------------
183,385
======================
1,856,807
421,344
--------------------------------------
2,278,151
======================
2,370,363
450,794
--------------------------------------
2,821,157
======================
252,600
33,281
--------------------------------------
138,944
11,054
--------------------------------------
1,684,254
144,161
--------------------------------------
285,881
======================
149,998
======================
1,828,415
======================
2,075,798
188,496
--------------------------------------
2,264,294
======================
73,740
======================
33,387
======================
449,736
======================
556,863
======================
Included at year end within leasehold improvements were assets with net book value of £42,603, computer equipment with net book
value of £124,444 and software with net book value of £131,633 held under finance leases (31 December 2016: leasehold improvements
£59,645 and computer equipment £27,862). Depreciation is shown within administrative expenses in the income statement. Financial
lease liabilities are secured on the assets to which they relate.
Bango PLC has no property, plant and equipment.
39 Bango PLC | Annual Report 2017
Notes to the financial statements
Notes to the financial statements
5.2 Intangible assets
Cost
At 1 January 2016
Additions
Foreign exchange
revaluation
Domain
Names
£
Internal
Development
£
Trade and
Assets
£
Goodwill
Total
£
£
32,887
-
-
6,247,309
1,159,052
-
-
1,263,194
84,213
-
1,125,000
75,000
6,280,196
3,547,246
159,213
At 31 December 2016
32,887
7,406,361
1,347,407
1,200,000
9,986,655
Amortization
At 1 January 2016
Charge for period
32,887
-
2,800,697
967,584
-
168,426
At 31 December 2016
32,887
3,768,281
168,426
-
-
-
2,833,584
1,136,010
3,969,594
Net book value at
31 December 2016
-
3,638,080
1,178,981
1,200,000
6,017,061
Cost
At 1 January 2017
Additions
Domain
Names
£
Internal
Development
£
32,887
-
7,406,361
1,509,670
Trade and
Assets
£
1,347,407
-
Goodwill
£
Total
£
1,200,000
-
9,986,655
1,509,670
At 31 December 2017
32,887
8,916,031
1,347,407
1,200,000
11,496,325
Amortization
At 1 January 2017
Charge for period
Impairment
32,887
-
-
3,768,281
807,409
308,422
168,426
280,710
-
At 31 December 2017
32,887
4,884,112
449,136
-
-
-
-
3,969,594
1,088,119
308,422
5,366,135
Net book value at
31 December 2017
-
4,031,919
898,271
1,200,000
6,130,190
Amortization is shown within administrative expenses in the income statement. Bango regularly reviews its intangible assets to ensure
that they are not impaired through periodic impairment testing in line with IAS 36. Assets are reviewed separately in relation to the
revenue that will be generated from them as a discreet product. They are therefore separately assessed for signs of impairment using a
discounted cash flow with a 20% discount rate (20% in prior year) and using the latest available financial forecasts. At the end of the
year one project was partially impaired as recent R&D work has superseded the original work done. No other projects had any indication
of impairment.
Goodwill is reviewed annually for signs of impairment. Goodwill relates solely to the acquisition of BilltoMobile Inc in May 2016. The
recoverable amount of the related commercial agreements are determined from the value in use. The key assumptions are the discount
rates (20% used consistent with review of intangibles and deemed prudent to the Bango WACC), growth rates (conservative assumptions
have been used in comparison to the growth rate since acquisition) and net margin. The Directors have reviewed the acquired goodwill
and do not consider there are any indicators of impairment.
The goodwill has been allocated to the EUS activity business segment which is a separate cash generating unit to the Other Fees
segment. Cash flows for a period of 10 years have been reviewed in assessing the goodwill and there are no indicators of impairment
following sensitivity analysis of the key assumptions.
Bango PLC | Annual Report 2017 40
Notes to the financial statements
Notes to the financial statements
6 Trade and other receivables
Trade receivables
Other receivables
Prepayments and accrued income
Impairment of trade receivables
Research and development tax credits
Total
31 Dec 2017
£
31 Dec 2016
£
2,018,088
(5,000)
1,123,889
130,497
763,702
404,839
111,406
1,310,551
------------------------------- -------------------------------
1,826,796
(5,000)
------------------------------- -------------------------------
1,821,796
318,857
------------------------------- -------------------------------
2,140,653
================= =================
2,013,088
421,215
2,434,303
At 31 December 2017, some of the unimpaired trade receivables are past their due date. The age of financial assets past due but not
impaired is as follows:
Not more than one month
One to two months
Three to twelve months
More than twelve months
31 Dec 2017
£
31 Dec 2016
£
364,873
9,972
20,733
-
-----------------------
395,578
=============
78,110
23,036
13,225
-
-----------------------
114,371
=============
Trade and other receivables are usually due within 30-60 days and do not bear any effective interest rate. All trade receivables are subject
to credit risk exposure.
Trade receivables from digital merchants consist of numerous accounts with no significant individual balances. Provision for impairment
has been made where the debt is not considered likely to be recoverable.
The fair value of these short term financial assets is not individually determined as the carrying amount is a reasonable approximation of
fair value. There is no material difference between fair value and book value.
A reconciliation of bad debt provision for trade receivables is provided below:
Brought forward provision
Debts written off in the year
Increase in provision
Carry forward provision
31 Dec 2017
£
31 Dec 2016
£
5,000
-
-
------------------
5,000
==========
5,000
(3,755)
3,755
------------------
5,000
==========
41 Bango PLC | Annual Report 2017
Notes to the financial statements
Notes to the financial statements
7 Share capital and employee share options
Allotted, called up and fully paid:
Ordinary shares of 20p each in Bango PLC
As at 31 December 2015
Issue of new shares
Exercise of share options
As at 31 December 2016
Exercise of share options
As at 31 December 2017
No
£
64,431,751
12,886,350
117,219
586,095
25,555
127,772
-----------------------
-------------------------
13,029,124
65,145,618
-----------------------
-------------------------
255,437
1,277,185
-------------------------
-------------------------
66,422,803
13,284,561
============== ==============
During the year 1,277,185 share options were exercised at exercise prices between 23 pence and 232.5 pence and a par value of 20
pence per share. The total proceeds were £1.18m of which £0.26m was recognized as share capital and £0.92m as share premium.
The Group issues share options to Directors and to employees under either an HM Revenue and Customs approved Enterprise
Management Incentive (EMI) scheme or an unapproved scheme. Employees resident overseas are eligible to participate in the scheme
but their options do not qualify as HM Revenue and Customs approved.
The grant price for share options is equal to the average quoted market price of the company shares on the date of grant. Options do
not fully vest for three years. The options lapse if share options remain unexercised after a period of ten years from the date of grant or
if the employee leaves the Group.
Movements in the number of share options outstanding and their related weighted average exercise prices are as follows:
31 Dec 2017
Options
31 Dec 2016
Options
Average
exercise price
per share
p
103
185
120
92
-----------------------------------
129
Average
exercise price
per share
p
122
66
145
67
-----------------------------------
103
No
3,729,196
1,448,000
(554,375)
(127,772)
-----------------------------------
4,495,049
===================== ===================== ===================== =====================
3,596,875
===================== ===================== ===================== =====================
No
4,495,049
1,226,000
(364,248)
(1,277,185)
-----------------------------------
4,079,616
2,341,691
123
109
Outstanding at 1 January 2017
Granted
Lapsed
Exercised
Outstanding at 31 December 2017
Exercisable at 31 December 2017
The weighted average share price at date of exercise of options exercised during the year was 138.32 pence (2016: 89.72 pence).
The fair value of options granted during the year, determined using the Black-Scholes valuation model, were between 60 - 144 pence.
Significant inputs into the model include a weighted average share price of 185 pence (31 December 2016: 65.66 pence) at the grant
date, the exercise prices, volatility of 59.4-60.4% (31 December 2016: 49.3-60.0%), dividend yield of nil (31 December 2016: nil), an
expected option life of five years (31 December 2016: five years) and an annual risk-free interest rate of 0.51-0.78% (31 December
2016: 0.28-0.90%).
For the most recent share awards there was sufficient share price data for Bango PLC to calculate the company's volatility, which is based
on five years historical share prices.
Bango PLC | Annual Report 2017 42
Notes to the financial statements
Notes to the financial statements
At 31 December 2017, Bango PLC had the following outstanding options and exercise prices:
Average
exercise
price per share
31 Dec 2017
Options Remaining
Contractual
Average
exercise
Life price per share
Options
31 Dec 2016
Remaining
Contractual
Life
Expiry date
Pence
Number
Months
Pence
Number
Months
2017
2017
2018
2018
2019
2019
2020
2020
2021
2021
2021
2021
2022
2022
2022
2023
2023
2023
2023
2024
2024
2025
2025
2026
2026
2026
2027
2027
23 March
19 September
31 January
15 October
19 February
1 October
17 March
24 September
7 February
17 March
9 September
27 September
23 March
20 September
06 November
26 March
02 April
27 June
04 October
01 April
22 October
16 March
18 September
16 March
21 September
14 December
21 March
22 September
At 31
December
8 Trade and other payables
Trade payables
Social security and other taxes
Accruals and deferred income
-
-
-
53.50
44.00
44.50
59.50
167.00
-
82.50
82.00
-
142.50
166.50
218.00
232.50
218.50
180.00
126.00
136.00
101.00
106.00
88.50
43.00
89.00
70.50
114.50
255.00
-
-
-
8,875
8,875
8,875
8,875
8,875
-
10,875
10,620
-
20,322
46,323
100,000
243,500
10,000
50,000
126,166
165,500
196,535
226,240
408,509
605,442
577,201
29,154
597,354
611,500
------------------------
-
-
-
10
14
21
27
33
-
39
45
-
51
57
59
63
63
66
70
76
82
87
93
99
105
108
111
117
------------------------
50.50
41.00
23.00
53.50
44.00
44.50
59.50
167.00
153.00
82.50
82.00
76.50
142.50
166.50
218.00
232.50
218.50
180.00
126.00
136.00
101.00
106.00
88.50
43.00
89.00
70.50
96,000
100,500
48,417
15,125
38,916
46,520
48,297
49,935
100,000
47,740
56,050
20,000
66,822
96,323
100,000
298,000
10,000
50,000
243,000
281,000
326,500
336,000
587,164
699,240
683,500
50,000
-
-
3
9
13
22
26
33
39
45
50
51
57
57
63
69
71
75
75
78
82
88
94
99
105
111
117
120
-
-
-
-
------------------------ ---------------------------
4,079,616
95
============= =============
4,495,049
89
============= =============
31 Dec 2017
£
31 Dec 2016
£
1,659,053
153,569
1,154,916
----------------------
2,967,538
846,212
109,416
741,726
----------------------
1,697,354
============= ================
Trade and other payables are due within one year and are non-interest bearing. There is no material difference between book value
and fair value. The increase in trade payables at the 31 December 2017 is consistent with the increase in trade receivables and the
growth in revenue in the business.
43 Bango PLC | Annual Report 2017
Notes to the financial statements
Notes to the financial statements
9 Commitments
Bango leases two offices and some small office equipment under non-cancellable operating leases for which the future aggregate
minimum lease payments are as follows:
31 Dec 2017
£
31 Dec 2016
£
No later than 1 year
Later than 1 but no later than 5 years
More than 5 years
The UK lease expires on 17 November 2023.
157,906
631,624
136,515
153,869
588,832
267,094
----------------------------- -----------------------------
1,009,795
=============
926,045
=============
Bango has finance leases for technical computer equipment, software and leasehold equipment. The leases will terminate between May
2018 and December 2020. The lease agreement includes fixed non-cancellable lease payments, and does not contain any further
restrictions. Finance lease liabilities are secured by the related assets held under finance lease.
Gross lease liabilities
Within one year
Between two and five years
Future interest
31 Dec 2017
£
31 Dec 2016
£
299,214
112,202
187,012
86,227
13,709
----------------------------- -----------------------------
99,936
----------------------------- -----------------------------
(4,382)
----------------------------- -----------------------------
95,554
=============
277,583
================
(21,631)
The present value of finance lease liabilities is repayable as follows:
31 Dec 2017
£
31 Dec 2016
£
Within one year
Between two and five years
10 Expenses by nature
Employee benefit expense
Depreciation, amortization and impairment
Other expenses
Analyzed as:
Administrative expenses
Share based payments
Depreciation
Amortization and impairment
99,889
177,694
82,149
13,405
----------------------------- -----------------------------
95,554
=============
277,583
================
31 Dec 2017
£
31 Dec 2016
£
4,588,608
1,585,037
1,867,394
------------------------
8,041,039
=============
5,776,979
679,023
188,496
1,396,541
----------------------
8,041,039
=============
3,965,077
1,470,106
1,810,182
------------------------
7,245,365
=============
5,415,886
359,373
319,284
1,150,822
----------------------
7,245,365
============
Bango PLC | Annual Report 2017 44
Notes to the financial statements
Notes to the financial statements
11a Profit or loss before taxation
Profit or loss before taxation is stated after charging:
Auditor's remuneration:
Fees payable to the Company’s auditor for the audit of the financial statements
Fees payable to the Group’s auditors for other services: audit of Group’s subsidiaries
Other services relating to other assurance services
Other services relating to taxation compliance services
Other services relating to taxation advisory services
Other services relating to international taxation advisory and compliance services
Operating lease expenses:
Land and buildings
Finance lease charges in year
Exchange rate variances
Depreciation on property, plant and equipment – lease assets
Depreciation on property, plant and equipment – owned assets
Amortization of intangible assets
Impairment of intangible assets
Research and development costs
31 Dec 2017
£
31 Dec 2016
£
5,000
57,000
10,000
10,200
5,400
62,300
4,000
42,500
13,700
9,900
3,300
50,000
226,716
211,149
51,458
53,661
(52,086)
(70,916)
60,427
128,069
1,088,119
308,422
96,330
186,213
133,071
1,150,822
-
93,798
================ ================
11b Non-recurring items
These costs relate to the acquisition of Audiens SRL and associated fundraise that took place on 23 January 2018 (2016: related to the
acquisition of BilltoMobile Inc).
12 Employee benefit expense
The average number of staff employed by Bango during the financial year amounted to:
Administrative staff
Marketing staff
Sales staff
Technical staff
Executive Directors
Support staff
The aggregate payroll costs of the above were:
Wages and salaries
Social security costs
Other pension costs
Share based remuneration
31 Dec 2017
No
31 Dec 2016
No
8
6
11
22
3
28
-------------
78
======
6
5
7
22
4
28
-----------
72
======
31 Dec 2017
£
31 Dec 2016
£
3,703,149
410,141
206,436
679,023
3,456,747
386,483
148,958
359,373
----------------------------- -----------------------------
4,351,561
================ ================
4,998,749
Included in the above payroll costs is £1,340,684 (31 December 2016: £995,493) capitalized within internal development (note 5.2).
45 Bango PLC | Annual Report 2017
Notes to the financial statements
Notes to the financial statements
The Directors have identified sixteen (31 December 2016: eleven) key management personnel, including Directors. Compensation to key
management is set out below:
Short term employee benefits
Employers national insurance
Post-employment benefits
Share based compensation
31 Dec 2017
£
1,299,167
152,147
22,531
306,788
31 Dec 2016
£
1,086,653
138,861
46,725
116,281
----------------------------- -----------------------------
1,388,520
================ ================
1,780,633
13 Directors
Remuneration in respect of Directors was as follows:
Emoluments
31 Dec 2017
£
31 Dec 2016
£
630,533
============
680,435
============
Further details can be found in the Remuneration Committee Report). The highest paid Director received total salary of £206,250 (31
December 2016: £198,000), pension contributions of £2,255 (31 December 2016: £1,650), and share based compensation of £50,908
(31 December 2016: £11,122).
The number of Directors who accrued benefits under pension schemes was three (31 December 2016: four).
The total share based compensation for Directors was £155,816 (31 December 2016: £58,236).
For details of Directors options please see the Directors and their interest section of the Directors’ report.
During the year Bango was invoiced £42,000 by Fusion Mobile Value Limited, a company of which Gianluca D’Agostino is sole director.
The amount invoiced relates to consultancy work carried out by Gianluca D’Agostino in the year.
14 Investment income
Bank interest receivable
31 Dec 2017
£
20,858
31 Dec 2016
£
30,363
================ ================
Bango PLC | Annual Report 2017 46
Notes to the financial statements
Notes to the financial statements
15 Taxation
Income tax
R&D tax credits receivable
Over/(Under) provision of prior year credit
Tax paid overseas
(Over)/under provision of prior year overseas tax
Income tax expense for the year differs from the standard rate of taxation as follows:
Loss on ordinary activities before taxation
Loss on ordinary activities multiplied by standard rate of tax of 19.25% (31 December
2016: 20.00%)
Effect of:
Expenses not deductible for tax purposes
Deferred tax not recognized
Unutilized tax losses
Additional deductions for R&D expenditure
Surrender of tax losses for R&D
Other permanent differences
Tax paid overseas
Adjustments in relation to prior years
Total tax
31 Dec 2017
£
(421,215)
(8,126)
18,953
(76,598)
31 Dec 2016
£
(318,857)
(9,806)
90,250
-
------------------------------ ------------------------------
(238,413)
================ ================
(486,986)
(3,435,153)
(4,777,915)
================ ================
(661,171)
(955,583)
146,477
2,290
259,689
(382,944)
167,089
47,356
18,953
(84,727)
89,264
1,946
779,826
(248,584)
120,946
(106,672)
90,250
(9,806)
------------------------------ ------------------------------
(238,413)
================ ================
(486,986)
At 31 December 2017, the unutilized tax losses carried forward amounted to £33.2 million (at 31 December 2016: £32.1 million).
Deferred tax assets/ (liabilities):
Share option deduction
Tax losses
Other temporary differences
Accelerated capital allowances and capitalized
development costs
Provided
31 Dec 2017
Provided Unprovided
31 Dec 2016 31 Dec 2017
Unprovided
31 Dec 2016
£
£
£
£
-
546,870
(5,016)
-
418,102
(1,230)
757,736
4,558,279
-
133,820
3,794,139
-
(541,854)
-----------------------
-
-
-
-----------------------
------------------------------ ----------------------
3,927,959
5,316,015
-
================ ================ ============== ================
(416,872)
All unrecognized deferred tax balances relate to the UK and are expected to offset. No deferred tax asset has been recognized in respect
of the above temporary differences due to the unpredictability of future taxable trading profits from which these differences may be
deducted.
16 Loss per share
(a) Basic
Basic earnings per share are calculated by dividing the loss attributable to equity holders of Bango PLC by the weighted average number
of ordinary shares in issue during the year.
Loss attributable to equity holders of Bango PLC
31 Dec 2017
£
(3,435,153)
31 Dec 2016
£
(4,413,117)
Weighted average number of ordinary shares in issue
65,768,111
65,026,008
Earnings (basic) per share
(5.22)p
(6.81) p
47 Bango PLC | Annual Report 2017
Notes to the financial statements
Notes to the financial statements
(b) Diluted
Diluted earnings per share is calculated by adjusting the weighted average number of shares outstanding to assume conversion of all
dilutive potential ordinary share options.
Loss attributable to equity holders of Bango PLC
Weighted average number of ordinary shares
Earnings (diluted) per share
31 Dec 2017
£
(3,435,153)
31 Dec 2016
£
(4,413,117)
65,768,111
65,026,008
(5.22)p
(6.81) p
At 31 December 2017 options over 4,079,616 (31 December 2016: 4,495,049) ordinary shares were outstanding. Given the loss for the
year, these options are considered to be anti-dilutive. Such options could potentially dilute basic loss per share in the future.
17 Cash used by operations
Loss for the financial year
Depreciation. amortization and impairment
Taxation in income statement
Investment income
Interest payable
Foreign exchange movement on cash balances
Share-based payment expense
(Increase)/decrease in receivables
Increase/(decrease) in payables
Realized currency translation
Corporation tax rebate
Net cash used by operations
31 Dec 2017
£
(3,435,153)
1,585,037
(486,986)
(20,858)
51,458
(32,847)
679,023
(1,393,322)
2,431,490
(118,503)
31 Dec 2016
£
(4,413,117)
1,455,293
(238,413)
(30,363)
53,661
51,780
359,373
(595,427)
442,220
29,723
---------------------- ----------------------
(2,885,270)
238,413
---------------------- ----------------------
(2,646,857)
================ ===============
(740,661)
486,986
(253,675)
18 Financial assets and liabilities
Financial assets included in the balance sheet relate to the following IAS 39 categories:
Loans and receivables
Total financial assets
These financial assets are included in the balance sheet within the following headings:
Current assets
Trade and other receivables
Cash and cash equivalents
Total financial assets
31 Dec 2017
£
31 Dec 2016
£
5,966,092
----------------------
5,966,092
================
6,096,356
-------------------------
6,096,356
==============
31 Dec 2017
£
31 Dec 2016
£
1,118,889
4,847,203
----------------------
5,966,092
================
399,839
5,696,517
-------------------------
6,096,356
==============
Bango PLC | Annual Report 2017 48
Notes to the financial statements
Notes to the financial statements
Financial liabilities included in the balance sheet relate to the following IAS 39 categories:
Financial liabilities measured at amortized cost
Total financial liabilities
These financial liabilities are included in the balance sheet within the following headings:
Current liabilities
Trade payables
Accruals
Total financial liabilities
31 Dec 2017
£
31 Dec 2016
£
2,813,968
----------------------
2,813,968
================
1,587,938
-------------------------
1,587,938
==============
31 Dec 2017
£
31 Dec 2016
£
1,659,053
1,154,916
----------------------
2,813,969
================
846,212
741,726
-------------------------
1,587,938
==============
19 Credit risk analysis
Bango’s exposure to credit risk is limited to the carrying amount of financial assets and cash and cash equivalents recognized at the
balance sheet date, as summarized in note 18.
Bango continuously monitors the default of partners and other counterparties and incorporates this information into its credit risk controls.
Where available at reasonable cost, external credit ratings and / or reports on customers and other counterparties are obtained and used.
Bango’s policy is to deal only with creditworthy counterparties.
Bango’s management considers that all the financial assets that are not impaired for each of the reporting dates under review are of
good credit quality including those that are past due. See note 6 for further information on trade receivables that are past due. The only
other financial asset that is not cash are tax credits due from HMRC.
None of Bango’s financial assets are secured by collateral or other credit enhancements.
In respect of trade and other receivables, Bango is not exposed to any significant credit risk exposure to any single counterparty or any
group of counterparties having similar characteristics. Bango completes regular credit checks on those payment providers accounting for
significant individual balances. In addition, the terms and conditions of trade with some digital merchants allow the group to withhold
payment of the relevant part of the digital merchant earnings until payment is received from the payment provider.
The credit risk for liquid funds and other short-term financial assets is considered negligible, since the counterparties are reputable banks
with high quality external credit ratings.
20 Liquidity risk analysis and capital management
Bango manages its liquidity needs by carefully monitoring cash outflows due in day-to-day business. Liquidity needs are monitored in
various time bands, on a day-to-day and week-to-week basis, as well as on a monthly basis. Long-term liquidity needs are identified on
a quarterly basis, taking account of operating activities and investing activities.
At 31 December 2017 Bango’s financial liabilities had contractual maturities which are summarized below:
Trade and other payables within 6 months
Finance lease obligations within 6 months
Finance lease obligations 6 to 12 months
Finance lease obligations 1 year to 5 years
Financial liabilities
31 Dec 2017
£
31 Dec 2016
£
2,813,968
56,096
43,793
177,694
---------------------
3,091,551
1,587,938
57,170
24,969
13,405
--------------------------
1,683,482
============= =============
Bango’s capital management objectives are to ensure Bango’s ability to continue as a going concern and to provide an adequate return
to shareholders, via sufficient cash resources, through profitable trading and equity issues to mitigate liquidity risk.
The Directors consider that the capital management objectives have been satisfied through the adequate management of liquidit y, as
sufficient cash is available to meet all liabilities falling due in the next year.
At 31 December 2017 Bango only had hire purchase borrowings.
49 Bango PLC | Annual Report 2017
Notes to the financial statements
Notes to the financial statements
Capital for the reporting year under review is summarized as follows:
Overall financing
Capital
31 Dec 2017
£
31 Dec 2016 31 Dec 2017
£
£
31 Dec 2016
£
Total equity
Less cash and cash equivalents
Plus borrowings
10,723,438
-
277,583
--------------------------------------------
11,001,021
12,355,888
(5,696,517)
-
--------------------------------------------
6,659,371
============ ============ ============ ============
12,355,888
-
95,554
--------------------------------------------
12,451,432
-
--------------------------------------------
5,876,235
10,723,438
(4,847,203)
The capital to overall financing ratio is 53.4% (2016: 53.5%).
21 Market risk analysis
21.1 Interest risk sensitivity
Bango has no borrowings on which it is subject to interest rate risk. The risk associated with interest earned on cash balances is low, given
the low level of interest currently being earned.
21.2 Foreign currency sensitivity
Exposure to currency exchange rates arise from the Bango’s overseas sales and purchases, which are primarily denominated in US Dollars
and Euros.
The amounts to be paid and received in a specific currency are expected to largely offset one another, so no hedging activity is undertaken.
Foreign currency denominated financial assets and liabilities, translated into sterling at the closing rate, are as follows.
Nominal amounts
US $
USD
Euro
EUR
Australian $
AUD
Canadian $
CAD
Indonesia Rp
IDR
Qatari Riyal
QAR
South African Rand ZAR
Saudi Arabian Riyal SAR
Japanese Yen JPY
Other
Short term exposure
£
Financial
assets
31 Dec 2017
£
Financial
liabilities
£
Net assets/
(liabilities)
£
Financial
assets
31 Dec 2016
£
Financial
liabilities
£
Net assets/
(liabilities)
1,943,192
709,589
1,233,603
2,168,532
815,309
1,353,223
65,488
18,881
46,607
73,957
15,182
42,995
72,635
35,094
-
-
-
-
4,991
40,752
1,329,942
68,112
-----------------------------------
3,603,200
==== =====
-
782
-
723,079
22,829
-----------------------------------
1,475,160
==== =====
42,995
63,159
72,635
106,093
35,094
41,896
-
4,209
40,752
606,863
45,283
-----------------------------------
2,124,808
==== =====
1,296
12,812
31,887
119,186
39,130
-----------------------------------
2,657,948
==== =====
-
-
-
-
782
-
5,156
485
-----------------------------------
836,914
==== =====
58,775
63,159
106,093
41,896
1,296
12,030
31,887
114,030
38,645
-----------------------------------
1,821,035
==== =====
Sensitivity analysis has been performed on the financial assets and liabilities to assess the exposure of the group to foreign exchange
movements. If exchange rates moved so that sterling strengthened by 5% then the effect on the balance sheet would be a loss of
£101,181 and if it moved by 10% then there would be a total loss of £193,164.
22 Post balance sheet events
Fundraise
On 24 January 2018 Bango announced a placing of 2,777,778 new ordinary share at a price of 180 pence per share, to raise £5 .02m
(£4.76m net of fees). This is split as:
Share capital
Share premium
Total
£
555,555
4,208,945
4,764,500
Bango PLC | Annual Report 2017 50
Notes to the financial statements
Notes to the financial statements
Acquisition of Audiens S.R.L
On 23 January 2018 Bango acquired 98.45 per cent of Audiens S.R.L. (Audiens), a data management company incorporated in Italy. The
acquisition is intended to enable Bango to capitalize on demand for the valuable data it generates through its existing operations and to
enable the Bango Platform to provide additional value to the rapidly growing mobile advertising market.
At the time the financial statements were authorized for issue, Bango had not yet completed a full review of the accounting f or the
acquisition of Audiens. In particular, the fair values of the assets and liabilities acquired and the allocation of contingent payments
between consideration and remuneration under IFRS3 have not been determined, and an independent valuation has not been finalized.
The provisional estimate of consideration is £4.96m comprising:
Cash consideration
Shares issued (1)
Warrants issued (2)
Option agreement (3)
Cash for provision of shared services for 12 months
Total
£
1,301,971
939,245
1,329,118
835,725
554,217
4,960,276
(1) Bango issued 521,803 ordinary shares of 20 pence each at an issue price 180 pence per share.
(2) Bango issued 738,399 warrants over Bango ordinary shares of 20 pence exercisable over 10 years at 180 pence.
(3) The remaining 1.55 per cent of Audiens is retained by Marko Maras, a co-founder of Audiens (the “Maras Shares”). Bango has
entered into an agreement with Mr Maras relating to the Maras Shares. Under the terms of the Option Agreement Bango can
call upon Mr Maras to sell these shares to Bango in certain circumstances and Mr Maras can call upon Bango to purchase these
shares in certain circumstances. The final date by which either option must be exercised it 28 February 2020. On exercise of
either option, Mr Maras may be entitled to payment for the Maras Shares calculated at £0.84m, based on the placing price,
payable by Bango subject to certain conditions, including the achievement of specific revenue targets by Audiens. The amount
payable to Mr Maras will reduce as the Bango share price rises, but could increase, on a sliding scale, to a maximum of £1.21m,
should the revenue objectives be met but the Bango share price falls below the placing price at that point.
Incorporation of Bango Deep Limited
Bango Deep Limited, a company incorporated under the Companies Act 2006, was incorporated on 2 January 2018. It is a 100% owned
subsidiary of Bango PLC.
51 Bango PLC | Annual Report 2017
Statement of financial position of Bango PLC
Statement of financial position of
Bango PLC
ASSETS
Non-current assets
Investment in subsidiary
Trade and other receivables due after one year
Current assets
Trade and other receivables due within one year
Total assets
EQUITY
Capital and reserves
Share capital
Share premium account
Retained earnings
Total equity
LIABILITIES
Trade and other falling due within one year
Total liabilities
Total equity and liabilities
Note
31 Dec 2017
£
31 Dec 2016
£
4
5
5
8
9
9
6
29,684,765
17,209,241
----------------------------
46,894,006
----------------------------
29,005,642
16,144,791
----------------------------
45,150,433
----------------------------
27,721
----------------------------
27,721
----------------------------
9,510
----------------------------
9,510
----------------------------
46,921,727
45,159,943
=============== ===============
13,284,561
31,248,453
2,372,006
----------------------------
46,905,020
13,029,124
30,323,341
1,787,896
----------------------------
45,140,361
=============== ===============
16,707
----------------------------
16,707
----------------------------
46,921,727
19,582
----------------------------
19,582
----------------------------
45,159,943
=============== ===============
These financial statements were approved by the Directors on 13 March 2018 and are signed on their behalf by:
R Anderson
Director
R Elias-Jones
Director
Company registration number 05386079
The company has taken the exemption under section 408 of the Companies Act 2006 not to present a full income statement, but the
loss for the year for the company was £94,913 (2016: £35,673).
The notes on pages 55 to 58 are an integral part of these consolidated financial statements
Bango PLC | Annual Report 2017 52
Statement of changes in equity of Bango PLC
Statement of changes in equity of
Bango PLC
Balance at 1 January 2016
Share based payments
Exercise of share options
Issue of shares
Expenses of share issue
Transactions with owners
Loss for the year
Total comprehensive income
for the year
Balance at 31 December 2016
Balance at 1 January 2017
Share based payments
Exercise of share options
Transactions with owners
Loss for the year
Total comprehensive income
for the year
Balance at 31 December 2017
Share
capital
£
Share
premium
£
Retained
earnings
£
Total
£
12,886,350
-
25,555
117,219
-
142,774
30,101,510
-
60,393
164,106
(2,668)
221,831
1,464,196
359,373
-
-
-
359,373
44,452,056
359,373
85,948
281,325
(2,668)
723,978
-
-
13,029,124
-
-
30,323,341
(35,673)
(35,673)
1,787,896
(35,673)
(35,673)
45,140,361
13,029,124
-
255,437
255,437
30,323,341
-
925,112
925,112
1,787,896
679,023
-
679,023
45,140,361
679,023
1,180,549
1,859,572
-
-
(94,913)
(94,913)
-
13,284,561
-
31,248,453
(94,913)
2,372,006
(94,913)
46,905,020
The notes on pages 55 to 58 are an integral part of these consolidated financial statements
53
Bango PLC | Annual Report 2017
Cashflow statement of Bango PLC
Cashflow statement of Bango PLC
Loss for year
(94,913)
(35,673)
31 Dec 2017
£
31 Dec 2016
£
Cash flows from operating activities
Interest received
(Increase)/decrease in receivables
Increase/(decrease) in payables
Net cash used by operating activities
Cash flows generated from investing activities
Loan to group undertaking
Investment in subsidiaries
Net cash used by investing activities
Cash flows from financing activities
Proceeds from issuance of ordinary shares
Costs associated with issuance of ordinary shares
Interest receivable
Non-cash issue of shares
Net cash generated from financing activities
Net increase in cash and cash equivalents
(228,181)
(31,700)
(9,666)
(202,286)
18,288
(49,845)
---------------------------- -----------------------------
(233,843)
(269,547)
(1,044,170)
(100)
(268,471)
(28,904)
---------------------------- -----------------------------
(297,375)
---------------------------- -----------------------------
(1,044,270)
1,180,549
-
228,181
-
85,948
(2,668)
202,286
281,325
---------------------------- -----------------------------
566,891
---------------------------- -----------------------------
-
1,408,730
-
Cash and cash equivalents at beginning of year
-
-
Cash and cash equivalents at end of year
---------------------------- -----------------------------
-
================ ================
-
The notes on pages 55 to 58 are an integral part of these consolidated financial statement
Bango PLC | Annual Report 2017 54
Notes to the financial statements
Notes to the financial statements
1 Accounting policies
Basis of accounting
The separate financial statements of Bango PLC are presented as required by the Companies Act 2006. They have been prepared under
the historical cost convention and under the basis of going concern.
Bango has prepared its Report and accounts for the year ended 31 December 2017, in accordance with International Financial Reporting
Standards (“IFRS”) as adopted in the European Union and as applied in accordance with the provisions of the Companies Act 2006. IFRS
requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying
the accounting policies.
The principal accounting policies are summarized below. They have all been applied consistently throughout the year.
Investments
Fixed asset investments are shown at cost less provision for impairment.
Share based payments
Bango PLC issues equity settled share-based compensation to certain employees (including Directors) of its trading subsidiaries. Equity
settled share-based payments are measured at fair value at the date of grant. The fair value determined at the grant date of the
equity-settled share-based payment is credited to reserves on a straight-line basis over the vesting period, together with a
corresponding increase in the book value of Bango PLC’s investment in subsidiaries, based upon the estimate of the shares that will
eventually vest. These estimates are subsequently revised if there is any indication that the number of options expected to vest differs
from previous estimates. Any cumulative adjustment prior to vesting is recognized in the current period. No adjustment is made to any
expense recognized in prior periods.
Fair value is measured by an external valuer using the Black-Scholes option pricing model. The expected life used in the model has
been adjusted, based on management’s best estimate, for the effects of non-transferability, exercise restrictions and behavioural
considerations.
Where the terms of an equity-settled transaction are modified, as a minimum an expense is recognized as if the terms had not been
modified. In addition, an expense is recognized for any increase in the value of the transaction as a result of the modification, as
measured by the date of modification, over the remaining vesting period.
Where an equity-settled transaction is cancelled, it is treated as if it had vested on the due date of the cancellation, and any expense
not yet recognized for the transaction is recognized immediately. However, if a new transaction is substituted for the cancelled
transaction, and designated as a replacement transaction on the date that it is granted, the cancelled and new transactions are treated
as if they were a modification of the original transaction, as described in the previous paragraph.
Loans and receivables
a) Cash and cash equivalents
Cash and cash equivalents comprise cash in hand and bank deposits available on demand, together with other short term highly liquid
investments.
b) Trade and other receivables
Trade and other receivables are recognized initially at fair value and are measured subsequent to initial recognition net of any provision
for impairment. Any change in their value through impairment or reversal of impairment is recognized in profit or loss.
Provision against trade receivables is made when there is objective evidence that the Group will not be able to collect all amounts due to
it in accordance with the original terms of those receivables. The amount of the write-down is determined as the difference between the
asset's carrying amount and the present value of the estimated receivable.
Trade and other payables
Trade and other payables are initially measured at fair value, and are subsequently measured at amortized cost, using the effective
interest rate method.
Share capital
Ordinary shares are classified as equity. Equity instruments issued by Bango PLC are recorded at the proceeds received, net of direct
issue costs.
Share premium
Share premium represents the excess over nominal value of the fair value of consideration received for equity shares, net of expenses
of the share issue.
Retained earnings
Retained earnings include all current and prior period retained profits.
55 Bango PLC | Annual Report 2017
Notes to the financial statements
Notes to the financial statements
Related party transactions
There were no significant related party transactions in the year, see the Directors report for the Group for further details.
Intercompany loans existed between the entity and other members of the group, please see Note 5 for further details.
2 Directors, employees and key management personnel
Details of Directors’ interests in the shares and options of Bango PLC are provided in the Directors’ report on pages 18 and 19.
There are no employees employed directly by Bango PLC.
Details of Directors’ remuneration and key management personnel are disclosed in notes 12 and 13 of the Group accounts. A charge of
£105,797 (31 December 2016: £82,485) has been recognized within the parent company’s own figures relating to wages and salaries.
3 Auditor’s remuneration
The auditor’s remuneration for audit and non-audit services to Bango PLC was borne entirely by Bango.net Limited, a wholly owned
subsidiary.
4 Investments
Cost
Shares in subsidiary undertakings at 31 December 2016
Share based payments
Investment in Bango Payments Ltd
Shares in subsidiary undertakings at 31 December 2017
Net book amount
At 31 December 2017
At 31 December 2016
£
29,005,642
679,023
100
------------------------------
29,684,765
================
29,684,765
================
29,005,642
================
Fixed asset investments are shown at cost less provision for impairment.
Details of subsidiary undertakings at 31 December 2017 are as follows:
Class of
share capital
held
Country of
incorporation
Held by the
company
Nature of business
Bango.net Limited
England & Wales
Ordinary
100%
Development, marketing and
sale of technology for mobile
phone users to purchase services
for their mobile phones
Bango Movil
Spain
Ordinary
100%
Support for Bango.net Limited
Bango SP Limited
England & Wales
Ordinary
England & Wales
Ordinary
100%
100%
Non-trading
Non-trading
Bango Employee Benefits
Limited
Bango do Brasil Cessão de
Licenças de Programas de
Computador Ltda *
Bango Mobile Limited **
Bango Kabushiki Kaisha
Bango Holdings Inc
BilltoMobile Inc
Bango Inc
Brazil
Ordinary
100%
Non-trading
Nigeria
Japan
USA
USA
USA
Ordinary
Ordinary
Common
Common
Common
100%
100%
100%
100%
100%
Trading entity in Nigeria
Sales and support office for
Bango.net Limited
Holding company
Trading entity in USA
Sales and support office for
Bango.net Limited
Non-trading
Bango Payments Limited
*99% owned via Bango Movil and 1% owned by Bango Plc
**49% owned via Bango PLC, 51% owned by Bango.net Ltd (100% owned subsidiary of Bango PLC)
England & Wales
Ordinary
100%
Bango PLC | Annual Report 2017 56
Notes to the financial statements
Notes to the financial statements
5 Receivables
Amounts due from Group undertakings (due after one year)
Other receivables (due within one year)
31 Dec 2017
£
31 Dec 2016
£
17,209,241
27,721
-----------------------------
17,236,962
================
16,144,791
9,510
-----------------------------
16,154,301
================
Interest on intercompany loans from the parent company to the subsidiary undertakings are charged at a reasonable market rate of
interest, calculated monthly on the balance outstanding.
6 Payables
Trade payables
Accruals and deferred income
7 Financial assets and liabilities
Financial assets included in the balance sheet relate to the following IAS 39 categories:
Loans and receivables
Total financial assets
These financial assets are included in the balance sheet within the following headings:
Current assets
Other receivables
Non-Current assets
Amounts due from Group undertakings
Total financial assets
Financial liabilities measured at amortized cost
Total financial liabilities
These financial liabilities are included in the balance sheet within the following headings:
Current liabilities
Trade payables
Accruals
Total financial liabilities
31 Dec 2017
£
31 Dec 2016
£
8,148
8,559
-----------------------------
16,707
9,884
9,698
-----------------------------
19,582
================ ================
31 Dec 2017
£
31 Dec 2016
£
17,209,241
-----------------------------
17,209,241
16,144,791
-----------------------------
16,144,791
================ ================
31 Dec 2017
£
31 Dec 2016
£
-
-
17,209,241
-----------------------------
17,209,241
16,144,791
-----------------------------
16,144,791
================ ================
31 Dec 2017
£
31 Dec 2016
£
16,707
-----------------------------
16,707
19,582
-----------------------------
19,582
================ ================
31 Dec 2017
£
31 Dec 2016
£
8,148
8,559
-----------------------------
16,707
9,884
9,698
-----------------------------
19,582
================ ================
57 Bango PLC | Annual Report 2017
Notes to the financial statements
Notes to the financial statements
8 Share capital
Allotted, called up and fully paid:
Ordinary shares of 20p each in Bango PLC
No
£
As at 31 December 2015
Issue of new shares
Exercise of share options
As at 31 December 2016
Exercise of share options
As at 31 December 2017
64,431,751
-----------------------------
586,095
127,772
-----------------------------
65,145,618
-----------------------------
1,277,185
-------------------------
66,422,803
12,886,350
-----------------------------
117,219
25,555
-----------------------------
13,029,124
-----------------------------
255,437
-------------------------
13,284,561
================ ================
During the year 1,277,185 share options were exercised at exercise prices between 23 pence and 232.5 pence and a par value of 20
pence per share. The total proceeds were £1.18m of which £0.26m was recognized as share capital and £0.92m as share premium.
During the year 1,226,000 options were granted to employees. Details of number of options granted to Directors is given in the
Directors report of the Group accounts.
At the year-end 4,079,616 options were outstanding. Further details relating to employee share options are provided in note 7 in the
Bango financial statements.
9 Reserves
At 1 January 2017
Exercise of share options
Share based payments
Loss for the year
At 31 December 2017
Share
Premium
Account
£
Retained
earnings
£
30,323,341
1,787,896
925,112
-
679,023
(94,913)
-
------------------------------ ---------------------------
2,372,006
================ ==============
31,248,453
An adjustment has been made out of the share based payment reserve for share options exercised in the year.
10 Reconciliation of movements in shareholder’s funds
Period opening balance
Exercise of share options
Share based payments
Issue of new shares
Expense of share issue
Loss for the period
11 Retained earnings
31 Dec 2017
£
31 Dec 2016
£
45,140,361
1,180,549
679,023
-
-
(94,913)
-----------------------
46,905,020
44,452,056
85,948
359,373
281,325
(2,668)
(35,673)
-----------------------
45,140,361
================ ================
The distributable reserves as at 31 December 2017 from Bango PLC are £747,368 (2016: £842,281).
Bango PLC | Annual Report 2017 58