Be where
you thrive
Bango Annual Report 2018
Contents
Strategic report
Bango at a glance......................................................................................................................................02
Chair’s statement..........................................................................................................................................04
CEO’s statement...........................................................................................................................................06
CFO’s statement...........................................................................................................................................08
Strategy for growth.......................................................................................................................................10
Principal risks and uncertainties...............................................................................................................11
Report of Directors
Directors...................................................................................................................................................14
Company information..................................................................................................................................16
Directors’ report..............................................................................................................................................17
Corporate governance report.................................................................................................................19
Audit committee report............................................................................................................................22
Remuneration committee report.............................................................................................................23
Financial statements
Independent auditor’s report to the members of Bango PLC (Bango)..................................25
Consolidated statement of financial position....................................................................................31
Consolidated statement of comprehensive income......................................................................29
Consolidated cash flow statement........................................................................................................33
Consolidated statement of changes in equity..................................................................................34
Notes to the financial statements..........................................................................................................35
Statement of financial position of Bango PLC………………….........................................................55
Cash flow statement of Bango PLC....…………………………………………………………………..............56
Statement of changes in equity of Bango PLC................................................................................57
Notes to the financial statements….....................................................................................................58
Notices
Notice of Annual General Meeting......................................................................................................62
Form of Proxy................................................................................................................................................65
Explanatory notes ......................................................................................................................................66
Bango PLC | Annual Report 2018
1
• End User Spend
(EUS)
increased 106% to £558.2m
(2017: £271.4m)
• Revenue increased 60% to
£6.62m (2017: £4.15m)
• Adjusted LBITDA* improved
to -£0.87m (2017: -£1.57m)
• Positive EBITDA for 4Q18
*Adjusted LBITDA is loss before interest, tax,
depreciation, amortization,
share based
payment charge and non-recurring items.
12
10
8
6
4
2
0
m
£
/
s
t
s
o
C
d
n
a
e
u
n
e
v
e
R
EUS, revenue and opex costs
m
£
/
S
U
E
600
500
400
300
200
100
0
2014
2015
2016
2017
2018
Operating costs
Revenue
End User Spend (EUS)
From mobile payments
to mobile commerce
To accelerate and underpin growth, Bango continues to expand the use of its global payment platform, using the unique insights into
consumer behavior gathered by the platform to grow payment volumes and improve user experience.
2
Bango PLC | Annual Report 2018
From mobile payments to
mobile commerce
App developers, stores and payment
providers cross the threshold into the
Bango ecosystem to converge, grow and
thrive.
By bringing businesses together and
powering e-commerce with unique
data-driven
insights, Bango delivers
new business opportunities and new
dimensions of growth
for customers
around the world. Being inside the Bango
circle means global merchants including
Amazon, Google and Microsoft can work
together with payment partners from
Africa to the Americas, accelerating the
performance of everyone on the inside.
Bango. Think inside the circle.
The Bango strategy is to find new ways
to monetize payment data, which in turn
attracts more payment providers – such
as mobile operators - to cross over to the
Bango Platform, bringing more EUS and
more data.
Global merchants continue to expand
their use of the Bango Platform, benefiting
from the unique insights into consumer
behavior gathered by the platform to
grow payment volumes and improve user
experience. In 2018, the newly launched
Bango Marketplace made the power of
the platform available to app developers
for the first time. The data gathered during
payment activity boosts the success of
merchant marketing, which in turn drives
more payments.
Consumer spending on apps and digital
content continues to grow rapidly. Phone
users spent over $100B in app stores in
2018, and app developers around $50Bn
in marketing to grow their businesses.
For Bango, with its unique new product
to improve marketing efficiency, there
is a large and strategically valuable
opportunity to become the place where
developers and payment providers
connect and thrive.
Bango won the award for the ‘Most
Innovative DCB Technology’ at the
Global Direct Carrier Billing Awards 2017.
Bango PLC | Annual Report 2018
3
Chair’s statement
2018 was a real step forward for the Bango
virtuous circle strategy – which uses the
data gained from processing payment
transactions to drive revenue growth and
make app developer marketing more
productive.
into
The payment business moved
profitability in 4Q18, and transaction
volumes continued
to accelerate –
providing a solid foundation for expansion
of the data monetization part of the
strategy.
The acquisition of Audiens Srl., supported
by shareholders, along with
intense
product development effort allowed
Bango to bring forward the roll out
of its product for app developers by
about 12 months – launching as Bango
Marketplace at the end of 2018.
With new ways for payment partners
to monetize data, the Bango Platform
becomes more compelling to payment
providers, which is why management
is confident of migrating an increasing
number of mobile operators to the Bango
Platform and bringing their associated
payment transactions – expressed as
EUS – into the data pool.
Consumer
spending on apps and
digital content continues to grow rapidly.
Smartphone users spent over $100B on
apps in 2018, driven by app developer
marketing spend of around $50B. For
Bango, with its unique and innovative new
product to improve marketing efficiency,
there is a large and strategically valuable
opportunity to provide the place where
developers and payment providers thrive
together.
The prospects are very exciting. The Board
supports management’s investment into
expanding this new revenue stream for
Bango in 2019 and beyond, alongside
continuous growth from the payments
business.
The Bango Board was strengthened at
the end of 2018 by the addition of non-
executive director Nancy Cruickshank and
CFO Carolyn Rand. Martin Rigby, having
contributed substantially to the growth
of Bango as Non-Executive Director over
more than 9 years will retire at the May
2019 AGM in line with good corporate
governance. I thank Martin for his valuable
service.
David Sear
Chair
Bango expands carrier billing in key
Android growth regions
Includes first Google Play Direct
Carrier Billing in South America
with Entel Chile, more routes in
Africa
Through the Bango Platform, millions of
Entel subscribers in Chile are now able to
pay using their phone bill for the massive
array of content and services sold in
Google Play, including Minecraft, Tinder
and Google Play Music. Pre and post-
paid subscribers can simply click-to-buy
using carrier billing, placing the charge on
their Entel phone bill. This is the first Direct
Carrier Billing launch for Google Play
within South America. It follows the first
Direct Carrier Billing launch for Google
Play across all Latin America with AT&T
Mexico in 2015, also through the Bango
Platform.
Bango expanded coverage in Africa,
region dominated by Android
a
smartphones, with the launches of Google
Play DCB in Ghana and Tanzania, adding
to South Africa and Nigeria.
With over 1 billion monthly active users
and 94 billion app installs in 2017, Google
Play is the leading global app store
pre-installed on all Android devices.
Combining the reach of Google Play,
with the enhanced billing performance
delivered by the Bango Platform, gives
subscribers the best payment experience
available.
4
Bango PLC | Annual Report 2018
Bango Marketplace launch
return. In addition, Bango can identify
users with a propensity to spend, even if
they have not made an in app purchase
before.
launched
Bango Marketplace
in
December 2018, bringing together the
marketing power of the world’s top app
developers with the payment reach of
MNOs. Using data insights produced from
the Bango Platform, app developers and
MNOs come together to acquire more
users and increase revenues.
spend 30%
App developers
(and
sometimes more) of their net app store
revenues on marketing, to find new users,
increase download and installs, and
generate more spending in apps. App
developers generate 5x more revenue
from in-app purchases than from in-
app advertising, but only about 5% of
all users purchase. Finding these users is
a “holy grail” of app marketing. Bango
Marketplace enables developers to direct
their marketing towards selected customer
audiences that are more likely to respond,
so their marketing money gets a better
App developers thrive with Bango
Smule, developer of the world’s most
popular karaoke app, ran user acquisition
campaigns in Indonesia targeted using
from Bango Marketplace.
audiences
Smule partnered with multiple Indonesian
operators to target high spending users
with a VIP product offer. Bango created
segments,
and activated
the data
Consequently,
which Smule applied to their marketing
audiences.
Smule
measured substantial increase in the
conversion rate of free to paying users as
a result of their campaign.
•
•
•
targeting of offer using
data
customer
Tighter
Bango-enabled
segment
Significant increase in click-through
rate
Significantly higher conversion to
paying customers compared with
campaigns that were not targeted
using Bango provided audiences
Audiens acquisition and integration
In January 2018, Bango acquired Audiens,
a leading mobile data exchange platform,
to speed up the launch of the Bango data
business. The combination of Audiens
marketing technology and market know-
how, with the Bango Platform, creates
new growth opportunities for developers,
merchants, stores and operators.
Bango uses technology from derived from
the Audiens Customer Data Platform to
create segments and to feed them to
developer marketing platforms, such as
Facebook, Google, Oath, The Trade Desk
and other places where they can be easily
applied by app developer marketing
teams. Using Bango Marketplace, app
developers can now quickly and easily
focus their marketing towards higher
value customer segments, across a wide
range of global markets. This focus
increases the effectiveness of marketing
spend significantly, and makes the Bango
data insights very valuable.
Bango PLC | Annual Report 2018
5
CEO’s statement
Payment platform growth
In 2018, and for the fourth consecutive
year, EUS more than doubled through
growth
in existing activations, and
additional EUS from new activations
in the year. Bango delivered growth for
all major partners connected to Bango,
including Google Play, Amazon, Microsoft
and other streaming video and audio
merchants.
Transaction volume growth was generated
from existing customers, new customers,
new content types from existing customers
and new payment routes. The strong and
profitable payment business is providing
the foundation for Bango as it develops
compelling and valuable new market
opportunities around the monetization of
this growing data asset.
During 2018 Bango continued to invest
in its core platform technology. Parts of
the platform were moved to the cloud to
enable smooth processing during very
high spikes of traffic without extra cost
in Bango datacenters. New technology
to streamline the transfer of routes
from direct connections or alternative
suppliers over to the Bango Platform was
developed, and new tools developed that
allow customers to self-manage their
use of the Bango Platform to reduce
dependencies on the Bango operations
teams.
To accelerate and underpin growth,
Bango continues sales and marketing
activity to add new customers, open routes
throughout new mobile operators and to
expand the use of the Bango Platform.
The unique
into consumer
behavior gathered by the platform enable
customers to grow payment volumes and
improve user experience.
insights
The capacity of the platform is now
regularly tested to rates in excess of £10B/
yr of EUS, and to hundreds of transactions
per second. There is always substantial
capacity headroom in the platform to
handle sudden surges in volume and
ensure that Bango can support the growth
ambitions of its partners. Bango continues
6
to invest in new developments by the
R&D team to ensure that existing direct
Google Play routes can be upgraded
faster to the Bango Platform to bring the
billions of dollars of EUS that are in the
migration pipeline across many territories
throughout the Bango Platform in coming
years.
Boosting mobile commerce
with payment data
The Bango
to gather
strategy
anonymized data from payment activity
and payment partners and to use this
data to improve the success of merchants,
which in turn drives more payments and
success for partners.
is
technology and
Early in 2018 Bango acquired Audiens,
gaining valuable
its
important business
relationships with
trusted marketing partners Google,
Facebook, Oath and other global
marketing businesses. Along with product
development at Bango, this enabled
Bango to open the unique capabilities
of the Bango Platform to an entirely
new range of customers. App developers
can now focus their campaigns towards
audiences that have specific payment
histories or characteristics. In addition to
using Bango to process their payments,
Bango makes marketing more efficient
and effective for app developers.
The additional market opportunity for
Bango is large. By leveraging a powerful
technology platform and the expanding
relationships with Google and Facebook
to reach large volumes of customers in an
efficient way, the base is established for a
substantial new revenue stream.
In December 2018 Bango
launched
Bango Marketplace – an online portal
at bango.com which makes the value
of Bango generated audiences more
easily available to app developers. The
launch followed a very successful Bango
organized pre-launch event in Jakarta,
Indonesia at which mobile operators
confirmed their desire to collaborate
with app developers using the Bango
Platform. A similar event was organized
for the Game Developer Conference in
March 2018 in San Francisco, California.
for
The business model
the data
business is to create country specific
audiences comprised of different types
of pay capable or pay proven users.
These audiences may be used by app
developers during
their marketing
campaigns for specific time periods –
for example 14 days. The audiences may
only be used through trusted, opted-in,
marketing platforms such as Facebook or
YouTube, so there is no access to the data
itself by the app developers. The benefit
of this model is that the data provider –
typically a mobile operator – shares in
the revenue generated by Bango, under
a supplier agreement which is available
to all mobile operators integrated with
the Bango Platform. Although at an early
stage in its evolution, Bango expects to
deliver 20-50% of Bango Marketplace
audience usage revenues to data suppliers
– making the Bango Platform even more
attractive to payment providers.
Bango increased sales and marketing
activity in Japan, Korea, China, USA and
Europe to ensure rapid adoption of Bango
Marketplace by leading app developers.
As the leaders thrive by crossing the
threshold into the Bango circle, smaller
app developers are expected to follow
using the self-serve tools in the Bango
Marketplace.
Visit bango.com/marketplace
Data
technology and
Customer
Audiens
Platform (CDP)
Bango acquired Audiens for its innovative
core
its established
integrations with the major marketing
platforms. With Bango as a demanding
user of the technology, and by leveraging
other Bango technology and assets, the
Audiens Customer Data Platform (CDP),
which is sold on a Software as a service
(SaaS) model, has become stronger
and even more secure under Bango
stewardship.
Bango PLC | Annual Report 2018 Building on its strong start in Italy, and
continuing partnership with DigiTouch,
Bango introduced the Audiens CDP to a
global market. With new customer wins
for Audiens CDP and a good pipeline of
opportunities alongside the core Bango
app developer focus, the Audiens team is
ahead of plan, and looking forward to a
successful 2019.
The Audiens CDP
team maintains
separate identity at audiens.com and
Bango has relocated the team to its own
new office in Milan, Italy to ensure the
CDP opportunity is fully exploited.
Strengthening the Bango team
The Bango team has been strengthened
in 2018, to ensure momentum is maintained
and growth in existing and new business
can be driven effectively.
A new CFO with significant global, public
company, managerial and high growth
experience was appointed at the end
of 2018 in preparation for high growth
from both existing and new business. A
product marketing leader with experience
at Amazon was brought in to drive Bango
Marketplace and a senior sales leader
from Visa, Mastercard and Docomo joined
to head up business development. A very
experienced new COO – who started in
March 2019 – joined Bango from a CEO
role in successful Nokia subsidiary.
The Board was also strengthened by
bringing in a Non-Executive Director from
the digital media, data, consumer space
to ensure Bango can see its opportunities
from a data perspective.
Brand repositioning
The Bango Platform has established a
strong reputation for using alternative
payment methods such as Direct Carrier
Billing (DCB) to reach more users and
for generating more revenue than other
solutions. With the arrival of Bango
Marketplace, mobile operators
can
now access the huge potential beyond
payment processing and developers. App
developers have had their eyes opened
to a radical new way of improving their
marketing using audiences defined by
payment characteristics.
repositioned
To reflect this new dimension of thinking
and the way businesses can easily cross
into the Bango ecosystem and thrive,
its brand and
Bango
developed a whole new way to express
the benefits and values of Bango. The
new brand was previewed to investors at
the annual Strategy Day in January 2019,
and officially launched at Mobile World
Congress a few weeks later.
The new branding has provoked
discussion with people who thought they
already knew Bango and now see how
Bango can do much more for them.
Outlook
The payment business is thriving, growing
and moved into profit at the end of the
year. Bango is entering a phase where
strong execution for existing partners
will deliver continued growth. Costs
associated with this business are stable
and huge capacity is already installed
to accommodate continued exponential
growth.
the
In parallel,
launch of Bango
Marketplace and the big benefits it brings
to existing and new customers sets the
scene for a stronger competitive position
in the payment business, and opportunity
to gain access to a share of the $50Bn
spent every year by app developers on
app marketing.
In 2019 Bango has two main areas of
focus:
secure
Bango
• Growth of EUS through the reliable
and
Platform,
expecting to achieve EUS growth in
excess of 100% year-on-year. Bango
expects to migrate over more routes
and enable new global brands and
commerce types to thrive on the
Bango Platform. There is a strong
pipeline of operators that can bring
billions of dollars of EUS when they
upgrade to Bango and gain new
revenues for themselves.
• Gaining significant new revenue from
the $50Bn app developers spend on
app marketing by offering access to
valuable audiences through Bango
Marketplace. This additional revenue
stream is expected to drive further
growth in the payments business as
partners become increasingly aware
that by processing payments through
Bango, they can also drive revenue
from the data collected.
During 2018 additional operational
expenditure was incurred to add the
Audiens team in Milan and to establish
a small data monetization linked sales
and marketing team.. Further targeted
expenditure
the data
to maximize
opportunity is being incurred in 2019.
With the growing high margin revenues
and stable expenses of its payment
platform, Bango expects to generate
sufficient cash
the
operational costs of the business and
this continued
in product
development in the coming year.
to cover both
investment
The team at Bango is looking forward to
further growth and providing a unique
ecosystem in which businesses can thrive.
Ray Anderson
CEO
Visit Bango Investor online:
bangoinvestor.com
Bango PLC | Annual Report 2018
7
CFO’s statement
Bango business model
Bango now provides financial reporting
of two synergistic lines of business. The
payments business processes payment
transactions through the Bango Platform
for the world’s leading online digital and
physical merchants. The data business
facilitates the monetization of valuable
data collected by payment providers and
mobile operators to enable more efficient
marketing by app developers.
End User Spend (EUS)
EUS is the total sales processed through
the Bango Platform excluding taxes. EUS
shows the growth of mobile commerce
through the Bango Platform. It is the most
significant Key Performance
Indicator
that management uses to measure the
development of the business and the
continued success of Bango customers
and partners. More EUS means more
transactions and more payment data – a
key factor in driving competitive edge for
Bango.
In 2018 EUS increased 106% to £558.2m
from £271.4m in 2017, due to growth from
existing activations and additional EUS
from new activations in the year. Bango
continues to drive increasing transaction
volumes at low fixed cost to grow Bango
revenue and profit in 2018 and beyond.
Revenue
Bango earns payment revenue from every
transaction processed through the Bango
Platform. Revenue is either a fee based on
the value of the transaction or a fixed fee
per transaction. Each additional sale by a
merchant using the Bango Platform adds
to EUS and increased revenue.
Bango earns data revenue either as a
percentage of the fee that a data owner
earns by selling their anonymized data
audiences through Bango to merchants or
other advertisers, or as a monthly fee for
using the Bango Audiens CDP to create
data audiences they exploit themselves.
Bango earns other fees, such as integration
fees, which are recognized on completion
of the contracted milestones. This revenue
relates to payments by merchants or
mobile operators for upgrades to the
Bango Platform.
From January 2018, where payment is
collected for a service lasting 12 months,
for example a streaming service, revenues
and EUS are recognized evenly over
the life of the subscription in line with
accounting standard IFRS 15. Previously
it was recognized at the point the
payment transaction succeeded. With the
launch of streaming services through the
Bango Platform, recurring revenues on a
subscription model are increasing rapidly.
Other than adjusting for IFRS 15, revenue
generated from EUS is accounted for
using the same method as in 2017 and
increased 26% to £5.25m from £4.15m
in 2017. The growth in EUS has led to
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.
Revenue of £1.37m was generated
from data activity in 2018. Revenue was
generated from monthly fees and by
third parties monetizing their data by
using Bango technology to segment their
data and sell it through Bango enabled
channels. The revenue recognized
is
the value of the data sold through the
channels.
Costs of sales in the segmental reporting
in 2018 of £0.8m relates to any fee charged
by the data owners or by the marketing
channel for use of the data. There was
no cost of sales related to the Bango
Platform Payment activity in 2018.
Acquisition of Audiens S.R.L.
On 23 January 2018, Bango purchased
98.45% of Audiens S.R.L. from Digitouch
S.p.A, for an initial consideration of
€1.48m in cash and €0.63m paid in cash
during 2018. Bango also issued 521,803
new Bango shares to the vendors of
Audiens and 738,399 warrants over new
End User Spend (EUS)
600
M
£
500
400
300
200
100
0
8
2014
2015
2016
2017
2018
Bango PLC | Annual Report 2018 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.
There is already significant monetizable
data in the Bango Platform due to historic
EUS to support growth of data revenues.
As Bango EUS grows in 2019, the volume
of data in the Bango Platform will
increase and therefore, the revenue from
the Bango data opportunity is expected
to increase further.
Costs
Bango group administrative costs of
£6.7m, (FY 2017, £5.7m) was in line with
forecasts and includes the Data Business.
The whole Bango group was EBITDA
positive in 4Q18. The Bango Platform can
process EUS at many times current levels
with no additional operational cost.
The Bango data business is not yet
EBITDA positive, but it is expected to
become EBITDA positive in the next 12
months based on existing sales and on
the roadmap of future sales. Bango has
invested in legal and security reviews to
support the growth of this business in
relation to national regulations such as
GDPR and personal information security.
Bango R&D has securely integrated the
the Bango
Audiens
technology
into
Platform and provided
technology
stewardship to ensure the Audiens CDP
meets the high standards demanded by
the leaders in the industry.
The share-based payment charge for
2018 was £1.03m (2017: £0.68m) calculated
using the Black-Scholes model. It relates
to the Bango share option program that
enables all Bango employees to share in
the growing value of Bango. It is a vital
recruitment and retention tool in a highly
competitive employment market.
Amortization of intangible assets in the
year was £1.35m (2017: amortization and
impairment £1.40m) as R&D projects
capitalized in prior years were deployed.
Depreciation for the year totaled £0.27m
(2017: £0.19m) reflecting the fixed asset
additions in the year.
Statement of financial position
Net assets at 31 December 2018 were
£16.0m (31 December 2017: £10.7m).
in
investment
Cash balances at 31 December 2018
decreased by £1.0m to £3.8m (at 31
December 2017: £4.8m), as a result
of
the new business
and products. With a highly scalable
operating platform and growing EUS
leading to increased revenue. As part of
the acquisition of Audiens, Bango raised
£5m (£4.6m net of fees) both to acquire
and integrate Audiens and to invest in the
development of Bango data technology
and business.
Intangible assets £11.9m (2017: £6.1m)
increased
include acquired goodwill as well as
internally developed capitalized R&D.
Intangible assets relating to capitalized
to £5.8m,
internal R&D
following additional investment in the
Bango Platform and Bango Marketplace
(31 December 2017: £4.0m). Internally
generated R&D is amortized over 5 years
with projects assessed in relation to their
individual cash generation ability.
Total borrowings at 31 December 2018
were £0.3m (31 December 2017: £0.3m)
and consist of finance lease liabilities
used to purchase computer equipment
and software.
Going concern
As Bango continues to grow its EUS and
revenue in 2019 in line with prior year
trends, cash consumption will reduce
on a stable cost basis. With cash at the
year-end of £3.8m, the Board believes
there is sufficient cash in place to see
the business through to cash breakeven
and profitability. Based on the growth
of the business and controlled cash, and
with further growth in revenue expected
in FY2019 and beyond, Bango will have
sufficient cash resources to support both
planned investments to grow sales, and
to develop new products to ensure Bango
has a strong pipeline of upgrades and
can process hundreds of millions more
EUS in the near future.
Carolyn Rand
CFO
Bango PLC | Annual Report 2018
9
Visit Bango Investor online:
bangoinvestor.com
Strategy for growth
The Bango growth strategy is to use
the data generated
from payment
transactions to increase app developer
marketing success, driving more payments
and more revenues for all parties in the
Bango circle.
The success of the Bango circle, in which
online businesses converge, grow and
thrive, attracts more customers who want
to benefit from this momentum. As more
customers bring more business into the
circle, the value of the Bango Platform
increases for everyone, opening-up new
markets and increasing the opportunities
available to these partners.
Grow customer base
Bango works closely with the world’s
largest
internet businesses, such as
Google, Amazon, Facebook and Microsoft
to ensure they and their customers and
partners benefit from Bango technology
and the Bango circle.
Larger businesses move slowly but make
changes that Bango accommodates to
keep its other customers and partners
thriving. Strong relationships built over
many years with these larger players
ensure that Bango can align its product
evolution and positioning with their plans
and aspirations. By providing Bango
technology through a platform offering,
all customers benefit from the evolving
features and
technology, and new
functions. New customers are attracted by
the strong product roadmap and benefit
from the industry trends enabled through
the Bango Platform.
Process increasing volumes of
payments
The Bango Platform is used by leading
online commerce businesses to process
their customer payments on a global scale.
These businesses contract with payment
processors - such as Mobile Network
Operators - and use the Bango Platform
to activate new forms of payment such as
Direct Carrier Billing and mobile wallets.
Bango processes hundreds of millions of
transactions a year, including payments
for physical and digital goods, and from
10
the resale of digital services. As Bango
partners expand their relationship, into
new markets, and offer new products and
services, transaction volumes increase.
New partners are attracted by the success
of existing partners and the opportunity
to capitalize on the payment insights
available through the Bango Platform.
The technology architecture needed to
accommodate this high growth strategy
must be highly scalable, very robust
and yet operate at a low and stable
cost. Bango therefore needs to ensure
its systems, software and expertise are
well designed and can be operated and
evolved at low cost.
of
payment
Analysis
transactions
The high volume of transactions the Bango
Platform processes every year generate a
vast pool of consumer payments data.
Bango systems collect and organize
this data securely and reliably, and are
designed to assure privacy. Payment
transactions generate valuable payment
insights that help merchants serve their
customers better, and give developers
unique information to boost the revenue
from products and services offered online.
regulations. With
A strategic challenge is to ensure that the
analysis of data, and the preparation of
insights and audiences meets evolving
data
its heritage
of billing grade privacy and security,
and by collaborating closely with its
partners, Bango ensures that it has the
architectural flexibility and systems in
place to accommodate current and future
requirements. Recent developments such
as GDPR and AB375 are beneficial as
they codify the operating regulations and
reduce uncertainty in the market.
is
Audience sales
to monetize
The Bango strategy
data collected from payment providers,
to improve app developer marketing
effectiveness, drive up payment volumes,
and to generate additional revenues
for the payment processors. The Bango
Platform creates audiences from payment
transaction and MNO data, offering
them through Bango Marketplace. These
unique audiences, derived from payment
insights, are proven to increase conversion
rates and provide a higher return on
app developer marketing
investment.
More effective marketing also generates
increased transactional volumes, which in
turn produce more data insights.
Bango expects that its strategy will deliver
a substantially larger number of customers
to the Bango Platform than current
or historic levels. Bango has acquired
the skills and processes to engage a
much larger number of customers than
previously, enabling significant scale
through Bango Marketplace. To do this,
Bango must attract and retain a small
number of employees with the necessary
skills and experience. Therefore Bango
has to continue to be a great place to
work, and Bango must continue to deploy
and develop its SPIRIT values to support
the aspirations of talented employees.
Bango PLC | Annual Report 2018
Key Performance Indicators (KPIs)
End User Spend (EUS)
This is the key metric to measure the
growth and success of the Bango Platform.
It is the total value of all sales processed
through the Bango Platform, excluding
VAT or sales taxes. Bango closely monitors
EUS growth and forecasts, to ensure that
there remains significant capacity 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 currently using cash for cost and
investment faster than it generates from
its activities, it is important that major
stakeholders, particularly key customers,
have comfort that Bango has sufficient
cash resources to continue trading and to
invest in research and development.
Revenue
Bango Platform revenue is the sum of all
the fees charged across merchants for
connection. Bango receives a fee from
every transaction through the platform
which varies by market and volume of
transactions. Bango continue to recognize
EUS revenue at the point in time that the
transaction is completed
Bango data activity revenue is the sum of
revenues charged when Bango provides
data segments or
licences platform
access to merchants or other advertisers.
The transaction price for data activity is
clearly defined in contracts and is either
one off or monthly fees.
These two streams have changed in 2018
following the acquisition of Audiens SRL.
Non-financial KPIs
These are monitored monthly by the
Board and key management, and include
business forecasts from key partners, sales
pipelines for mobile operator upgrades,
app developer audience sales pipelines,
number of app developers registered
in Bango Marketplace and employee
engagement. All these indicators align
towards growing market share and EUS.
Net profit
These are monitored monthly by the
Board and key management. Bango is a
highly scalable platform that can handle
huge additional volumes of EUS without
increasing processing
costs. Bango
continues
reduce operating costs
to
to drive up profitability of operations.
Investment in sales and development for
revenue growth on the highly leveraged
platform will
to profitability.
lead
Management review the platform costs
to ensure they are stable. Management
closely review the investment in our new
technology development and sales.
Principal risks and uncertainties
Risk management policies and procedures
Risks and uncertainties are scrutinized and monitored by the Board on an ongoing basis. The Board is supported in this vital task by the
Company Secretary, Bango’s solicitors, auditors and insurance brokers.
Risk is formally audited every year as
a part of the standard audit process,
and the CFO and Company Secretary
undertake an annual review of risks and
insurance
uncertainties with Bango’s
brokers during the insurance renewal
process.
meetings. These are scrutinized for issues
of risk, and relevant experts report and
present to the Board on a regular basis.
Where risk concerns arise, the Board is
kept informed by the Executive Directors
or Company Secretary, which supports
and advises as required.
The Board’s monthly meetings are the
main forum for the discussion of risk by
the Board. Management reports are
delivered to the Board in advance of their
Bango has a formal risk management
policy and risk register which are both
proactively maintained.
The Bango Board and key management
personnel regularly review known and
potential risks and assess the processes
and controls that have been put in place
to mitigate them. The implementation
of risk management is delegated to
the Bango leadership team and key
management personnel.
Bango has
following
identified
financial and operational risks to which it
is exposed through its business activities.
the
Bango PLC | Annual Report 2018
11
liquidity
Liquidity risk and going concern
is
Bango ensures sufficient
available to meet foreseeable needs and
invests in cash assets safely and profitably.
See note 20 for further information.
Due to the nature of the business with
long term relationships with operators
and merchants, Bango does not have
significant issues with bad debt and
therefore the impact on Bango’s liquidity
is low. The Board review a detailed cash
flow forecast to ensure that there is
sufficient cash to 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
and skills. Bango puts significant effort
into providing an excellent working
environment and benefits, including 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 Group’s 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 being
largely offset. See note 21 for further
information. Regular
the
impact of dramatic currency swings are
undertaken to plan against any significant
risks to Bango if these were to happen. No
forward exchange or other such financial
instruments have been used in the year.
reviews of
Personal data risk
to
Bango processes data belonging
customers and
(some of
which may be very sensitive) as part
individuals
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.
Security risk
Bango undertakes an annual external
security risk assessment covering sensitive
assets, the protection of assets, and
consequences for the loss or compromise
of data. The
review also considers
breaches of legislation and regulation,
and reviews the Bango risk register. The
cyber essentials framework is used, with
additional requirements from a major
partner. Recommendations are brought
to the attention of the Board, prioritized
and actioned.
Data risk
Bango processes data belonging to
customers and individuals as part of its
business. There is a risk that such data
could become public if there were a failure
of systems or security. Policies, systems and
procedures have been implemented, and
products developed, with privacy in mind,
to minimize risk to all. 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. A data
breach register is maintained and kept up
to date.
Technology risk
Bango EUS is dependent on its technology
keeping pace with developments
in
internet, mobile and payment technology.
Bango manages this risk with a continued
investment in Research and Development
(R&D), combined with regular technology
trading partners and
reviews with
sector specialists to ensure that 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 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.
EU related uncertainty
Bango leadership maintains an eagle eye
on EU related activity. The benefits and
drawbacks of exiting the EU, remaining in
the EU or in limbo have been evaluated
and are expected to be manageable or
insignificant.
Gender of Directors and senior managers
Bango has six Directors, three identify as male, two as non-binary and one as female. There are thirteen other key management personnel
of which nine identify as male, three as female and one as non-binary.
The strategic report which incorporates pages 3 to 11 was approved by the Board of Directors, and signed on its behalf by:
Ray Anderson
CEO
12
Bango PLC | Annual Report 2018
Bango Nexus in SE Asia
Creating profitable developer and operator partnerships
Google, Indonesian mobile operators
and leading developers attend Bango
event to accelerate their success
Bango hosted an exclusive event for mobile
operators and leading app developers
at The Ritz Carlton, Jakarta, Indonesia,
in October 2018. Part of Bango’s long
running Nexus series, the event gathered
leaders in mobile commerce to make new
connections, share ideas, and ultimately
help partners thrive through creating
profitable developer and operator
partnerships.
Focused on
how operators and
developers can amplify success by
partnering for marketing activities, Bango
Nexus Jakarta welcomed attendees from
Google, Indonesian operators Telkomsel,
XL, Indosat, Smartfren, US app developer
Smule, and numerous leading Indonesian
developers.
Bango shared details of how developers
and mobile operators can partner,
applying unique Bango Platform data
to maximize customer acquisition and
through marketing
revenue growth
campaigns. Smule, publisher of a popular
karaoke app, shared the success they’re
seeing, giving a case study of campaigns
run with Indonesian operators, targeting
high spending users, which saw a
significant increase in the conversion from
non-paying to paying users.
Bango is hosting the next event for
Mobile Network Operators and leading
app developers in San Francisco on 19
March 2019, to coincide with the Game
Developers Conference (GDC).
Senior hires as Bango expands mobile
commerce partnerships
New additions
to global business
development, product and delivery teams
the Bango commerce
strengthened
in 2018. Key hires support
business
customers’ growth objectives and deliver
on the unique opportunities enabled by
the success of the Bango Platform.
Paul Larbey – COO
As Bango expands its payments business
to a broader mobile commerce platform
offering, and engages directly with app
developers, Paul Larbey has joined Bango
as Chief Operating Officer, with official
start on 1 March, to ensure that Bango
continues to deliver on the rapidly growth
in customer engagement with the Bango
Platform.
Paul joins in a newly created leadership
role to drive the execution of ambitious
growth plans at Bango. Paul will be
directly responsible for the Operations,
Customer Delivery and Customer Success
teams, to scale the newly launched Bango
Marketplace product.
Akitsugu Matsushima – Director
Business Development APAC
Google Play developers are using the
Bango Platform to increase sales and
customer acquisition by activating the
valuable data from mobile operators that
partner with Bango. Akitsugu Matsushima
joins the Bango team in Tokyo from a role
managing app developer recruitment for
the Huawei app store.
Guy Singh – VP Product Marketing
To accelerate adoption of Bango
Marketplace through global partnerships,
Guy Singh joined Bango to lead product
marketing. Guy held roles at Amazon
and Vodafone, and has focused on go-
to-market strategies, product proposition
and driving sales growth during his career
in technology.
joins Bango
Kaushik Sthankiya – Senior Vice
President Business Development
To support growth – particularly across
Asia, Africa and the Americas – Kaushik
in October
Sthankiya
as Senior Vice President Business
Development. Kaushik will lead the global
team that works with partners as they
expand payments coverage and increase
marketing and acquisition activities
worldwide, moving from a similar role at
Docomo Digital.
Bango PLC | Annual Report 2018
13
Directors
Ray Anderson
Chief Executive Officer
Anil Malhotra
Chief Marketing Officer
Ray has over 30 years experience in
starting, growing and selling businesses.
He was named ‘Business Person of the
Year’ in 2012. Ray co-founded Bango in
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 to
Bango Ray established IXI which created
the industry standard network GUI –
X.desktop. IXI was an early leader in the
creation of the web. It sponsored the first
ever WWW conference at CERN and
shipped the world’s first commercial web
browser.
Anil is responsible for Bango’s global
marketing activities and partnerships with
app store, OEMs and global network
operators. Anil has extensive experience of
creating successful partnerships between
fast-moving innovators and major market
players. Before co-founding Bango,
Anil developed global partnerships for
Cyberlife Technology, one of Europe’s
leading computer games
technology
developers, which resulted in the licensing
of the company’s
‘AI technology to
the world’s leading games publishers
including Warner and Hasbro. Before that
he worked with Bango CEO Ray Anderson
at IXI, establishing a technology called
X.desktop as the global user interface
standard for networked computers.
Carolyn Rand
Chief Financial Officer
and
functions
commercial
Carolyn is responsible for overall financial
management of Bango, for corporate
financial
financial
relationships with Bango partners. The
global reach of Bango requires a wide
range of financial models, Carolyn ensures
the smooth running of the team delivering
this
flexibility. Carolyn
has responsibility for innovation and
management in critical finance functions,
and is closely involved in budgeting,
forecasting and monitoring the projected
performance of Bango. Carolyn works
with product development to ensure the
Bango Platform can scale and handle
complex requirements. Experienced in
CFO roles at fast growing technology
businesses and public
companies,
Carolyn is accomplished at maintaining
tight financial control and driving
profitability in global businesses. Before
joining Bango Carolyn held executive
roles at, Zinwave, Isogenica, Birdlife and
Sepura PLC. Carolyn is a Fellow and Chair
for Chartered Institute of Management
Accountants East Midlands and East
Anglia Region and Chair for the Institute
of Directors Cambridgeshire Region.
David Sear
Chairman and Non-executive
Director
David has been an entrepreneur and
investor in FinTech companies for the last
two decades. He is currently Chairman of
IXARIS (a virtual card issuer) and Semafone,
a payments technology business which
protects consumer privacy. He is also a
non-executive Director of Planet 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.
14
Bango PLC | Annual Report 2018
Nancy Cruickshank
Non-Executive Director
Nancy is a serial technology entrepreneur
& NED. She presently leads a Digital
Business
Transformation programme
at Carlsberg group, as a member of
its Executive team. Her last startup,
MyShowcase, was named by the Sunday
Times as one of the 15 fastest-growing
start-ups in the UK in 2016. The business
was acquired by Miroma Group in Feb
2018. Nancy is also a NED at OnMobile
(US$100m turnover, listed in India). She
chairs the Nomination and Compensation
committee at OnMobile and is a member
of the Risk & CSR committees. From 2012-
16, Nancy was a NED at TelecityGroup
[FTSE 250], one of Europe’s most successful
technologies companies, with data centres
in 14 European markets. The business was
sold to Equinix for £2.35bn in January 2016.
Nancy has worked in the digital industry
for over 20 years, including launching
Conde Nast online in 1996, overseeing
Telegraph Media Group’s Digital business
and developing the Fashion & Beauty
market leader, Handbag.com between
2001- 2006, leading to a successful sale to
Hearst Corporation in 2006.
Gianluca D’Agostino
Non-Executive Director
Gianluca is an Angel investor and pioneer
in the mobile industry. He has 25 years’
experience of founding, growing and
investing in international mobile content
and payment businesses. Gianluca has
a Non-Executive role on the OnMobile
Global Ltd and on Coolgames BV
boards. As CEO, he grew the OnMobile
business organically and via M&A to
become a leading mobile monetization
enabler across Europe and Latam. 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
Momentum Man of the Year’ in 2011.
Martin Rigby
Non-executive Director
Martin Rigby is founder and managing
director of ET Capital, an early investor
in Bango, which has managed a series
of venture funds investing in innovative
technology. He was co-founder and
CEO of Psonar, the internet music service
operating in SE Asia. He is non-executive
Chairman of FSE Fund Managers, a
venture fund management firm, and of
MJog, the medical messaging services
provider. He is an advisory board member
of the Bettany Centre for Entrepreneurship
at Cranfield University.
Bango PLC | Annual Report 2018
15
Directors’ report
Company registration number
05386079
Registered office
5 Westbrook Centre
Cambridge
CB4 1YG
Directors
D Sear - Non-executive Chair
Company Secretary
Bankers
Solicitors
Independent auditor
Nominated adviser and broker
Public relations advisor
US office
R Anderson - CEO
A Malhotra - CMO
C Rand - CFO
G D’Agostino – Non-executive Director
M Rigby – Non-executive Director
N Cruickshank – Non-executive Director
R Greenhalgh
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 PLC
6.7.8 Tokenhouse Yard
London
EC2R 7AS
FTI Consulting
200 Aldersgate
Aldersgate Street
London
EC1A 4HD
675 N. First Street
Suite 1180
San Jose
California 95112
USA
www.bango.com
investors@bango.com
16
Bango PLC | Annual Report 2018
Directors’ report
The Directors present the Annual Report and audited financial
statements of Bango PLC for the year ended 31 December
2018. 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:
Ordinary shares
of 20p each
31 Dec 2018
6,572,816
3,982,371
4,100
176,630
19,500
-
Ordinary shares
of 20p each
31 Dec 2017
6,567,260
3,976,815
4,100
176,630
37,500
-
R Anderson
A Malhotra
R Elias-Jones
M Rigby
G D’Agostino
D Sear
Rachel Elias-Jones resigned as a Director on 24 October 2018.
Carolyn Rand was appointed as a Director 1 January 2019.
Nancy Cruickshank was appointed as a Non-Executive
Director 1 January 2019.
The Directors’ biographies and experiences are shown on
pages 14-15.
The Directors’ interests in share options of Bango were as
follows:
Options to buy ordinary shares of 20p each
Date of grant
R Anderson
21 September 2018
14 March 2018
22 September 2017
21 March 2017
21 September 2016
16 March 2016
18 September 2015
Total
A Malhotra
21 September 2018
14 March 2018
22 September 2017
21 March 2017
21 September 2016
16 March 2016
18 September 2015
Total
R Elias-Jones
21 September 2018
14 March 2018
22 September 2017
21 March 2017
21 September 2016
16 March 2016
18 September 2015
Option
price
31 Dec
2018
31 Dec
2017
£1.73
£1.73
£2.55
£1.145
£0.89
£0.43
£0.885
£1.73
£1.73
£2.55
£1.145
£0.89
£0.43
£0.885
£1.73
£1.73
£2.55
£1.145
£0.89
£0.43
£0.885
50,000
50,000
50,000
50,000
50,000
50,000
32,500
332,500
50,000
50,000
50,000
50,000
50,000
50,000
32,500
332,500
50,000
50,000
50,000
50,000
50,000
100,000
20,000
-
-
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
16 March 2015
22 October 2014
01 April 2014
4 October 2013
26 March 2013
20 September 2012
Total
£1.060
£1.010
£1.360
£1.260
£2.325
£1.665
20,000
20,000
20,000
12,000
8,000
7,500
457,500
20,000
20,000
20,000
12,000
8,000
7,500
357,500
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, in
which case they lapse immediately.
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.
Dividends
The Directors have not recommended a dividend (31
December 2017: £nil).
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 mobile commerce platform, not just for 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 2018 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 for new products including the
Bango Market Place, which was launched in December 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 based on
merit. Wherever possible Bango provides
the same
opportunities for disabled people as for others. If employees
become disabled Bango would make reasonable efforts to
keep them in employment, with appropriate training where
necessary.
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
Bango PLC | Annual Report 2018 17
Directors’ report
with rapidly changing needs. The Bango values are Success,
Personable, Individual, Reliable, Innovation and Transparency
(SPIRIT values). The Bango annual goals are aligned to these
SPIRIT values and reviewed on a company wide basis at
monthly all hands meetings. Following the Bango SPIRIT
values serves both employees and customers’ needs. Further
detail on the Bango SPIRIT values and employee personal
development and welfare is set out within the Corporate
Governance Report at page 19.
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 cash on the statement of financial position.
At 31 December 2018 Bango had cash reserves of £3.8m
(£3.5m net of debt) and based on detailed cash flows
provided to the Board within the 2019/20 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 2019 as it did in 2018 as a result of expansion
of the existing Bango activity and new business opportunities
known about and included in the 2019/20 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 2018 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
Hargreaves Lansdown Asset
Management
Cavendish Asset
Management
Hargreave Hale
Number
%
11,119,316
15.82
8,689,600
8,655,852
5,390,467
3,117,840
3,034,600
12.37
12.32
7.67
4.44
4.32
Directors’ responsibility statement
The following statement, which should be read in conjunction
with the report of the auditor set out on page 25, is made to
distinguish for shareholders the respective responsibilities of
the Directors and of the auditor in relation to the financial
statements.
Company law requires the Directors to prepare financial
statements each financial year. Under that law the Directors
are required 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:
•
Select suitable accounting policies and then apply
them consistently.
• Make judgements and accounting estimates that are
reasonable and prudent.
•
•
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.
responsible
The Directors are
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:
•
•
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
information
is aware of
the auditor
that
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.
BY ORDER OF THE BOARD
The Directors are responsible for preparing the Annual Report
and the financial statements in accordance with applicable
law and regulations.
Company Secretary
R Greenhalgh
18
Bango PLC | Annual Report 2018
Corporate governance report
The Board
The Board is responsible for the overall strategy for Bango,
promoting shareholder interests and overseeing the delivery of
long-term objectives. The Board provides support to the Bango
management
to
complement those of management. The Board has a formal list
of matters specifically reserved for its decisions and delegates
authority to its various committees as required.
team, bringing experience and
skills
Corporate Governance code
The Board has adopted the Quoted Companies Alliance Code
("QCA Code"). The Board believes the pragmatic, principles-
based approach to corporate governance set out in the QCA
Code is a good fit to the nature, stage and size of the business
of Bango, and the sector in which it operates. The QCA Code's
principles support the core aims of Bango; to deliver innovative,
reliable products in a dynamic, collaborative environment,
achieving sustainable growth for all stakeholders.
The Board seized the introduction of the new QCA Code in 2018
as an opportunity to undertake a comprehensive review of its
corporate governance structures and practices. This review
concluded that Bango already has robust systems and
procedures in place, underpinned by a strong corporate culture
and customer-focused ethos. Policies and procedures have been
expanded or tightened as appropriate, but the review concluded
that no significant changes were required to existing governance
arrangements.
Corporate governance matters are kept under regular review by
the Board. Safeguarding the interests of shareholders, and those
of wider stakeholders, are paramount and central to Board
decision making.
Bango has published disclosures against all the Principles of the
QCA Code. Disclosures are contained either within this Annual
Report or on the AIM Rule 26 section of www.bangoinvestor.com,
which should be read in conjunction with each other.
Board composition
The Board of Bango PLC is made up of the independent Non-
Executive Chair, CEO, CFO, CMO, two other independent Non-
Executive Directors, and one further Non-Executive Director.
Details of the Board’s experience and interests are shown on
pages 21 which demonstrate the range of skills and insight that
they bring to Bango and the Board. It is important that the Non-
Executive Directors bring a wide range of skills to the Bango
Board in order to both challenge and support the Executive
Directors, and to ensure that shareholders’ interests are
represented.
in
Raymond Anderson has a very successful track record,
demonstrating instinctive entrepreneurial flair. He has extensive
experience
innovation and
technology and product
development, and strong product foresight. His infectious
passion for Bango, its products and customers, complement his
leadership skills to inspire partners, investors and employees
alike.
Anil Malhotra has many years’ experience in global business
development and is central to attracting and developing
strategic relationships with key partners. His communication skills
are central to the strength of Bango messaging, to both partners
and investors. Anil is also highly skilled at, and plays a central
role in, product strategy and market entry.
Carolyn Rand brings long-standing CFO experience across a
diverse range of businesses, including listed and private
companies, in Europe and North America. The breadth and
depth of this experience contributes significantly to day-to-day
operations, regulatory and compliance issues, as well as strategic
matters.
David Sear contributes a wealth of experience across telecoms,
financial services and data monetization businesses. He brings
widespread product and market experience, and has a strong
record of success with several market-leading technology
businesses. His listed company experience, and considered and
balanced approach, equip him strongly for his role as Chair.
Martin Rigby has a strong entrepreneurial background and
significant experience investing in technology and payments
businesses. This investment experience and solid grasp of
corporate governance issues are of particular value of the Board.
As well as mobile and payments industry experience, Gianluca
D’Agostino brings a detailed understanding of data monetization
to the Board. His investment and mergers and acquisitions
experience have already contributed significantly to the Bango
growth story with the acquisition by Bango of Audiens in 2018.
The recent appointment of Nancy Cruickshank as a Non-
Executive Director enhances the Board’s capabilities in digital
technologies and data. Her significant successes in technology
ventures, her mergers and acquisitions and listed company
experience, bolster the strength and depth of the Board’s
expertise in these important fields.
Two out of seven Directors identify as female, two as non-binary,
and three as male. In addition, the Company Secretary identifies
as female. Three Non-Executive Directors are deemed to be
independent. The final Non-Executive Director, Martin Rigby,
served on the Board during 2018. Mr Rigby was appointed to
the Board on 29 March 2007. The Board is confident that, in light
of the way in which he discharges his duties as a member of the
Board and its Committees, Mr Rigby remains independent in
character and judgement. However, in line with good corporate
governance practice, Mr Rigby will retire from the Board at the
Annual General Meeting, to be held on 17th May 2019.
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 members are required to devote such time as is necessary
for the proper performance of their duties. Executive directors
are required to work full time. Non-Executive Directors are
contractually required to commit to no less than 11 days per
annum. However, Non-Executive Directors invariably spend at
least 20 – 30 days per annum working for, and representing,
Bango; the Chair typically more than this. This includes
Bango PLC | Annual Report 2018 19
Corporate governance report
attendance at and preparation for Board and Committee
meetings, meetings and communications with shareholders,
contributing to and attending strategy days, meetings with
Bango managers and employees, as well as other key
stakeholders, and overseeing, and as required, involvement in,
strategic matters.
Role of the Chair
The Chair is charged with leading and overseeing the
effectiveness of the Board, and the implementation of Bango's
corporate governance structures and practices. They ensure the
Board is focused on strategic and financial issues. The Chair is
not involved in the day-to-day functioning or management of
the business, but ensures the Board is kept informed of key
operational and management matters so that advice and
support may be provided to the Executives where appropriate.
They are responsible for overseeing the CEO’s effectiveness and
performance.
Board meetings
The Board meets formally 11 times per year to discuss the
strategy, direction and financial performance of Bango. Other
additional Board meetings are arranged as required. The Board
reviews a detailed management pack each month which enables
them to fulfil all of their duties of stewardship. This management
pack contains detailed financial information as well as extensive
information on the KPIs for Bango. The Non-Executive Directors
attend all Board meetings.
David Sear
Ray Anderson
Rachel Elias-Jones**
Anil Malhotra
Martin Rigby
Gianluca D’Agostino
Board
15 (15)
15 (15)
13 (13)
15 (15)
15 (15)
15 (15)
Audit
Committee
2 (2)
2 (2)*
2 (2)*
1 (2)*
2 (2)
2 (2)
Remuneration
Committee
4 (4)
4 (4)*
4 (4)*
4 (4)*
4 (4)
4 (4)
(x) Number of meetings held
* By invitation of the committee
** Resigned from the Board 24th October 2018
Board performance
Board performance is essential to the success of Bango. The
Board strives to be strong and effective, individually and
collectively, and the correct mix of skills and experience is of
crucial importance in achieving this.
An annual appraisal system is in place for all employees,
including the Executive Directors. The CEO is responsible for
overseeing the performance of the CFO and CMO, and the
CEO's effectiveness is monitored by the Chair. The contribution
and performance of all Executive Directors is monitored and
overseen by the Non-Executive Directors.
incorporates performance-related
Executive
elements
those of Bango
interests with
shareholders. These performance-related elements are set as a
remuneration
to align
their
significant proportion of total remuneration, to incentivize, and
to reward success.
Non-Executive Director performance, excluding the Chair, is
overseen by the Chair in consultation with the Executive
Directors. The Chair’s performance is reviewed by a senior
independent director in consultation with all the directors. The
Non-Executive Directors' value and input to Bango is monitored
to ensure they are actively contributing to Bango achieving its
strategic and financial objectives.
The performance of the Board as a whole is evaluated
continuously and informally. The Board believes changes or
actions that are identified through this process should be
actioned immediately, instead of waiting for an annual or bi-
annual review. In early 2018 the Board formally reviewed
composition and performance of the Board, and created a “skills
matrix” that highlighted the contributions of current Board
members, and areas where the Board might benefit from
additional support. This led to the creation of a non-exec skills
profile, which resulted in retaining Nancy Cruikshank as an
additional Non-Executive Director on the Board. The Chair takes
responsibility for monitoring Board performance. They are
overseen by a senior independent director and supported by the
Company Secretary.
Further detail on board performance may be found in the AIM
Rule 26 section of the Bango investor website, located at
bangoinvestor.com/aim-rule-26.
Advisors to the Board
During 2018, there were no internal advisors to the Board, other
than the Company Secretary. The Company Secretary supports
and advises the Board on matters relating to corporate
governance, AIM and industry compliance, as well as wider legal
matters, such as, during 2018, the introduction of GDPR and
uncertainties and risks surrounding Brexit. The Company
Secretary ensures the Board and its sub-committees meet
regularly, and oversees and monitors agenda items.
Other than the advisors listed on page 16, no external advisors
were appointed by either the Board or any of its sub-committees
during 2018. Additionally, the Board did not seek external advice
on any significant matter.
Communications with shareholders
The Board recognizes the importance of regular and effective
communication with shareholders. The primary forms of
communication are:
•
•
Information provided at www.bangoinvestor.com
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.
20
Bango PLC | Annual Report 2018
Corporate governance report
All statutory financial reports, as well as accompanying
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 sub committees to
ensure good corporate governance. Separate Remuneration and
Audit Committees hold regular meetings and are each chaired
by a different Non-Executive Director, with the independent
Chair 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.
Corporate culture
Bango has a strong corporate culture which is consistent with its
objectives, strategy and business model. The Bango SPIRIT values
set out the core values that Bango aspires to represent, and that
Bango expects its employees to exhibit. These are:
Compliance with Bango policies and SPIRIT values is actively
monitored by senior management and implementation is
overseen by the Board. Management reports are scrutinized at
the Board's monthly board meetings.
In addition, key
management personnel are invited to present to board meetings
by rotation, or when key issues of concern arise, and report to
the Board when appropriate.
Employee personal development and welfare are paramount
and reinforced through these SPIRIT values, as well as through
employee benefits. Bango is committed to encouraging diversity
amongst
its equal
its workforce, and actively enforces
opportunities, anti-bullying and harassment policies. Employee
engagement surveys, which cover all aspects of the business, are
conducted annually by an external consultant, and their results
reported to the Board. Where suggestions for improvement or
concerns are raised, these are followed up by management who
are accountable to the Board for implementation.
All these measures assist in minimizing risk and uncertainty.
Further detail on corporate culture may be found in the AIM Rule
located at
26 section of
bangoinvestor.com/aim-rule-26.
investor website,
the Bango
Directors’ skills
The Executive Directors are treated no differently to any other
employee; the skills they bring to Bango, and their ongoing
personal development, are central to the success of Bango. As
with all other employees, the Executive Directors are required to
actively identify and undertake training as necessary. Training
extends not just to the ongoing enhancement of professional or
technical skills, but also to wider skills, such as management
training, communication skills, and similar. Bango conducts
regular training sessions for all employees (which the Executive
Directors attend), conducted by an external consultant, covering
the SPIRIT values, with each session concentrating on a different
value. The Non-Executive Directors are responsible for ensuring
their skillsets are kept updated as required. The Company
Secretary is responsible for ensuring that the entire Board are
updated on relevant legal, regulatory and governance updates.
The CFO updates the Board on accounting, tax and audit
matters. They deliver briefing notes and training to the Board as
required, supported by Bango’s NOMAD, accountants and legal
advisors. Industry-specific updates are delivered to the Board by
the relevant expert, be it a director, an employee or an
independent expert.
Further details on Corporate Governance
This document should be read in conjunction with the Corporate
Governance disclosures set out in the AIM Rule 26 section of the
Bango investor website, located at bangoinvestor.com/aim-rule-
26. Those QCA Code principles not covered in detail in this
Annual Report, which include detail on meeting shareholder
needs and expectations, taking into account wider stakeholder
and social responsibilities, more detail on board performance
structures and processes and
evaluation, governance
shareholder communications, are covered in those website
disclosures.
Index to Corporate Governance Disclosures
An index of all disclosures required by the QCA Code can be
found on the AIM Rule 26 section of the Bango investor website,
located at bangoinvestor.com/aim-rule-26.
David Sear
Non-executive Chair
Bango PLC | Annual Report 2018 21
Corporate governance report
Composition
The Audit Committee comprises the Chair 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:
• Monitor the integrity of the financial statements of
•
•
•
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:
• 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
external auditor’s
independence and objectivity and the effectiveness of
the audit process.
the
•
• Develop and implement policy on the engagement of
the external auditor to supply non-audit services.
The audit was put out to tender in 2018, following the continued
appointment of Grant Thornton for 13 years. Following the tender
process, the Committee re-appointed Grant Thorton as external
auditors.
Internal control procedures
The Board is responsible for 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:
• A clearly defined organizational structure with
•
•
appropriate delegation of authority.
The approval by the Board of a one-year budget,
including monthly income statements, statements of
financial position 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.
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
the Bango
Delegation of Authority document.
Reconciliations of key statement of financial position
accounts are performed and independently reviewed
by the finance team. Wherever possible segregation of
duties is implemented to provide additional comfort
and support on all finance processes.
in accordance with
•
•
• 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 are
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 Chair
22
Bango PLC | Annual Report 2018
Remuneration committee report
Composition
The Remuneration Committee comprises 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:
•
•
•
•
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 2018 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 considers remuneration packages of comparable
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 Bango 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 2018 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 17.
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 3%
to 5% under auto-enrolment 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
Bango PLC | Annual Report 2018
23
Remuneration committee report
Directors’ emoluments
Details of remuneration in respect of the Directors is as follows:
31 December 2018
R Anderson
A Malhotra
R Elias-Jones
M Rigby
G D’Agostino
D Sear
Wages and
salaries
£
165,000
147,500
122,103
22,500
22,500
62,730
Variable pay
£
52,200
36,000
17,400
-
-
-
Pension and
other benefits
£
5,105
5,219
3,191
-
-
-
Total
£
222,305
188,719
142,694
22,500
22,500
62,730
542,333
105,600
13,515
661,448
During the year Bango was invoiced £28,379 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.
During the year Bango was invoiced £6,600 by Egan and Talbot Limited, a company of which Martin Rigby is a director. The
amount invoiced relates to consultancy work carried out by Martin Rigby in the year.
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
Variable pay
£
56,250
48,750
-
-
-
-
Pension and
other benefits
£
2,255
3,412
2,866
-
-
-
Total
£
208,505
192,162
129,533
22,500
22,500
55,333
517,000
105,000
8,533
630,533
Gianluca D’Agostino
Remuneration Committee Chair
24
Bango PLC | Annual Report 2018
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 2018, which comprise the Consolidated statement of financial position, the Consolidated statement of comprehensive income,
the Consolidated cashflow statement, the Consolidated statement of changes in equity, the notes to the financial statements 1 to 23
(‘group notes’) including a summary of significant accounting policies for the group, the parent company Statement of financial position,
the parent company Statement of changes in equity , the parent company Cashflow statement and notes to the financial statements 1
to 11, including a summary of significant accounting policies for the parent company. 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:
•
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 2018 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.
•
•
•
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.
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
the directors have not disclosed in the financial statements any identified material uncertainties that may cast significant doubt about
the group’s or the parent company’s ability to continue to adopt the going concern basis of accounting for a period of at least twelve
months from the date when the financial statements are authorised for issue.
Overview of our audit approach
• Overall materiality: £165,000, which represents 2.5% of the group's revenues;
•
Key audit matters were identified as the recognition of acquired intangible assets, the
capitalization and carrying value of internal development costs and goodwill, and the
presumed risk of improper revenue recognition;
• We audited the financial statements of Bango plc and the financial information of
Bango.net Limited, Bango Payments Limited, Bango Deep Limited and Audiens Limited.
For the remaining ten components, we performed targeted and analytical audit procedures
to respond to the risk of material misstatement.
Bango PLC | Annual Report 2018
25
Independent auditor’s report to the members of Bango PLC
Key audit matters
Key audit matters are those matters that, in our professional judgement, 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.
Key Audit Matter – Group
Recognition of acquired intangible
assets
The group has recognised new acquired
intangible assets (£1.9m) and goodwill
(£2.5m) arising from the acquisition of
Audiens SRL.
There is the risk that the assets arising from
the acquisition of Audiens SRL have not
been fairly stated, and the acquisition has
not been appropriately disclosed.
Significant judgements are used in
identifying and valuing separable
intangible assets upon acquisition. We
therefore identified the recognition of
acquired intangible assets as a significant
risk, which was one of the most significant
assessed risks of material misstatement.
Capitalization and carrying value of
internal development costs and
goodwill
The group has internal development costs
(£5.8m), acquired intangibles (software)
(£2.0m) and goodwill (£3.8m).
There is the risk that the carrying value of
these intangible assets exceeds the
recoverable value.
Internally capitalized development costs
and goodwill are assessed on an annual
basis for potential impairment, and
management exercise significant
judgement, such as in the calculation of
the discount rate and timing of future cash
flows, when performing impairment
reviews.
The directors and management consider
that there are three cash generating units
(CGUs); two associated with the payment
activity revenue stream, and one
associated with the data activity revenue
stream. Revenues are allocated between
CGUs when assessing impairment.
We identified a risk that internal
development costs may be wrongly
capitalized in the year and do not meet
the criteria set out in International
How the matter was addressed in the audit – Group
Our audit work included, but was not restricted to:
• Using an independent auditor’s expert to assess the reasonableness of
assumptions used by management’s expert in the purchase price allocation
estimate for the acquisition of Audiens SRL;
• Assessing the reasonableness of the inputs used by management’s expert by
agreeing them to supporting documentation;
• Agreeing the costs capitalised to the management’s expert’s report;
• Assessing the objectivity, competency and capability of management’s expert;
• Testing the accuracy of significant opening net asset balances of acquired
intangible assets;
• Assessing whether the accounting policy in respect of acquired intangible assets
was compliant with IFRS as adopted by the European Union and whether the
group had accounted for these assets in accordance with that policy; and
• Checking the disclosures in relation to the acquisition of Audiens SRL are compliant
with IFRS as adopted by the European Union.
The group's accounting policy on the recognition and impairment of acquired intangible
assets is shown in group notes 3.3 and 3.5 to the financial statements and related
disclosures are included in group note 5.2.
Key observations
Our testing did not identify any material misstatements in the recognition of acquired
intangible assets. We found no material errors in calculations and no material
omissions in the disclosures.
Our audit work included, but was not restricted to:
• Agreeing the internal development costs capitalized are in accordance with IAS 38
by checking a sample of amounts capitalized during the year, split between staff
costs, consultancy costs, software and overheads testing to supporting
documentation;
• Assessing the reasonableness of management’s methodology to allocate eligible
costs for capitalization;
• Recalculating the amortization for the year;
• Assessing whether the accounting policy for amortization was compliant with IFRS
as adopted by the European Union and whether the group had accounted for
amortization in accordance with that policy, including whether it was consistent
with the prior year;
• Assessing management’s review of possible impairment of intangible assets by
challenging the assumptions used and checking the mathematical accuracy of the
impairment models;
• Testing the accuracy of management’s assumptions and inputs to management’s
impairment models by comparing the budgeted sales and gross profit to the results
achieved for the current year; and
• Discussing and corroborating the ongoing viability of projects with relevant Group
personnel.
The group's accounting policy on the capitalization and impairment of intangible assets
is shown in group notes 3.4 and 3.5 to the financial statements and related disclosures
are included in group note 5.2.
Key observations
Our testing did not identify any material misstatements in the amounts capitalized as
internal development costs in the year. We found no reason for impairment of internal
development costs or goodwill, or any additional factors to be considered that would
26
Bango PLC | Annual Report 2018
Independent auditor’s report to the members of Bango PLC
Key Audit Matter – Group
Accounting Standard (IAS) 38 ‘Intangible
assets’.
How the matter was addressed in the audit – Group
affect the carrying value of these intangible assets recognised within the financial
statements and we found no material errors in calculations.
Our audit work included, but was not restricted to:
• Substantively analysed EUS by dividing revenue by the average margin percentage
for each operator. The margin percentages were confirmed by tracing to
underlying contracts for a sample of operators;
• Substantive testing across the payment activity and data activity revenue streams
including agreeing a sample of transactions in each revenue stream to source data
and other supporting documentation;
• Updating our understanding of the control environment and relevant business
processes around the sales process in the payment activity revenue stream and
testing the operating effectiveness of key controls;
• Assessing whether the accounting policy in respect of revenue recognition was
compliant with IFRS as adopted by the European Union and whether the group
had accounted for revenue in accordance with that policy; and
• Assessing the appropriateness of management’s judgements around IFRS 15.
The group's accounting policy on revenue recognition is shown in group note 3.12 to the
financial statements and related disclosures are included in group 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.
There is inherent uncertainty involved in
forecasting and discounting future cash
flows. We therefore identified the
capitalization and carrying value of internal
development costs and goodwill as a
significant risk, which was one of the most
significant assessed risks of material
misstatement.
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
presumed risk of fraud that revenue may
be misstated due to the improper
recognition of revenue.
Revenue is split into two streams, payment
activity and data activity.
IFRS 15 ‘Revenue from Contracts with
Customers’ became effective from 1
January 2018. Management have assessed
contracts with customers to identify the
relevant performance obligations.
Management has determined that under
IFRS 15, payment activity revenue is
measured in three ways: where annual
subscriptions are charged for the use of
the Bango Platform, revenue is recognized
evenly over the life of the subscription;
revenue from End User Spend (EUS) activity
is calculated as either a fixed fee per
transaction or as a percentage of the total
EUS.
The new Bango data activity stream
comprises the provision of data
monetisation service with revenue
recognised at the point of supply for data
activity.
Significant judgements are used in the
application of IFRS 15. We have identified
improper revenue recognition as a
significant risk, which was one of the most
significant assessed risks of material
misstatement.
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.
Bango PLC | Annual Report 2018
27
Independent auditor’s report to the members of Bango PLC
Materiality was determined as follows:
Materiality measure
Financial statements as a
whole
Parent
£148,000, which is based on assets held by the parent but
restricted to lower than 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 2017 to reflect the
fact that, despite an increase in total assets, parent company
materiality is restricted to be lower than group materiality.
Group
£165,000, which is 2.5% of the
group’s total revenues. This
benchmark is considered the most
appropriate because revenue
generation 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 2017 because of the
change in benchmark. The prior year
materiality was based on the
Group’s loss before taxation.
Performance materiality
used to drive the extent
of our testing
Specific materiality
Communication of
misstatements to the
audit committee
75% of financial statement
materiality.
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).
£8,250 and misstatements below
that threshold that, in our view,
warrant reporting on qualitative
grounds.
We also determine a specific level of materiality for certain areas
such as Directors’ remuneration and related party transactions.
£7,400 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:
•
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 key benchmarks, being
revenues, profit before tax and total assets;
• we undertook an interim visit at the group’s head office, and assessed the group’s internal processes and control environment;
•
all of the UK components, being Bango plc, Bango.net Limited, Bango Payments Limited, Bango Deep Limited and Audiens Limited had
a full scope audit (covering 58% of the group’s loss before taxation and 79% of the group’s revenue);
• Audiens SRL, the main trading entity in Italy, had a targeted review over its revenue, costs, intangible assets, debtors and cash to provide
sufficient appropriate audit evidence for the group audit opinion;
all nine other overseas components were performed analytical procedures to give us assurance at group level;
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.
•
•
•
28
Bango PLC | Annual Report 2018
Independent auditor’s report to the members of Bango PLC
Other information
The directors are responsible for the other information. The other information comprises the information included in the annual report, other
than the financial statements and our auditor’s report thereon. Our opinion on the financial statements does not cover the other information
and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon.
In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether
the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to
be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether
there is a material misstatement in the financial statements or a material misstatement of the other information. If, based on the work we
have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
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:
•
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.
•
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:
•
adequate accounting records have not been kept by the parent company, or returns adequate for our audit have not been received
from branches not visited by us; or
•
the parent company financial statements are not in agreement with the accounting records and returns; or
•
certain disclosures of directors’ remuneration specified by law are not made; or
• we have not received all the information and explanations we require for our audit.
Responsibilities of directors for the financial statements
As explained more fully in the Directors’ responsibilities statement set out on page 18, 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.
Bango PLC | Annual Report 2018 29
Independent auditor’s report to the members of Bango PLC
Use of our report
This report is made solely to the company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our
audit work has been undertaken so that we might state to the company’s members those matters we are required to state to them in an
auditor’s report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other
than the company and the company’s members as a body, for our audit work, for this report, or for the opinions we have formed.
Alison Seekings
Senior Statutory Auditor
for and on behalf of Grant Thornton UK LLP
Statutory Auditor, Chartered Accountants
Cambridge
18 March 2019
30
Bango PLC | Annual Report 2018
Consolidated statement of financial position
Note
31 Dec 2018
31 Dec 2017
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
Deferred tax liability
5
5
6
6
7
8
9
9
15
567,620
11,927,893
556,683
6,130,190
12,495,513
6,687,053
2,815,533
634,889
3,814,927
2,013,088
421,215
4,847,203
7,265,349
7,281,506
19,760,862
13,968,559
14,053,582
35,796,976
2,175,470
3,880,680
161,657
(40,099,865)
13,284,561
31,248,453
1,236,225
2,350,701
78,318
(37,474,820)
15,968,500
10,723,438
3,408,919
121,968
3,530,887
152,081
109,394
261,475
2,967,538
99,889
3,067,427
177,694
-
177,694
Total liabilities
3,792,362
3,245,121
Total equity and liabilities
19,760,862
13,968,559
These financial statements were approved by the Directors on 18 March 2019 and are signed on their behalf by:
R Anderson C Rand
Director Director
Company registration number 05386079
The notes on pages 35 to 61 are an integral part of these consolidated financial statements.
Bango PLC | Annual Report 2018 31
Consolidated statement of comprehensive income
Alternative performance measure (Non-IFRS)
End User Spend
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
Note
31 Dec 2018
£
31 Dec 2017
£
4
4
4
10
11
10
5
5
11
14
558,172,507
271,356,080
6,619,728
(796,180)
4,151,939
(2,439)
5,823,548
4,149,500
(6,690,482)
-
(1,034,824)
(270,070)
(1,345,187)
(5,717,516)
(59,463)
(679,023)
(188,496)
(1,396,541)
(9,340,563)
(8,041,039)
(3,517,015)
(3,891,539)
(67,696)
14,805
(51,458)
20,858
(3,569,906)
(3,922,139)
15
706,367
486,986
(2,863,539)
(3,435,153)
83,339
(56,869)
Loss and total comprehensive loss for the financial year
(2,780,200)
(3,492,022)
Loss per share attributable to the equity holders of the parent
Basic loss per share
Diluted loss per share
16
16
(4.11)
(4.11)
(5.22)
(5.22)
All of the activities of the Group are classed as continuing.
The notes on pages 35 to 61 are an integral part of these consolidated financial statements
32
Bango PLC | Annual Report 2018
Consolidated cashflow statement
Net cash used by operating activities
17
(1,591,039)
(253,675)
Note
31 Dec 2018
£
31 Dec 2017
£
Cash flows used by investing activities
Purchases of property, plant and equipment
Addition to intangible assets
Purchase of subsidiary
Payment of deferred consideration
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 payments on finance lease obligations
Capital repayments of 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
(181,977)
(2,573,306)
(1,238,706)
(547,307)
14,805
(179,194)
(1,509,670)
-
-
20,858
(4,526,491)
(1,668,006)
5,545,974
(332,793)
(67,696)
(102,384)
1,180,549
-
(51,458)
(89,571)
5,043,101
1,039,520
(1,074,429)
(882,161)
4,847,203
42,153
5,696,517
32,847
4,889,356
5,729,364
3,814,927
4,847,203
The notes on pages 35 to 61 are an integral part of these consolidated financial statements.
Bango PLC | Annual Report 2018
33
Consolidated statement of changes in equity
Share Capital
£
Share Premium
account
£
Merger reserve Other reserve
£
£
FER
reserve
£
Retained
Earnings
£
Total
£
13,029,124
30,323,341
1,236,225
2,211,136
135,187
(34,579,125)
12,355,888
-
-
-
-
255,437
255,437
925,112
925,112
-
-
-
-
-
-
-
-
-
-
-
-
-
679,023
(539,458)
-
139,565
-
-
-
-
-
-
-
-
-
679,023
539,458
-
-
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)
13,284,561
31,248,453
1,236,225
2,350,701
78,318
(37,474,820)
10,723,438
Share Capital
£
Share Premium
account
£
Merger reserve Other reserve
£
£
FER
reserve
£
Retained
Earnings
£
Total
£
13,284,561
31,248,453
1,236,225
2,350,701
78,318
(37,474,820)
10,723,438
-
-
-
106,882
662,139
-
-
-
-
419,092
4,462,224
(332,793)
-
-
-
-
939,245
-
1,034,824
(238,494)
733,649
-
-
-
769,021
4,548,523
939,245
1,529,979
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
1,034,824
238,494
-
-
-
-
-
733,649
525,974
6,063,608
(332,793)
238,494
8,025,262
(2,863,539)
(2,863,539)
83,339
-
83,339
83,339
(2,863,539)
(2,780,200)
14,053,582
35,796,976
2,175,470
3,880,680
161,657
(40,099,865
)
15,968,500
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
Balance at 1 January
2018
Share based
payments
Share based
payments transfer for
exercised share
options
Issue of warrants
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 18
The notes on pages 35 to 61 are an integral part of these consolidated financial statements.
34
2018
Bango PLC | Annual Report
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 16. 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 that enables
the marketing and sale of products and services to mobile
phone users.
The financial statements for the year ended 31 December 2018
(including the comparatives for the year ended 31 December
2017) were approved by the Board of Directors on 18 March
2019.
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 2018, 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 Italian
subsidiary performs both sales and support functions for
Bango.net Limited as well as providing sales and support for
the local entity. Audiens SRL also provides new data activity
revenue. 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 £3.8m at 31 December 2018 (31 December
2017: £4.8m) and financing debt of £0.3m (31 December 2017:
£0.3m). 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.
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.
incorporate
The consolidated
the
financial statements
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
equipment held under finance leases.
include computer
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
3 years straight-line
Internal development
5 – 8 years 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 5 years and for acquired
software is 8 years.
Bango PLC | Annual Report 2018
35
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:
•
•
•
• 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 statement of financial position 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 will be charged on the intangible
asset, the assets are subject to an annual impairment test.
3.6 Current financial assets
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
is
determined as the difference between the asset's carrying
amount and the present value of the estimated receivable.
the write-down
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 statement of financial position
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.
involves
Deferred income taxes are calculated using the liability
the
temporary differences. This
method on
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 statement of financial position 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
36
Bango PLC | Annual Report 2018
Notes to the financial statements
rewards of ownership are not transferred are charged to the
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.
3.10 Finance lease agreements
Assets held under leases which transfer to Bango substantially
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. These two streams have changed in 2018 following
the acquisition of Audiens SRL. One revenue stream relates to
payment transactions processes by the Bango Platform and
the other stream relates to data activity.
Before 2018 Bango separated revenue into transactions fees
or platform fees, all these fees related to revenue generated
by connections to or use of the Bango Platform. All such
revenue is now shown in End user activity.
3.12.1 Revenue linked to End user activity
Bango EUS revenue is contractually determined as the fee
from each transaction through the Bango Platform. The fee is
a percentage of the price that the end user pays for content,
goods or services. The revenue is recognized on the basis of
completion of performance obligations, which for EUS
revenue is to ensure that the Bango Platform is always
available and that payments are enabled to take place and
be accounted for between payment providers and sellers of
goods.
Revenue from other fees relates to revenue 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.
Support fees – where Bango provides monthly
services which are recognised at point of invoice.
The cumulative impact of the adoption of IFRS 15 is considered
to be immaterial as the contracts, the nature of the service,
the timescales for delivery and the length of the service being
provided have been considered and are determined 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.
3.12.2 Data activity
Revenue from data activity is where Bango provides data
segments to merchants or other advertisers.
The transaction price for data activity is clearly defined in
contracts, and is either one off or monthly fees. The
performance obligations are to supply specified segments of
data.
Revenue is recognized at point of supply for data activity.
3.13 Employee benefits
All accumulating employee-compensated absences that are
unused at the statement of financial position 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.
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.
Bango PLC | Annual Report 2018
37
Notes to the financial statements
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 earnings. Share-based payment
transactions are shown separately in the statement of
comprehensive income. Additional information is provided in
note 7.
3.15 Foreign currencies
Monetary assets and liabilities in foreign currencies are
translated into sterling at the rates of exchange prevailing at
the statement of financial position 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 data
segments 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.
3.17 Financial instruments
IFRS 9 replaces IAS 39 ‘Financial Instruments: Recognition and
Measurement’. This changes the guidance on classification
and measurement of financial assets, and introduces an
“expected credit loss” model for the impairment of financial
assets.
When adopting IFRS 9, Bango has applied transitional relief
and opted not to restate prior periods. The adoption of IFRS
9 has impacted the following area:
•
The impairment of financial assets applying the
expected credit loss model. This affects Bango’s
trade receivables measured at amortised cost.
Bango uses a simplified approach in accounting for trade and
other receivables and records the loss allowance as lifetime
expected credit losses. These are the expected shortfalls in
contractual cash flows, considering the potential for default
at any point during the life of the financial instrument. Bango
uses its historical experience and forward-looking information
to calculate the expected credit losses.
As accounting for financial liabilities remains largely the same
under IFRS 9 compared to IAS 39, Bango’s financial liabilities
were not impacted by the adoption of IFRS 9.
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 and the excess over nominal
value for equity shares issued as part of a business acquisition
where at least 90% of the entity is acquired.
Other reserve
The other reserve represents equity-settled share-based
employee remuneration recognized over the vesting period
and the initial present value of warrants issued over equity
shares.
foreign exchange
Foreign exchange reserve
The
translation
reserve
differences arising from the translation of the Bango
subsidiaries financial statements which are held in local
currency into the consolidated Bango accounts which is
reported in GBP. This reserve only arises at consolidation.
represents
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 11).
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 have considered IFRS 15 and
determined that the current recognition and presentation is
appropriate.
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
statement of financial position. 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
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 statement of financial position date. No
deferred tax asset is currently being recognized due to the
unpredictability of future taxable trading profits from which
38
Bango PLC | Annual Report 2018
Notes to the financial statements
these differences may be deducted (note 15).
Development costs
Judgement is applied when deciding whether the recognition
requirements for development costs have been met, based on
the information available at each statement of financial
position 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
statement of financial position date. The carrying value of
capitalized development costs is £5,777,712 (2017: £4,031,919).
No projects are considered to be impaired 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-eight
year period, goodwill is not amortized. All acquired assets not
subject to amortization 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 2018. 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
and that are mandatory for the Group’s accounting periods
beginning on or after 1 January 2018, 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 16 Leases (IASB effective date 1 January 2019) will bring
all operating leases onto the statement of financial position 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.
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 include its Directors and key
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.
Bango PLC | Annual Report 2018
39
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 2018
31 December 2017
£
£
End User Spend
558,172,507
271,356,080
(b) Revenue and gross profit
Bango, based on the information reviewed by the chief operating decision maker, identifies two operating segments. There are two
separable revenue streams in Bango. These two streams have changed in 2018 following the acquisition of Audiens SRL. One revenue
stream relates to payment transactions processes by the Bango Platform and the other stream relates to data activity. Before 2018
Bango separated revenue into transactions fees or platform fees, all these fees related to revenue generated by connections to or
use of the Bango Platform. All such revenue is now shown in End user activity.
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 follows for the reporting periods under review.
12 months to 31 December 2018
Segment revenue
Cost of sales
End user
activity
Data
activity
£
£
5,248,299
-
1,371,429
(796,180)
Segment gross profit
5,248,299
575,249
Group
Total
£
-
-
-
£
6,619,728
(796,180)
5,823,548
Administrative expenses
Share based payments charge
Depreciation
Amortization
Interest payable
Interest income
-
-
-
-
-
-
-
-
-
-
-
-
(6,690,482)
(6,690,482)
(1,034,824)
(270,070)
(1,345,187)
(67,696)
14,805
(1,034,824)
(270,070)
(1,345,187)
(67,696)
14,805
Segment net profit/ (loss)
5,248,299
575,249
(9,393,454)
(3,569,906)
Segment assets
Segment liabilities
2,773,982
3,108,269
13,878,610
19,760,862
(83,130)
(438,248)
(3,270,984)
(3,792,362)
Net assets
2,690,852
2,670,021
10,607,626
15,968,500
40
Bango PLC | Annual Report 2018
Notes to the financial statements
12 months to 31 December 2017
Payment
activity
Data
activity
Group
Total
Segment revenue
Cost of sales – payment providers
Segment gross profit
Administrative expenses
Non-recurring items
Share based payments charge
Depreciation
Amortization and impairment
Interest payable
Interest income
£
4,151,939
(2,439)
4,078,548
-
-
-
-
-
-
-
Segment net profit/ (loss)
4,078,548
Segment assets
Segment liabilities
Net assets
1,451,542
(2,479,707)
(1,028,165)
£
-
-
-
-
-
-
-
-
-
-
-
-
-
-
£
-
-
-
£
4,151,939
(2,439)
4,149,500
(5,717,516)
(5,717,516)
(59,463)
(679,023)
(188,496)
(1,396,541)
(51,458)
20,858
(59,463)
(679,023)
(188,496)
(1,396,541)
(51,458)
20,858
(8,071,639)
(3,922,139)
12,517,017
13,968,559
(765,414)
(3,245,121)
11,751,603
10,723,438
End User Spend activity revenue is the Bango revenue share for processing transactions through the Bango Platform. Bango earns
revenue calculated either as a share of the net of tax figure or as a fixed value per transaction. Assets for this segment are amounts
due from merchants or payment providers. Liabilities for this segment are mainly fees payable to payment providers for provision of
services and fees payable to merchants for provision of content sold by Bango to end users.
Bango data activity relates to revenues generated from fees and by third parties monetizing their data by using Bango technology
to segment their data and sell it through the trading desk integrations. Revenue is either a monthly software as a service fee or a
revenue share from selling the data to third parties. Assets from this segment are fees from data owners and liabilities relate to sums
owed to data owners. Liabilities also relating to the deferred consideration for the Audiens are shown in this segment.
Group assets include non-current assets and cash and cash equivalents. Group liabilities relate to administrative expenses.
(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
Rest of World
31 Dec 2018
31 Dec 2017
£
£
29,541
1,338,890
1,559,025
3,692,272
12,264
58,719
2,050,162
2,030,794
6,619,728
4,151,939
Segment revenue is based on the location of the partners. All turnover is spread over many territories, of which £2.7m comes from
two partners in Rest of World and £0.9m comes from a partner in USA and Canada. (2017: £1.8m USA and Canada, £1.0m from two
partners in Rest of World).
Bango PLC | Annual Report 2018
41
Notes to the financial statements
Bango’s non-current assets are divided into the following geographical areas.
United Kingdom (country of domicile)
EU
Non-current assets are allocated based on their physical location.
5 Non-current assets
5.1 Property, plant and equipment
31 Dec 2018
31 Dec 2017
£
£
10,816,562
1,678,951
6,687,053
-
12,495,513
6,687,053
Leasehold
improvements
£
Office
equipment
£
Computer
equipment
£
Total
£
Cost
At 1 January 2017
Additions
356,176
3,445
157,380
26,005
1,856,807
421,344
2,370,363
450,794
At 31 December 2017
359,621
183,385
2,278,151
2,821,157
Depreciation
At 1 January 2017
Charge for the year
252,600
33,281
138,944
11,054
1,684,254
144,161
2,075,798
188,496
At 31 December 2017
285,881
149,998
1,828,415
2,264,294
Net book value
At 31 December 2017
73,740
33,387
449,736
556,863
Leasehold
improvements
£
Office
equipment
£
Computer
equipment
£
Total
£
Cost
At 1 January 2018
Additions
359,621
4,956
183,385
91,049
2,278,151
184,822
2,821,157
280,827
At 31 December 2018
364,577
274,434
2,462,973
3,101,984
Depreciation
At 1 January 2018
Charge for the year
285,881
33,567
149,998
18,099
1,828,415
218,404
2,264,294
270,070
At 31 December 2018
319,448
168,097
2,046,819
2,534,364
Net book value
At 31 December 2018
45,129
106,337
416,154
567,620
42
Bango PLC | Annual Report 2018
Notes to the financial statements
5.2 Intangible assets
Domain
Names
Internal
Development
£
£
Acquired
intangibles
(Software)
£
Acquired
intangibles
(Contracts)
£
Acquired
intangibles
(Brand)
£
Goodwill
Total
£
£
32,887
7,406,361
786,666
517,037
43,704
1,200,000
9,986,655
-
1,509,670
-
-
-
-
1,509,670
32,887
8,916,031
786,666
517,037
43,704
1,200,000
11,496,325
32,887
3,768,281
98,333
64,630
-
-
807,409
163,962
107,838
308,422
-
-
5,463
8,910
-
-
-
-
3,969,594
1,088,119
308,422
32,887
4,884,112
262,295
172,468
14,373
-
5,366,135
-
4,031,919
524,372
344,569
29,331
1,200,000
6,130,190
Domain
Names
Internal
Development
£
£
Acquired
intangibles
(Software)
£
Acquired
intangibles
(Contracts)
£
Acquired
intangibles
(Brand)
£
Goodwill
Total
£
£
32,887
8,916,031
786,666
517,037
43,704
1,200,000
11,496,325
-
-
2,573,306
-
2,141,333
36,589
-
24,048
78,657
2,033
2,548,405
55,814
7,341,701
118,484
32,887
11,489,337
2,964,588
541,085
124,394
3,804,219
18,956,510
32,887
4,884,112
262,295
172,468
-
-
-
-
827,513
285,460
390,061
-
104,097
-
18,675
12,136
14,373
-
23,516
1,024
-
-
-
-
5,366,135
285,460
1,345,187
31,835
32,887
5,711,625
956,491
288,701
38,913
-
7,028,617
-
5,777,712
2,008,097
252,384
85,481
3,804,219
11,927,893
Cost
At 1 January
2017
Additions
At 31
December
2017
Amortization
At 1 January
2017
Charge for
period
Impairment
At 31
December
2017
NBV at
31 December
2017
Cost
At 1 January
2018
Additions
FX
revaluation
At 31
December
2018
Amortization
At 1 January
2018
Additions
Charge for
period
FX
revaluation
At 31
December
2018
NBV at
31 December
2018
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. No projects
had any indication of impairment.
Bango PLC | Annual Report 2018
43
Notes to the financial statements
Goodwill is reviewed annually for signs of impairment. Goodwill relates to the acquisition of BillToMobile Inc in May 2016 and Audiens
SRL in 2018. The recoverable amount of the goodwill is determined from the value in use, after the assessment of future expected
revenue and costs. The key assumptions are the discount rates (20% used consistent with review of intangibles) growth rates (1-3% -
assumptions have compared 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 relating to the acquisition of BillToMobile Inc has been allocated to the EUS activity business segment and goodwill
relating to the acquisition of Audiens SRL has been allocated to the Data activity segment. Cash flows for a period of 8 and 9
years have been reviewed in assessing the goodwill, for goodwill in Audiens SRL and BillToMobile Inc respectively and there are no
indicators of impairment following sensitivity analysis of the key assumptions.
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 2018
£
31 Dec 2017
£
1,442,789
224,816
1,152,928
2,820,533
(5,000)
2,815,533
634,889
1,123,889
130,497
763,702
2,018,088
(5,000)
2,013,088
421,215
3,450,422
2,434,303
At 31 December 2018, some of the unimpaired trade receivables are past their due date. The age of financial assets past due but not
impaired is as follows:
One to two months
Three to twelve months
More than twelve months
31 Dec 2018
£
31 Dec 2017
£
159,366
102,950
-
9,972
20,733
-
874,745
395,578
Trade and other receivables are usually due within 30-60 days and do not bear any effective interest rate. Trade receivables from
digital merchants consist of numerous accounts with no significant individual balances. Allowance for expected credit losses is
provided for.
Expected credit loss rate
Gross carrying amount
Lifetime expected credit loss
Current
-
612,429
-
One to two
months
-
159,366
-
Three to twelve
months
5%
102,950
5,000
Total
874,745
5,000
The fair value of these 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 allowance for expected credit losses for trade receivables is provided below:
Brought forward provision
Debts written off in the year
Increase in provision
Carry forward provision
31 Dec 2018
£
5,000
-
-
31 Dec 2017
£
5,000
-
-
5,000
5,000
44
Bango PLC | Annual Report 2018
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 2016
Exercise of share options
As at 31 December 2017
Issue of new shares
Exercise of share options
As at 31 December 2018
No
£
65,145,618
13,029,124
1,277,185
255,437
66,422,803
13,284,561
3,310,693
534,412
662,139
106,882
70,267,908
14,053,582
During the year 534,412 share options were exercised at exercise prices between 43 pence and 136 pence and a par value of 20
pence per share. The total proceeds were £0.52m of which £0.10m was recognized as share capital and £0.42m 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:
Average
exercise price
per share
p
129
163
164
98
138
128
31 Dec 2018
Options
No
4,079,616
1,410,000
(774,145)
(534,412)
4,181,059
2,121,501
Average
exercise price
per share
p
103
185
120
92
129
123
31 Dec 2017
Options
No
4,495,049
1,226,000
(364,248)
(1,277,185)
4,079,616
2,341,691
Outstanding at 1 January 2018
Granted
Lapsed
Exercised
Outstanding at 31 December 2018
Exercisable at 31 December 2018
The weighted average share price at date of options exercised during the year was 145.96 pence (2017: 138.82 pence).
The fair value of options granted during the year, determined using the Black-Scholes valuation model, were between 60-84 pence.
Significant inputs into the model include a weighted average share price of 163 pence (31 December 2017: 185 pence) at the grant
date, the exercise prices, volatility of 55.4-58.4% (31 December 2017: 59.4-60.4%), dividend yield of nil (31 December 2017: nil), an
expected option life of five years (31 December 2017: five years) and an annual risk-free interest rate of 1.04-1.17% (31 December 2017:
0.51-0.78%).
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 2018
45
Notes to the financial statements
At 31 December 2018, Bango PLC had the following outstanding options and exercise prices:
Average
exercise
price per share
Options
31 Dec 2018
Remaining
Contractual
Average
exercise
Life price per share
Options
31 Dec 2017
Remaining
Contractual
Life
Expiry date
Pence
Number
Months
Pence
Number
Months
2018
2019
2019
2020
2020
2021
2021
2022
2022
2022
2023
2023
2023
2023
2024
2024
2025
2025
2026
2026
2026
2027
2027
2028
2028
2028
2028
15 October
19 February
1 October
17 March
24 September
17 March
9 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
14 March
19 September
21 September
23 October
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
-
126.00
136.00
101.00
106.00
88.50
43.00
89.00
-
114.50
255.00
173.00
156.50
173.00
113.00
-
-
-
-
8,875
10,875
10,620
18,322
46,323
-
71,000
10,000
-
70,000
64,500
114,331
152,620
303,905
457,310
438,430
-
479,448
534,000
613,500
449,500
200,000
100,000
4,181,059
-
-
-
-
21
27
33
39
45
-
51
51
-
58
64
70
75
81
87
93
-
99
105
111
117
117
118
96
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
-
-
-
-
4,079,616
10
14
21
27
33
39
45
51
57
59
63
63
66
70
76
82
87
93
99
105
108
111
117
-
-
-
-
95
31 Dec 2018
£
31 Dec 2017
£
1,710,557
203,080
1,495,282
1,659,053
153,569
1,154,916
3,408,919
2,967,538
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.
46
Bango PLC | Annual Report 2018
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:
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.
31 Dec 2018
£
31 Dec 2017
£
246,581
899,444
76,695
157,906
631,624
136,515
1,222,720
926,045
Bango has finance leases for technical computer equipment, software and leasehold equipment. The leases will terminate between
October 2020 and November 2021. 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
The present value of finance lease liabilities is repayable as follows:
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
31 Dec 2018
£
31 Dec 2017
£
134,034
158,165
112,202
187,012
292,199
299,214
(18,150)
(21,631)
274,049
277,583
31 Dec 2018
£
31 Dec 2017
£
121,968
152,081
99,889
177,694
274,049
277,583
31 Dec 2018
£
31 Dec 2017
£
6,518,026
1,615,257
1,207,280
4,588,608
1,585,037
1,867,394
9,340,563
8,041,039
6,690,482
1,034,824
270,070
1,345,187
5,776,979
679,023
188,496
1,396,541
9,340,563
8,041,039
Bango PLC | Annual Report 2018
47
Notes to the financial statements
11 Loss before taxation
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
Non-recurring items
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 2018
£
31 Dec 2017
£
6,000
67,600
10,000
7,550
28,800
35,250
5,000
57,000
10,000
10,200
5,400
62,300
237,157
226,716
67,696
51,458
(59,056)
(52,086)
112,186
157,884
1,345,187
-
60,427
128,069
1,088,119
308,422
-
59,463
31 Dec 2018
No
31 Dec 2017
No
10
4
7
27
3
34
85
8
6
11
22
3
28
78
31 Dec 2018
£
31 Dec 2017
£
5,049,913
470,903
433,289
1,034,824
3,703,149
410,141
206,436
679,023
6,988,929
4,998,749
Included in the above payroll costs is £2,359,442 (31 December 2017: £1,340,684) capitalized within internal development (note 5.2).
48
Bango PLC | Annual Report 2018
Notes to the financial statements
The Directors have identified nineteen (31 December 2017: sixteen) 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
13 Directors
Remuneration in respect of Directors was as follows:
Emoluments
31 Dec 2018
£
1,721,526
198,718
55,858
515,683
31 Dec 2017
£
1,299,167
1352,147
22,531
306,788
2,491,785
1,780,633
31 Dec 2018
£
31 Dec 2017
£
661,448
630,533
Further details can be found in the Remuneration Committee Report). The highest paid Director received total salary of £217,200 (31
December 2017: £206,250), pension contributions of £5,105 (31 December 2017: £2,255), and share based compensation of £88,156 (31
December 2017: £50,908).
The number of Directors who accrued benefits under pension schemes was three (31 December 2017: three).
The total share based compensation for Directors was £264,871 (31 December 2017: £155,816).
For details of Directors options please see the Directors and their interest section of the Directors’ report.
During the year Bango was invoiced £28,379 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.
During the year Bango was invoiced £6,600 by Egan and Talbot Limited, a company of which Martin Rigby is a director. The
amount invoiced relates to consultancy work carried out by Martin Rigby in the year.
14 Investment income
Bank interest receivable
31 Dec 2018
£
14,805
31 Dec 2017
£
20,858
Bango PLC | Annual Report 2018
49
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
Deferred tax
31 Dec 2018
£
(634,889)
(17,270)
8,526
(13,968)
(48,766)
31 Dec 2017
£
(421,215)
(8,126)
18,953
(76,598)
-
(706,367)
(486,986)
Income tax expense for the year differs from the standard rate of taxation as follows:
Loss on ordinary activities before taxation
(3,569,906)
(3,922,139)
Loss on ordinary activities multiplied by standard rate of tax of 19.00% (31 December
2017: 19.25%)
Effect of:
Expenses not deductible for tax purposes
Fixes asset differences
Deferred tax not recognized
Additional deductions for R&D expenditure
Surrender of tax losses for R&D
Tax paid overseas
Adjustments in relation to prior years
Share scheme deductions
Total tax
(678,283)
(755,012)
222,294
3,398
347,434
(706,141)
197,034
8,526
(31,238)
(69,391)
146,477
2,290
307,045
(382,944)
260,932
18,953
(84,727)
-
(706,367)
(486,986)
At 31 December 2018, the unutilized tax losses carried forward amounted to £33.1 million (at 31 December 2017: £33.2 million).
Deferred tax assets/ (liabilities):
Share option deduction
Tax losses
Other temporary differences
Accelerated capital allowances and capitalized
development costs
Provided
31 Dec 2018
Provided
31 Dec 2017
Unprovided
31 Dec 2018
Unprovided
31 Dec 2017
£
£
£
£
-
723,089
-
-
546,870
(5,016)
365,217
4,176,326
-
757,736
4,558,279
-
(832,483)
(541,854)
-
-
(109,394)
-
4,541,543
5,316,015
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.
50
Bango PLC | Annual Report 2018
Notes to the financial statements
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 2018
£
(2,863,539)
31 Dec 2017
£
(3,435,153)
Weighted average number of ordinary shares in issue
69,736,418
65,768,111
Earnings (basic) per share
(4.11) p
(5.22) p
(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 2018
£
(2,863,539)
31 Dec 2017
£
(3,435,153)
69,736,418
65,768,111
(4.11) p
(5.22) p
At 31 December 2018 options over 4,181,059 (31 December 2017: 4,079,616) 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
(Decrease)/increase in payables
Corporation tax rebate
Tax paid overseas
Net cash used by operations
18 Financial assets and liabilities
31 Dec 2018
£
(2,863,539)
1,615,257
(706,367)
(14,805)
67,696
(45,461)
1,034,824
(417,382)
(691,221)
(2,020,998)
438,485
(8,526)
31 Dec 2017
£
(3,435,153)
1,585,037
(468,033)
(20,858)
51,458
(151,350)
679,023
(1,393,322)
2,431,490
(721,708)
486,986
(18,953)
(1,591,039)
(253,675)
Financial assets included in the statement of financial position relate to the following IFRS 9 categories:
Financial assets held at amortized cost
Total financial assets
31 Dec 2018
£
31 Dec 2017
£
5,252,716
5,966,092
5,252,716
5,966,092
Bango PLC | Annual Report 2018
51
Notes to the financial statements
These financial assets are included in the statement of financial position within the following headings:
Short term financial assets
Trade and other receivables
Cash and cash equivalents
Total financial assets
31 Dec 2018
£
31 Dec 2017
£
1,437,789
3,814,927
1,118,889
4,847,203
5,252,716
5,966,092
Financial liabilities included in the statement of financial position relate to the following IFRS 9 categories:
Financial liabilities measured at amortized cost
Total financial liabilities
31 Dec 2018
£
31 Dec 2017
£
3,205,839
2,813,968
3,205,839
2,813,968
These financial liabilities are included in the statement of financial position within the following headings:
Financial liabilities
Trade payables
Accruals
Total financial liabilities
19 Credit risk analysis
31 Dec 2018
£
31 Dec 2017
£
1,710,557
1,495,282
1,659,053
1,154,916
3,205,839
2,813,969
Bango’s exposure to credit risk is limited to the carrying amount of financial assets and cash and cash equivalents recognized at the
statement of financial position 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 the expected credit loss on financial assets that are past due. See note 6 for further information on
trade receivables that are past due.
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.
52
Bango PLC | Annual Report 2018
Notes to the financial statements
At 31 December 2018 Bango’s financial liabilities had contractual maturities which are summarized below:
31 Dec 2018
£
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
3,205,839
60,176
61,792
152,081
31 Dec 2017
£
2,813,968
56,096
43,793
177,694
Financial liabilities
3,479,888
3,091,551
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. Going concern is assessed based on sufficiency of cash resources, through trading and equity issues to
mitigate liquidity risk.
At 31 December 2018 Bango only had finance lease liabilities.
Capital for the reporting year under review is summarized as follows:
Overall financing
Capital
31 Dec 2018
£
31 Dec 2017
£
31 Dec 2018
£
31 Dec 2017
£
15,968,500
-
274,049
10,723,438
-
277,583
15,968,500
(3,814,927)
-
10,723,438
(4,847,203)
--
16,242,549
11,001,021
12,153,573
5,876,235
Total equity
Less cash and cash equivalents
Plus borrowings
The capital to overall financing ratio is 74.8% (2017: 53.4%).
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
South African Rand
ZAR
Saudi Arabian Riyal
SAR
Japanese Yen JPY
£
Financial
assets
31 Dec 2018
£
Financial
liabilities
£
Net assets/
(liabilities)
£
Financial
assets
31 Dec 2017
£
Financial
liabilities
£
Net assets/
(liabilities)
1,203,401
973,510
229,891
1,943,192
709,589
1,233,603
1,059,177
1,136341
(77,164)
65,488
18,881
58,345
70,154
27,196
14,201
40,811
793,516
-
-
-
-
58,345
42,995
70,154
72,635
27,196
14,201
35,094
4,991
-
21,433
40,811
772,083
40,752
1,329,942
-
-
-
782
-
723,079
46,607
42,995
72,635
35,094
4,209
40,752
606,863
Bango PLC | Annual Report 2018
53
Notes to the financial statements
Other
54,039
19,913
32,124
68,112
22,829
45,283
Short term exposure
3,374,879
2,171,110
1,201,767
3,603,200
1,475,160
2,124,808
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 the sterling strengthened by 5% then the effect on the statement of financial position
would be a loss of £55,697 and if it moved by 10% then there would be a total loss of £106,331.
23 Acquisitions in the year
Acquisition of Audiens S.R.L
On 23 January 2018 Bango acquired Audiens SRL for cash, shares, share warrants and a deferred consideration from Digitouch SPA
and other angel investors. Audiens SRL is a customer data platform (CDP) based in Milan which has developed a means for third
parties to better segment and organize their data either for their own use or to sell through trading desks.
The acquisition of 98.45% of the Audiens SRL capital was for cash (€1.48m) paid immediately, cash (€0.63m) paid over 12 months to
settle a debt balance to Digitouch, 521,803 ordinary shares in Bango PLC (€1.2m), share warrants at an exercise price of £1.80 per
share with a ten year life over 738,399 ordinary shares (€0.84m). The final acquisition for 1.55% of the Audiens shares owned by
Marko Maras the CEO of Audiens is linked a call and put option agreement valid for 2 years from the acquisition. The call and put
agreement terms are linked to the long term revenue targets for the business and the underlying Bango PLC share price. Substantially
all of the risks and rewards of the non-controlling interest in the Audiens business are considered to have transferred to Bango.
The net assets acquired were as follows:
Intangible assets – software
Intangible assets – brand
Goodwill
Fair value of assets
Fair value of cash
Fair value of liabilities
Assets acquired
Satisfied by:
Cash
Share consideration (521,803 shares)
Share warrants (738,399 shares)
Deferred consideration
Put/Call warrant
Total consideration
Fair value
Fair value
€
2,112,664
89,535
2,900,518
438,317
66,730
(710,114)
4,897,650
£
1,855,873
78,657
2,548,405
385,063
58,623
(623,730)
4,302,891
Fair value
Fair value
€
1,476,750
1,187,937
835,113
623,000
775,182
£
1,297,329
1,043,606
733,649
547,307
681,000
4,897,982
4,302,891
Following a detailed review of the fair value of the assets by an independent third party, acquired in accordance with IFRS3 Business
Combinations, Bango has recognized intangible assets being software and trade names, totaling £1.93m, net liabilities of £0.18m and
goodwill totaling £2.55m. Goodwill represents the excess of the purchase price over the fair value of the assets acquired. The goodwill
arising on the acquisition is largely attributable to the added value associated with future monetization through new customer
relationships and the value of the existing workforce.
Acquisition-related costs amounting to £0.28m are not included as part of consideration transferred and have been recognized as
an expense in the consolidated statement of profit or loss, as part of administrative expenses.
Audiens SRL contributed £1.37m of revenue and £0.71m to the consolidated loss from date of acquisition.
54
Bango PLC | Annual Report 2018
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
Other reserve
Retained earnings
Total equity
LIABILITIES
Trade and other falling due within one year
Total liabilities
Total equity and liabilities
Note
31 Dec 2018
£
31 Dec 2017
£
4
5
5
8
9
9
9
6
48,430,309
6,277,584
29,684,765
17,209,241
54,707,893
46,894,006
29,105
29,105
27,721
27,721
54,736,998
46,921,727
14,053,582
35,796,976
1,672,894
3,159,661
13,284,561
31,248,453
-
2,372,006
54,683,113
46,905,020
53,885
53,885
16,707
16,707
54,736,998
46,921,727
These financial statements were approved by the Directors on 18 March 2019 and are signed on their behalf by:
R Anderson
Director
C Rand
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 £247,169 (2017: £94,913).
The notes on pages 58 to 61 are an integral part of these consolidated financial statements
Bango PLC | Annual Report 2018
55
Statement of changes in equity of Bango PLC
Balance at 1 January 2017
Share based payments
Exercise of share options
Transactions with owners
Share
capital
£
13,029,124
-
255,437
255,437
Share
premium
£
30,323,341
-
925,112
925,112
Loss for the year
Total comprehensive income
for the year
Balance at 31 December 2017
-
-
-
13,284,561
-
31,248,453
Other
reserve
£
-
-
-
-
-
-
-
Retained
earnings
£
1,787,896
679,023
-
679,023
Total
£
45,140,361
679,023
1,180,549
1,859,572
(94,913)
(94,913)
(94,913)
2,372,006
(94,913)
46,905,020
Balance at 1 January 2018
Share based payments
Exercise of share options
Issue of shares
Expenses of share issue
Issue of warrants
Transactions with owners
Loss for the year
Total comprehensive income
for the year
Balance at 31 December 2018
13,284,561
-
106,882
662,139
-
-
769,021
31,248,453
-
419,092
4,462,224
(332,793)
-
4,548,523
-
-
-
-
-
-
-
939,245
-
733,649
1,672,894
-
-
2,372,006
1,034,824
-
-
-
-
1,034,824
(247,169)
(247,169)
46,905,020
1,034,824
525,974
6,063,608
(332,793)
733,649
8,025,262
(247,169)
(247,169)
14,053,582
35,796,976
1,672,894
3,159,661
54,683,113
The notes on pages 58 to 61 are an integral part of these consolidated financial statements
56
Bango PLC | Annual Report 2018
Cashflow statement of Bango PLC
Loss for year
Cash flows from operating activities
(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
31 Dec 2018
£
31 Dec 2017
£
(247,169)
(94,913)
(8,806)
44,601
(31,700)
(9,666)
(211,374)
(136,279)
(5,001,707)
(100)
(1,044,170)
(100)
(5,001,807)
(1,044,270)
5,545,974
(332,793)
1,180,549
-
Net cash generated from financing activities
5,213,181
1,180,549
Net increase in cash and cash equivalents
Cash and cash equivalents at beginning of year
Cash and cash equivalents at end of year
-
-
-
-
-
-
The notes on pages 58 to 61 are an integral part of these consolidated financial statement
Bango PLC | Annual Report 2018
57
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 2018, 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.
Financial assets and liabilities
IFRS 9 replaces IAS 39 ‘Financial Instruments: Recognition and Measurement’. This changes the guidance on classification and
measurement of financial assets, and introduces an “expected credit loss” model for the impairment of financial assets.
When adopting IFRS 9, Bango has applied transitional relief and opted not to restate prior periods.
As accounting for financial liabilities remains largely the same under IFRS 9 compared to IAS 39, Bango’s financial liabilities were not
impacted by the adoption of IFRS 9. Financial liabilities 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.
Other reserve
Other reserve represents the excess over nominal value for equity shares issued as part of a business acquisition where at least 90%
of the entity is acquired and the initial present value of warrants issued over equity shares.
Retained earnings
Retained earnings include all current and prior period retained profits.
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.
58
Bango PLC | Annual Report 2018
Notes to the financial statements
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 £110,691 (31 December 2017: £105,797) 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 2017
Share based payments
Investment in Bango Deep Ltd
Capitalization of intercompany loan (1,771,062 shares)
Shares in subsidiary undertakings at 31 December 2018
Net book amount
At 31 December 2018
At 31 December 2017
£
29,684,765
1,034,824
100
17,710,620
48,430,309
48,430,309
29,684,765
Fixed asset investments are shown at cost less provision for impairment.
Details of subsidiary undertakings at 31 December 2018 are as follows:
Country of
incorporation
Class of
share capital
held
Held by the
company
Nature of business
Bango.net Limited
England & Wales
Ordinary
100%
Bango Movil
Spain
Ordinary
Bango SP Limited
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
England & Wales
England & Wales
Ordinary
Ordinary
Brazil
Ordinary
Nigeria
Japan
USA
USA
USA
Ordinary
Ordinary
Common
Common
Common
Ordinary
Ordinary
Ordinary
Ordinary
Bango Payments Limited
Bango Deep Limited
Audiens Limited
Audiens SRL***
England & Wales
England & Wales
England & Wales
Italy
Development, marketing and
sale of technology for mobile
phone users to purchase
services for their mobile phones
Support for Bango.net Limited
Non-trading
Non-trading
Non-trading
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
Holding company
Non-trading
Trading entity in Italy
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
98.45%
*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)
***98.45% owned by Bango Deep Ltd (100% owned subsidiary of Bango PLC)
Bango PLC | Annual Report 2018
59
Notes to the financial statements
5 Receivables
Amounts due from Group undertakings (due after one year)
Other receivables (due within one year)
31 Dec 2018
£
31 Dec 2017
£
6,277,584
29,105
17,209,241
27,721
6,306,689
17,236,962
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. During the year the majority of the loan to Bango.net Limited was capitalized,
with the issue of 1,771,062 shares.
6 Payables
Trade payables
Accruals and deferred income
7 Financial assets and liabilities
31 Dec 2018
£
31 Dec 2017
£
18,176
35,709
8,148
8,559
53,885
16,707
Financial assets included in the statement of financial position relate to the following IFRS 9 categories:
Financial assets held at amortized cost
Total financial assets
31 Dec 2018
£
31 Dec 2017
£
6,306,689
17,229,540
6,306,689
17,229,540
These financial assets are included in the statement of financial position within the following headings:
Current financial assets
Other receivables
Non-Current financial assets
Amounts due from Group undertakings
Total financial assets
Financial liabilities held at amortized cost
Total financial liabilities
31 Dec 2018
£
31 Dec 2017
£
29,105
20,299
6,277,584
17,209,241
6,306,689
17,229,540
31 Dec 2018
£
31 Dec 2017
£
53,885
53,885
16,707
16,707
These financial liabilities are included in the statement of financial position within the following headings:
Current financial liabilities
Trade payables
Accruals
Total financial liabilities
31 Dec 2018
£
31 Dec 2017
£
18,176
35,709
53,885
8,148
8,559
16,707
60
Bango PLC | Annual Report 2018
Notes to the financial statements
8 Share capital
Allotted, called up and fully paid:
Ordinary shares of 20p each in Bango PLC
As at 31 December 2016
Exercise of share options
As at 31 December 2017
Issue of new shares
Exercise of share options
As at 31 December 2018
No
£
65,145,618
13,029,124
1,277,185
255,437
66,422,803
13,284,561
3,310,693
534,412
662,139
106,882
70,267,908
14,053,5852
During the year 534,412 share options were exercised at exercise prices between 43 pence and 136 pence and a par value of 20
pence per share. The total proceeds were £0.52m of which £0.10m was recognized as share capital and £0.42m as share premium.
During the year 1,410,000 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 4,181,059 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 2018
Issue of new shares
Cost of issuing new shares
Exercise of share options
Share based payments
Issue of warrants
Loss for the year
At 31 December 2018
Share
Premium Account
£
Other
reserve
£
Retained
earnings
£
31,248,453
-
2,372,006
4,462,224
(332,793)
419,092
-
-
-
939,245
-
-
733,649
-
-
-
-
1,034,824
-
(247,169)
35,796,976
1,672,894
3,159,661
An adjustment has been made out of the share based payment reserve for share options exercised in the year. The other reserve
comprises the issue of warrants and share premium relating to the acquisition of Audiens SRL. See note 23 in the Group accounts
for more details.
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 2018
£
46,905,020
525,974
1,034,824
5,124,363
(332,793)
(247,169)
31 Dec 2017
£
45,140,361
1,180,549
679,023
-
-
(94,913)
53,010,219
46,905,020
The distributable reserves as at 31 December 2018 from Bango PLC are £1,179,222 (2017: £747,368).
Bango PLC | Annual Report 2018
61
Notice of Annual General Meeting
THE COMPANIES ACTS 1985 TO 2006
NOTICE OF THE ANNUAL GENERAL MEETING OF BANGO PLC
NOTICE IS HEREBY GIVEN that the Annual General Meeting of Bango PLC (“Bango”) will be held at the offices of Bango, 5
Westbrook Centre, Cambridge, CB4 1YG on Friday, 17 May 2019 at 2 pm for the following purposes.
ORDINARY BUSINESS
As ordinary business to consider and, if thought fit, pass resolutions 1 to 6 as ordinary resolutions.
1. To receive and adopt the annual accounts of Bango for the year ended 31 December 2018 together with the reports of
the Directors and auditors on those accounts.
2. To re-elect Raymond Anderson who retires by rotation and offers himself for re-appointment by general meeting, as a
Director of Bango.
3. To re-elect Gianluca D’Agostino who retires by rotation and offers himself for re-appointment by general meeting, as a
Director of Bango.
4. To re-elect Carolyn Rand, who, having been appointed since the last General Meeting, retires and offers herself for re-
appointment by general meeting, as a Director of Bango.
5. To re-elect Nancy Cruickshank, who, having been appointed since the last General Meeting, retires and offers herself for
re-appointment by general meeting, as a Director of Bango.
6. To re-elect Grant Thornton UK LLP as auditors and to authorize the Directors to determine the auditors’ remuneration.
SPECIAL BUSINESS
As special business to consider and, if thought fit, pass resolution 7 as an ordinary resolution and resolutions 8 and 9 as special
resolutions.
7. That, pursuant to and in accordance with Section 551 of the Companies Act 2006 (the ”Act”), the Directors be and are
hereby generally and unconditionally authorized and empowered to exercise all the powers of Bango to allot shares
and/or grant rights to subscribe for or to convert any security into shares (“Rights”):
a) up to an aggregate nominal value of £4,687,500 (being the nominal value of approximately one third of Bango’s issued
share capital); and
b) up to an aggregate nominal value of £9,375,000 (being the nominal value of approximately two thirds of Bango’s issued
share capital) (such amount to be reduced by the nominal amount of any shares allotted or Rights granted under
paragraph a)) in connection with an offer by way of a rights issue or other pre-emptive offer to:
i.
ii.
the holders of ordinary shares of £0.20 each in the capital of Bango (“Ordinary Shares”) in proportion (as
nearly as may be practicable) to the respective number of Ordinary Shares held by them; and
the holders of other equity securities, as required by the rights of those securities, or subject to such rights
as the directors otherwise consider necessary,
such authority to expire on the conclusion of the next Annual General Meeting of Bango following the passing of this
resolution or, if earlier, the date 15 months after the date of passing this resolution, save that Bango may at any time
before such expiry make any offer(s) or enter into any agreement(s) which would or might require shares to be allotted
or Rights to be granted after such expiry and the Directors may allot shares or grant Rights in pursuance of any such
offer(s) or agreement(s) as if the power and authority conferred by this resolution had not expired. This resolution revokes
and replaces all unexercised authorities previously granted to the Directors to allot shares or grant Rights but without
prejudice to any allotment of shares or grant of Rights already made, offered or agreed to be made pursuant to such
authorities.
8. That subject to and conditional upon the passing of resolution 7 above, the directors be and are hereby generally
authorized in accordance with section 570 of the Act to allot equity securities (as defined in section 560 of the Act) of
Bango for cash as if section 561(1) of the Act did not apply to any such allotment, provided that this authority shall be
limited to:
a)
the allotment of equity securities in connection with an offer by way of a rights issue or other pre-emptive offer to:
62
Bango PLC | Annual Report 2018
Notice of Annual General Meeting
i.
ii.
the holders of Ordinary Shares in proportion (as nearly as may be practicable) to the respective number
of Ordinary Shares held by them; and
the holders of other equity securities, as required by the rights of those securities, or subject to such rights
as the directors otherwise consider necessary,
but (in each case) subject to such exclusions or other arrangements as the directors may deem necessary or expedient
to deal with fractional entitlements or legal or practical problems in respect of overseas holders or otherwise; and
b)
the allotment of equity securities (otherwise than pursuant to sub-paragraph (a) above) up to a maximum aggregate
nominal value of £703,100 (being the nominal value of approximately 5% of the issued share capital of Bango),
and this authority shall expire on the conclusion of the next Annual General Meeting of Bango following the passing of
this resolution or, if earlier, the date 15 months after the date of passing this resolution save that Bango may at any time
before such expiry make any offer(s) or enter into any agreement(s) which would or might require equity securities to be
allotted after such expiry and the Directors may allot equity securities pursuant to any such offer(s) or agreement(s) as if
the power and authority conferred by this resolution had not expired. This resolution revokes and replaces all unexercised
authorities previously granted to the Directors to allot equity securities but without prejudice to any allotment of equity
securities already made, offered or agreed to be made pursuant to such authorities.
9. That subject to and conditional upon the passing of resolution 7 above, the directors be and are hereby generally
authorized in accordance with section 570 of the Act, in addition to any authority granted under resolution 8, to allot
equity securities (as defined in section 560 of the Act) of Bango for cash as if section 561(1) of the Act did not apply to
any such allotment, provided that this authority shall be:
a)
limited to the allotment of equity securities (otherwise than pursuant to sub-paragraph (a) of resolution 8 above) up to a
maximum aggregate nominal value of £703,100 (being the nominal value of approximately 5% of the issued share capital
of Bango); and
b) used only for the purpose of financing (or refinancing, if the authority is to be used within six months after the original
transaction) a transaction which the Directors of Bango determine to be an acquisition or other capital investment of a
kind contemplated by the Statement of Principles on Disapplying Pre-Emption Rights most recently published by the Pre-
Emption Group prior to the date of this notice,
and this authority shall expire on the conclusion of the next Annual General Meeting of Bango following the passing of
this resolution or, if earlier, the date 15 months after the date of passing this resolution save that Bango may at any time
before such expiry make any offer(s) or enter into any agreement(s) which would or might require equity securities to be
allotted after such expiry and the Directors may allot equity securities pursuant to any such offer(s) or agreement(s) as if
the power and authority conferred by this resolution had not expired. This resolution revokes and replaces all unexercised
authorities previously granted to the Directors to allot equity securities but without prejudice to any allotment of equity
securities already made, offered or agreed to be made pursuant to such authorities.
By order of the Board,
Rachel Greenhalgh
Company Secretary
19 March 2019
Bango PLC | Annual Report 2018
63
Notice of Annual General Meeting
Notes:
1. Only those shareholders registered in the register of members of Bango at 2:00 pm on Wednesday, 15 May 2019 (or not
later than 48 hours (excluding days that are not a working day) before the start of any adjournment of the meeting) shall
be entitled to attend, speak and vote at this Annual General Meeting in respect of such number of shares registered in
their name at that time. Changes to entries on the register of members after this time shall be disregarded in determining
the rights of any person to attend or vote at the meeting.
2.
If you wish to attend the Annual General Meeting in person, please ensure you have identification documentation with you
in order to gain admission.
3. As at 5:00 pm on Friday, 15 March 2019, which is the latest practicable date before publication of this notice, the issued
share capital of Bango was 70,314,412 ordinary shares of £0.20 each and the total number of voting rights was 70,314,412.
4. Only holders of Ordinary Shares are entitled to attend and vote at this meeting. A member entitled to attend and vote at
the meeting is entitled to appoint another person as his proxy to exercise all or any of his rights to attend and to speak
and vote at the meeting and at any adjournment of it. Such a member may appoint more than one proxy in relation to the
meeting, provided that each proxy is appointed to exercise the rights attached to a different share or shares held by that
member. A member may only appoint a proxy using the procedures set out in these notes and the notes to the proxy
form. A proxy need not be a member. Completion and return of a form of proxy will not preclude a member from
attending and voting in person at the meeting or any adjournment of the meeting.
5. A form of proxy is provided with this notice and instructions for use are shown on the form. To be effective, the completed
form of proxy must be deposited at the registered office of Bango, 5 Westbrook Centre, Cambridge, CB4 1YG, by not later
than 2:00 pm on Wednesday, 15 May 2019 (or not later than 48 hours (excluding days that are not a working day) before
the start of any adjournment of the meeting) together with, if appropriate, the original power of attorney or other authority
(if any) under which it is signed or a notarially certified or office copy of such power of authority.
6. A vote withheld option is provided on the form of proxy to enable you to instruct your proxy not to vote on any particular
resolution, however, it should be noted that a vote withheld in this way is not a ‘vote’ in law and will not be counted in the
calculation of the proportion of the votes ‘For’ and ‘Against’ a resolution.
7.
In order to revoke a proxy appointment you will need to inform Bango by sending a signed hard copy notice clearly
stating your intention to revoke your proxy appointment to the registered office of Bango, 5 Westbrook Centre,
Cambridge, CB4 1YG, by not later than 2:00 pm on Wednesday, 15 May 2019 (or not later than 48 hours (excluding days
that are not a working day) before the start of any adjournment of the meeting) together with, if appropriate, the original
power of attorney or other authority (if any) under which it is signed or a notarially certified or office copy of such power of
authority. If you attempt to revoke your proxy appointment but the revocation is received after the time specified then,
unless you attend the meeting in person, your proxy appointment will remain valid.
8. A corporation which is a shareholder can appoint one or more corporate representatives who may exercise, on its behalf,
all its powers as a shareholder provided that no more than one corporate representative exercises powers over the same
share.
9. Copies of the service agreements of the Executive Directors and the letters of appointment of the Non-Executive Directors
will be available for inspection during normal business hours from the date of dispatch of this notice until the date of the
meeting (Saturdays, Sundays and public holidays excepted) at the registered office of Bango and will also be made
available for inspection at the place of the Annual General Meeting for a period of 15 minutes prior to and during the
continuance of the meeting.
10. Copies of this notice, and information regarding this Annual General Meeting, including the information required by
section 311A of the Companies Act 2006, can be found at https://bangoinvestor.com/announcements/.
11. Except as provided above, members who wish to communicate with Bango in relation to the meeting should do so by
calling Bango’s Company Secretary on +44 333 077 0222 or +44 7824 145 731. No other methods of communication will be
accepted.
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Bango PLC | Annual Report 2018
Form of Proxy
For use at the Annual General Meeting to be held at the offices of Bango, 5 Westbrook Centre, Cambridge, CB4 1YG on Friday, 17
May 2019 at 2 pm
Before completing this form, please read the explanatory notes at the end of this form.
Name of shareholder _________________________________________________________________________________
Address ____________________________________________________________________________________________
___________________________________________________________________________________________________
Number of shares held ________________________________________________________________________________
I/We, being [a] member[s] of Bango PLC, hereby appoint the chair of the meeting or (see note 3)
________________________________________________________________________________________________
as my/our proxy (see note 4) to attend, speak and vote for me/us on my/our behalf at the Bango Annual General Meeting to be
held at 2 pm on Friday, 17 May 2019 and at any adjournment of the meeting.
I/We have indicated with an 'X' in the appropriate spaces how I/we wish my/our votes to be cast and direct the proxy to vote as
indicated.
If this form is signed and returned without any indication as to how my/our proxy shall vote, my/our proxy may exercise his or her
discretion as to both how he or she votes (including as to any amendments to the resolutions) and whether or not he or she abstains
from voting and I/we authorize my/our proxy to vote (or abstain from voting) as he or she thinks fit in relation to any other matter
which is put before the meeting.
FOR
AGAINST
WITHHELD
DISCRETIONARY
RESOLUTION
(Place X in appropriate box)
Ordinary business
1. To receive and adopt the accounts for the
year ended 31 December 2018
2. To re-elect Raymond Anderson as a
Director
3. To re-elect Gianluca D’Agostino as a
Director
4. To re-elect Carolyn Rand as a Director
5. To re-elect Nancy Cruickshank as a
Director as a Director
6. To re-appoint Grant Thornton UK LLP
as auditors and authorize the Directors
to fix the auditors’ remuneration
Special business
7. To authorize the Directors to allot shares
pursuant to section 551 of the
Companies Act 2006 (the "Act"), subject
to the provisions as set out in the notice
8. In accordance with section 570 of the
Act, to authorize the Directors to allot
shares as if section 561(1) of the Act did
not apply, on a non-pre-emptive basis,
and otherwise pre-emptively, subject to
the provisions as set out in the notice
9. In accordance with section 570 of the
Act, to authorize the Directors to allot
shares as if section 561(1) of the Act did
not apply, on a non-pre-emptive basis
for the purposes of financing or
refinancing an acquisition or other
capital investment, subject to the
provisions as set out in the notice
Signature
…………………………………
Date
……………………………….
Signature
…………………………………
Date
……………………………….
Bango PLC | Annual Report 2018
65
Explanatory notes
Notes for completion of the proxy form
1. As a member of Bango you are entitled to appoint another person as your proxy to exercise all or any of your rights to
attend, speak and vote at a general meeting of Bango. You must follow the appointment procedures set out in these
notes. If the proxy is being appointed in relation to part of your holding only, please enter in the box next to the proxy’s
name the number of shares in relation to which they are authorized to act as your proxy. If this box is left blank they will
be authorized in respect of your full voting entitlement.
2. Completion and return of this proxy form will not preclude you from attending the meeting and voting in person. If you
have appointed a proxy and attend the meeting in person, your proxy appointment will automatically be terminated.
3. A proxy does not need to be a member of Bango but must attend the meeting to represent you. To appoint as your proxy
a person other than the chair of the meeting, insert their full name in the box. If you sign and return this proxy form with
no name inserted in the box above, the chair of the meeting will be deemed to be your proxy. Where you appoint as your
proxy someone other than the chair, you are responsible for ensuring that they attend the meeting and are aware of your
voting intentions. If you wish your proxy to make any comments on your behalf at the meeting, you will need to appoint
someone other than the chair and give them the relevant instructions directly.
4.
If you appoint a proxy to vote on your behalf at this Annual General Meeting, your voting rights will revert to you at the
conclusion of the Annual General Meeting or any adjournment of the Annual General Meeting.
5. You may appoint more than one proxy provided each proxy is appointed to exercise rights attached to different shares. To
appoint more than one proxy, please insert the name of each proxy to be appointed in the box above and insert in
brackets after each name the number of shares in respect of which each respective proxy is appointed.
6. To direct your proxy how to vote on the resolutions, please indicate how you wish your votes to be cast by placing ‘X’ in
the appropriate column. To abstain from voting on a resolution, select the relevant "Vote withheld" box. Please note that a
vote withheld is not a vote in law, which means that the vote will not be counted in the calculation of votes for or against
the resolution. If you either select the "Discretionary" option or if no specific direction as to how you wish your vote to be
cast is given, your proxy may vote or abstain, at his or her discretion. On any other business which is put before the
meeting (including a motion to adjourn the meeting or to amend a resolution) the proxy will vote (or abstain from voting)
at his or her discretion.
a
7. To be valid, this proxy form must be:
completed and signed;
sent or delivered to the Company Secretary at Bango, 5 Westbrook Centre, Cambridge, CB4 1YG; and
received by the Company Secretary no later than 2 pm on Wednesday, 15 May, 2019.
b
c
8.
If a member is a company, this proxy form must be executed under its common seal (or such form of execution as has the
same effect) or executed on its behalf by a duly authorized officer of the company or an attorney for the company. A
copy of the authorization of such officer or attorney must be lodged with this proxy form.
9.
If this proxy form is executed under a power of attorney or any other authority the original power or authority (or a duly
certified copy of such power or authority) must be lodged together with this proxy form.
10. In the case of joint holders, any one holder may sign the form of proxy but all the names of the joint holders should be
stated on this proxy form. If more than one of the joint holders purports to appoint a proxy, the appointment submitted by
the most senior holder will be accepted to the exclusion of the appointment(s) of the other joint holder(s), seniority being
determined by the order in which the names of the joint holders stand in the register of members of Bango in respect of
the joint holding (the first-named being the most senior).
11. If you submit more than one valid proxy appointment in respect of the same shares, the appointment received last before
the latest time for the receipt of proxies will take precedence.
12. Any alterations made to this form should be initialed.
13. You may not use any fax number or email address or other electronic address provided in this proxy form or the
documents accompanying this proxy form to communicate with Bango for any purposes other than those expressly stated.
If you have any queries completing this form, please contact the Company Secretary on telephone number +44 333 077 0222 or +44
7824 145 731.
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Bango PLC | Annual Report 2018
Explanatory notes
Report and Accounts (Resolution 1)
The Directors of Bango must present the accounts to the meeting.
Re-election of Directors (Resolutions 2, 3, 4 and 5)
The Bango articles of association require that approximately one third of the Board, and any Director newly appointed since the last
AGM, retire and seek re-election at each annual general meeting. Furthermore, in line with good corporate governance practice, it
is Bango practice that any non-executive Director having been in post for nine years or more is subject to annual re-election.
At this meeting, Raymond Anderson and Gianluca D’Agostino will retire and stand for re-election as Directors. Having considered the
performance of and contribution made Raymond Anderson and Gianluca D’Agostino, the Board remains satisfied that their
performance continues to be effective and to demonstrate commitment to the role and, as such, recommends their re-election.
Carolyn Rand and Nancy Cruickshank were appointed as Directors since the last AGM, and so will retire and seek re-election.
Reappointment and remuneration of auditors (Resolution 6)
Resolution 6 proposes the re-appointment of Grant Thornton UK LLP as auditors of Bango and authorizes the Directors to set the
auditors’ remuneration. Grant Thornton has acted as Bango’s auditor for 14 years. In accordance with corporate governance
guidelines, Bango put its audit services out to tender during 2018. Following a thorough tender process, the Board determined that
Grant Thornton was the strongest candidate and should be re-appointed as auditors. The shareholders are invited to approve their
re-appointment as auditors.
Directors’ authority to allot shares (Resolution 7)
Directors may only allot shares or grant rights to subscribe for or to convert any security into shares (“Rights”) if authorized to do so
by the shareholders. Such authorization is not required for the grant of options (or the issue of shares on exercise of such options)
under an employee share scheme. The authority granted at the last Annual General Meeting is due to expire at the conclusion of
this year’s Annual General Meeting. Accordingly, this resolution, which complies with guidance issued by the Investment Association,
seeks to grant a new authority to the Directors to allot shares and/or grant Rights and will expire at the conclusion of the next Annual
General Meeting of Bango or, if earlier, on 17 August 2020 (the date which is 15 months after the date of passing of the resolution).
There is no present intention of exercising this authority, which would give Directors authority to allot shares and/or grant Rights up
to an aggregate nominal value of £4,687,500 (approximately one-third of Bango’s issued ordinary share capital as at 15 March, 2019)
and up to an aggregate nominal value of £9,375,000 (approximately two-thirds of Bango’s issued ordinary share capital as at 15
March, 2019) in connection with an offer by way of a rights issue or other pre-emptive offer.
Disapplication of pre-emption rights (Resolutions 8 and 9)
Under section 561(1) of the Act, if the Directors wish to allot equity securities (as defined in section 560 of the Act) (other than following
an exercise of options granted under an employee share scheme) they must in the first instance offer them to existing shareholders
in proportion to their holdings. There may be occasions, however, when the Directors will need the flexibility to finance business
opportunities by the issue of shares without a pre-emptive offer to existing shareholders. This cannot be done under the Act unless
the shareholders have first waived their pre-emption rights.
Resolution 8 asks the shareholders to do this and, apart from rights issues or any other pre-emptive offer concerning equity securities
and the grant of share options, the authority will be limited to the issue of equity securities for cash up to a maximum nominal value
of £703,100 (being 3,515,500 ordinary shares of £0.20 each), which is equivalent to approximately 5 per cent of Bango’s issued
ordinary share capital as at 15 March, 2019, in line with the Pre-Emption Group 2015 Statement of Principles (“Statement of Principles”)
for the disapplication of pre-emption rights. Resolution 8 also seeks a disapplication of the pre-emption rights on a rights issue so as
to allow the Directors to make exclusions or such other arrangements as may be appropriate to resolve legal or practical problems
which, for example, might arise with overseas shareholders.
Resolution 9 seeks additional approval for the disapplication of pre-emption rights on shares issued for cash up to a further nominal
value of £703,100 (being 3,515,500 ordinary shares of £0.20 each), which is equivalent to approximately 5 per cent of Bango’s issued
ordinary share capital as at 15 March, 2019. This authority can only be exercised in connection with one or more acquisitions or
specified capital investments that the Directors determine fall within the Statement of Principles. The Directors confirm that the
additional 5 per cent authority will only be used in connection with an acquisition or specified capital investment which is announced
contemporaneously with the issue, or which has taken place in the preceding six-month period and is disclosed in the announcement
of the issue.
The Directors will also have regard to the guidance in the Statement of Principles concerning cumulative usage of authorities within
a three-year period. Accordingly, the Board confirms that it does not intend to issue shares for cash representing more than 7.5 per
cent. of Bango’s issued ordinary share capital in any rolling three-year period other than to existing shareholders, save as permitted
in connection with an acquisition or specified capital investment as described above, without prior consultation with shareholders.
Bango PLC | Annual Report 2018
67
Explanatory notes
If resolutions 8 and 9 are passed, the authorities will expire at the conclusion of the next Annual General Meeting of Bango or, if
earlier, 17 August, 2020 (the date which is 15 months after the date of passing of the resolution). Shareholders will note that these
resolutions will be proposed as special resolutions.
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Bango PLC | Annual Report 2018