Annual Report 2019
Contents
Strategic report
Bango at a glance......................................................................................................................................02
Chair’s statement..........................................................................................................................................04
Strategy for growth.....................................................................................................................................05
CEO’s statement...........................................................................................................................................06
CFO’s statement...........................................................................................................................................08
Principal risks and uncertainties..............................................................................................................10
Drivers of exponential growth..................................................................................................................12
Report of Directors
Directors...................................................................................................................................................14
Company information..................................................................................................................................16
Directors’ report..............................................................................................................................................17
Corporate governance report.................................................................................................................19
Audit committee report............................................................................................................................23
Nominations committee report............................................................................................................24
Remuneration committee report.............................................................................................................25
Financial statements
Independent auditor’s report to the members of Bango PLC (Bango)..................................28
Consolidated statement of financial position....................................................................................31
Consolidated statement of comprehensive income......................................................................32
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………………….........................................................56
Statement of changes in equity of Bango PLC................................................................................57
Cash flow statement of Bango PLC....……………......…………………………………………………….........58
Notes to the financial statements….....................................................................................................59
Bango PLC | Annual Report 2019
1
Financial highlights
•
End User Spend (EUS) increased
to £1.1Bn, continuing the five-year
trend of doubling EUS every year
(2018: £0.56Bn)
• Group admin costs were £7.45m
(2018: £6.69m) following a decision
to increase investment in the data
monetization business
• Group revenue increased 41% to
£9.31m (2018: £6.62m)
•
Payment and data monetization
revenue grew
to £7.16m and
£2.15m respectively (2018: £5.25m
and £1.37m)
•
•
Adjusted EBITDA* for the full year was
positive at £0.45m (2018: -£0.87m)
Cash at 31 December 2019 was
£2.69m, an increase from the cash
position at 30 June 2019 of £2.25m
*Adjusted EBITDA is earnings before interest, tax, depreciation, amortiza-
18
16
14
m 12
£
/
s
t
s
o
C
d
n
a
e
u
n
e
v
e
R
10
8
6
4
2
0
EUS, revenue and
Group admin costs
1.2
1.0
0.8
0.6
0.4
0.2
0
n
B
£
/
S
U
E
tion, share based payment charge and exceptional items.
2014
2015
2016
2017
2018
Revenue
Group admin
costs
EUS
“Bundling a number of services is part of our strategy and working with partners such
as Bango, I don’t have to do it myself. We’re very pleased to be one of their ecosystem
partners and the work we’ve done on the Google Play store and Amazon Prime and
Google is hopefully the start of a healthy relationship for many years to come.”
TELUS on Bango
Ibrahim Gedeon, Chief Technology Officer at Canadian operator TELUS talking about
their partnership with Bango.
“It’s up to us and our partners to have an ecosystem that delivers both privacy and
security, but at the same time inserts us into this new world order of how we would
generate revenue. There’s a massive opportunity for us to leverage these insights to
improve the client experience and generate revenue at the same time. We work with
Bango because they share our DNA on how we treat customers’ security and privacy”
2
Bango PLC | Annual Report 2019
Bango 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 places people
at the centre of commerce delivering
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.
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. Bango Marketplace makes
the power of these insights 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 spend over $100Bn on apps a
year, and app developers around $50Bn
in marketing to grow their businesses.
For Bango, with its unique new product
to
improve marketing and payment
efficiency, there is a large and strategically
valuable opportunity to become the place
where developers and payment providers
connect and thrive, increasingly making
Bango the technology behind every
payment choice.
Bango won the award for the ‘Most
Innovative DCB Technology’ at the
Global Direct Carrier Billing Awards 2017.
Bango PLC | Annual Report 2019
3
Chair’s statement
The Bango virtuous circle
strategy
drives continued growth for Bango and
increasing value for Bango customers.
Bango is generating significant profit
from its payment business and investing
this profit into driving forward the data
monetization business. This is turn brings
more payment business and more data
monetization opportunities.
With data from more than £1Bn worth
of transactions across millions of users
and thousands of different apps, Bango
offers unique insights to its partners and
customers to drive growth both for them
and Bango.
developing
data
innovative
By
monetization
technology, Bango has
earned a unique and highly valuable
in mobile commerce. The
position
synergies between payment data and
marketing activity are compelling and
fueling increasing interest in Bango from
the market leaders.
during 2019. Audiens achieved its revenue
targets ahead of plan, providing a solid
foundation for its development as an
independent business within the Bango
Group as it expands outside Italy.
The core technology and operational
leverage that Bango has mastered is now
being further refined under the leadership
of Chief Executive Officer Paul Larbey.
Paul succeeded me as CEO in January
2020 following a successful 2019 as Chief
Operating Officer. As Executive Chair,
I am focused on developing strategic
partnerships with industry leaders. Bango
increasingly
and
opening up huge opportunities for these
partners. I am excited by the prospects for
2020 and beyond.
technology are
its
Finally, Bango thanks David Sear for his
valuable insights, industry connections,
advice and wisdom over the past 9
years in his role as Chair of the Board of
Directors.
The Audiens business, acquired
in
January 2018, made great progress
Ray Anderson
Executive Chair
Bango Marketplace
When it comes to marketing your app, finding
the people who pay in-app – the ones who
increase your revenues - can be like looking
for a needle in a haystack. But it doesn’t
have to be like that! Bango Audiences make
it easy to get your campaigns straight to
users who pay in apps.
Created by using payment information from
billions of dollars of in-app purchases, Bango
Audiences are filled with users from all over
the world who have paid in-app. Paying to
reach users who never pay is a waste of your
money. Much better to bring into focus those
who are most likely to spend and target your
campaigns on them. It’s a simple process:
Choose the audience you want from Bango
Marketplace and plug it straight into your
Facebook campaigns, with zero integration
required. Next? Wait for the cash to roll in.
4
Bango PLC | Annual Report 2019
Strategy for growth
The Bango growth strategy is to process and analyze payment data to produce unique insights that drive more consumer spending.
Payment data is collected through Bango payment processing activity and through partnerships with a range of payments businesses.
Bango technology derives payment behavior insights and turns these into marketing audiences that are used by app developers and
other online businesses.
The combination of payment processing with more effective marketing creates a virtuous circle. As increased marketing effectiveness
attracts more paying customers, so the amount of payments processed grows, which produces more payment data. This can then be
analyzed to produce further improvements in marketing effectiveness.
Growth drivers
Bango benefits from multiple factors that
drive growth. First, Bango works with
the world’s largest internet businesses,
including Google, Amazon and Microsoft
who activate more routes, in new markets
and offer new products and services
through Bango. Secondly, the
unique benefits of the Bango
circle attract new
virtuous
join the circle.
customers to
Bango data
insights enable
merchants to derive more revenue
from marketing activity. Finally,
Bango technology enables these
merchants to reach and acquire
more customers.
Process increasing
volumes of payments
commerce
Leading
online
the Bango
businesses use
Platform
their
customer payments on a global
scale. They use it to activate
new forms of payment such as
Direct Carrier Billing and mobile
wallets.
process
to
Bango processes hundreds of millions of
transactions a year, including payments
for physical and digital goods, and from
the resale of digital services. As Bango
partners expand their relationships into
new markets, and offer new products and
services, transaction volumes increase.
New merchants 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 builds the systems and
software that together form the Bango
Platform can be operated and evolved at
low cost.
a heritage of billing grade privacy and
security, the Bango Platform has the
architectural flexibility and systems in
place
to accommodate current and
future requirements. Developments such
as General Data Protection Regulation
(GDPR) and California Consumer Privacy
Act (CCPA) benefit Bango as
they standardize regulations and
build consumer confidence.
data
strategy
Audience sales
is
to
The Bango
collected
monetize
from payment providers, by
enabling app developers
to
use audiences created
from
this data to improve marketing
effectiveness.
Bango
Platform creates audiences from
payment transactions and other
data sources, and offers these
audiences to developers through
Bango Marketplace.
These
unique audiences, are proven to
increase the percentage of users
that make a paymeny after they
install an app.
The
Boost marketing effectiveness
The high volume of transactions the
Bango Platform processes every year
generates a vast pool of consumer
payments data. Bango systems collect
and organize this data securely and in
compliance with the latest consumer
data protection
standards. Payment
transactions generate valuable insights
that help developers to boost revenue
from their marketing activities.
is
A strategic challenge
to ensure
that the analysis of data, and the
preparation of insights and audiences
meets evolving data regulations. With
Bango expects that its strategy will attract
more customers to the Bango Platform.
Bango has developed
its platform
and processes to engage with a larger
number of customers, enabling significant
scale through Bango Marketplace. To do
this, Bango must continue to attract and
retain 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 THRIVE values to support
the personal and professional goals of
talented employees.
Bango PLC | Annual Report 2019
5
CEO’s statement
Payment platform growth
2019 was the fifth consecutive year in
which End User Spend (EUS) doubled,
growing to £1.1Bn. This growth was seen
across the global leaders integrated to
the Bango Platform, with a 70% increase
in the number of users paying with carrier
billing and across the new merchants,
routes and services
launched. EUS
remains the main KPI for Bango because
it measures both the payments processed
through the platform and the volume of
data available to monetize.
The continued growth in Over-The-Top
subscription streaming services has been
a key contributor to this success. In 2019
we connected merchants including Spotify
and YouTube TV to the Bango Platform
and saw services such as Disney+ launch
inside the Google Play store. These high-
value subscription services provide a
stable recurring revenue base.
In 2019 we also launched payments for
virtual services to complement payments
for physical and digital goods. Our
partnership with AETolls allows drivers
in the US to charge road tolls to their
phone bill. This provides Bango with an
opportunity to capture a share of the
$6Bn/year of untagged road tolls in the
US alone.
Bango’s ‘Suspend and Resume’ technology,
launched
in 2019, enables pre-paid
subscribers to earn additional benefits by
topping-up each month without the need
to re-register for a service if they miss a
top-up window. This opened the Bango
Resale solution for the 3Bn pre-paid
mobile subscriber market. Moving beyond
mobile, 2019 saw the integration of fixed,
cable and Pay TV operators to the Bango
Platform, further extending our reach and
market opportunity.
Data business growth
The growth in payments processed by the
Bango Platform provides an increasingly
rich source of data that app marketers
can use to better target their marketing.
This generates more payments processed
by the platform and the Bango virtuous
circle expands.
Bango Marketplace offers the payment
data from the Bango Platform in the form
of anonymized audiences, which are used
by app marketers on marketing platforms
such as Facebook and Google. This gives
the app marketer an improved return on
marketing investment while giving the
payment provider a new revenue stream.
successfully
raised
In 2019 Bango
of Bango Marketplace
awareness
within the app developer community.
By
leveraging partnerships such as
those announced with appScatter and
MobileAction, Bango developed a healthy
pipeline of app developers wanting to
benefit from Bango Marketplace. Bango
also signed agreements with two parties
to resell Bango Audiences to the marketing
toolkit they provide to their clients.
The richness of the data available in
Bango Marketplace grew significantly
in 2019. In partnership with payment
providers we added high value audiences
in markets such as the Middle East and
North America – popular regions with app
developers targeting in-app purchases.
We broadened our offering by bringing-
in non-Bango payment data to provide
Bango Audiences in new countries. South
Korean audiences became available in
partnership with NHN, who are looking to
Bango Marketplace to expand their data
monetization business outside of Korea.
By taking advantage of Bango Audiences
to optimize marketing campaigns, app
developers see a significant increase in
the conversion to paying users, by up
to nine times. This success has already
resulted in repeat orders.
Data
Customer
Audiens
Platform (CDP)
Audiens operates as a separate business,
developing and marketing its cloud-
based Customer Data Platform (CDP). In
2019 Audiens met its ambitious financial
targets early by building on its commercial
success in Italy, winning new customers
and leveraging Bango’s global presence
and expertise. New customers in 2019
included the Italian supermarket chain
Iper and the international multimedia
publishers RCS MediaGroup.
2019 saw a focus on simplicity for Audiens,
broadening market appeal. A self-serve
product was launched making it simpler
and quicker for customers to adopt, while
a new user interface created a more
intuitive experience for all users.
Audiens added integration with Shopify
so customers that have built their store
on Shopify can automatically push data
to Audiens and immediately benefit from
a CDP. Further data sources were added
in 2019, including the attribution network
Adjust. New partnerships with marketing
channels and tools, such as MailChimp
create opportunities for increased growth.
Outlook
The outlook for Bango continues to be one
of rapid revenue growth and increasing
importance to customers as the virtuous
circle strategy continues to deliver.
The payments business will continue to
grow exponentially in 2020, building on
6
Bango PLC | Annual Report 2019
the solid foundations laid in 2019 and
new opportunities for additional growth
including:
•
•
•
Additional Bango Boost technology
will be deployed in 2020 to help
merchants and payment providers
attract more customers and increase
the conversion and spend
in partnership with
Subscription bundling will expand
beyond the telco/service provider
the
space
world’s largest retailers. By joining
the Bango circle these retailers are
able to acquire new customers and
offer additional services quickly and
easily, leveraging Bango technology
and partnerships. This new market
dramatically increases the growth
opportunities for Bango.
Increasing 5G deployments in 2020
will deliver entirely new services to
customers over mobile networks.
The ultra-low latency, high speed 5G
connectivity is already driving online
game streaming companies
into
the Bango circle. The first is Hatch,
the monthly subscription based 5G
games streaming platform, which
launched carrier billing payment
services in the USA through Bango in
March 2020.
Bango
Audiens
increasingly away from the data resale
positioned
has
business due to the move by Google
and others to assert more control over
browser cookies. This move away from
cookies increases demand for a CDP as
companies look to better engage with
their customers using first party data. In
2020 Audiens will also broaden its market
presence by expanding relationships with
selected channel partners.
what people search for and Facebook
then target based on what people like;
Bango target based on what people
choose to pay for.
is
increasingly becoming
We are excited by the opportunity ahead.
Bango
the
technology behind every payment choice
as more partners join the Bango circle to
thrive.
Paul Larbey
Chief Executive Officer
for
is expected
further
to bring
2020
the Bango Marketplace
success
business, following strong feedback from
app developers in 2019 regarding its
capabilities. The proven sales engagement
model is starting to yield repeat sales,
and consequently the value of Bango
Audiences to app developers in helping
them achieve up to a nine-fold increase
in marketing efficiency. 2020 will also see
increased sales momentum driven by a
wider variety of data sources becoming
available in Bango Marketplace.
Bango Marketplace is already growing
quickly as it captures a share of the $60Bn/
year app marketing spend. The wider
opportunity, which can be addressed
using the same core technology is even
larger. The
two Bango Marketplace
resellers signed in 2019 are the first steps
in expanding beyond app developers,
opening much larger marketing spend in
new segments.
The vision for Bango Marketplace is clear;
just as Google targeted ads based on
Visit Bango Investor online:
bangoinvestor.com
Bango PLC | Annual Report 2019
7
CFO’s statement
Bango business model
Bango provides financial reporting of
two integrated and complementary lines
of business. The payments business
processes payments through the Bango
Platform for the world’s leading online
digital and physical merchants. The data
business comprises data monetization
revenue and revenue from the Audiens
CDP product.
End User Spend (EUS)
EUS is the total value of transactions
processed by
the Bango Platform
excluding taxes. It is the most significant
KPI
to
measure the growth of the business and
the continued success of Bango customers
and partners. More EUS means more
transactions and more payment data.
(Key Performance
Indicator)
In 2019 EUS increased to £1.1Bn from
£0.6Bn in 2018, 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 revenue
and profit in 2020 and beyond. Business
grew across all major partners including
Google Play, Amazon and Microsoft.
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 or connection.
Bango data revenue consists of fees
charged for making data useable by
merchants or other advertisers and a
recurring fee for using the Audiens CDP
as a service.
fees, such as
Bango earns other
integration fees, which are recognized on
completion of contracted milestones.
Total revenue increased by 41% to £9.31m
(2018 £6.62m).
Revenue generated
from payments
increased 36% to £7.16m from £5.25m
in 2018. Data Revenue increased 57% to
£2.15m (2018: £1.37m).
Cost of sales in 2019 was £1.41m. Of
this, £1.34m arises from fees charged by
data owners and by marketing channels
as costs of sales in the data business.
The cost of sales related to the Bango
Platform payment activity in 2019 was
£0.07m driven by increased SMS costs.
Cost
Bango group administrative costs of
£7.4m*, (FY 2018: £6.7m) were in line
with forecasts and included investment
in the Data Business. With the growth
in payments the Bango Platform has
been developed to process significantly
higher EUS, up
to $25Bn, with no
additional operational cost, highlighting
the operational leverage as the Bango
Platform continues to grow.
Bango group Adjusted** 2019 EBITDA was
positive £0.45m, (2018: - £0.87m) including
the adoption of IFRS 16 in 2019, the impact
being an uplift of £0.30m.(2018:nil)
The share-based payment charge for
2019 was £0.81m (2018: £1.04m) calculated
using the Black-Scholes model. It relates
to the Bango share option scheme 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 £1.7m (2018: £1.3m) as R&D
projects capitalized in prior years were
deployed. Depreciation
the year
totaled £0.48m (2018: £0.27m) reflecting
both fixed asset additions in the year and
the change to IFRS 16 Leases, adopted
retrospectively in the year but without
restating the prior year.
for
*Adjusted for exceptional items £0.165m
**Adjusted EBITDA is earnings before
interest, tax, depreciation, amortization,
share based payment charge and
exceptional items
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 €2.11m
in cash. Bango also issued 521,803 new
Bango shares to the vendors of Audiens
and 738,399 warrants over new Bango
shares, exercisable at a price of £1.80
each, which will lapse after 10 years.
On 15 January 2020 the remaining 1.55%
shares in Audiens were purchased for a
consideration of £0.99m (€1.16m) following
the exercise of a put option, the value
being based on the growth of the business
in the two years post acquisition.
Statement of financial position
Net assets at 31 December 2019 were
£14.7m (31 December 2018: £16.0m).
8
Bango PLC | Annual Report 2019
to £2.7m
Cash balances at 31 December 2019
decreased by £1.1m
(2018:
£3.8m), as a result of investment in the
new business streams and products. A
highly scalable operating platform and
growing EUS lead to increased cash that
was reinvested in the data business.
Intangible assets of £12.2m (2018: £11.9m)
include acquired goodwill as well as
internally developed capitalized R&D.
Intangible assets relating to capitalized
internal R&D
to £6.99m,
increased
following investment in the Bango Platform
and Bango Marketplace (2018: £5.78m).
Internally generated R&D is amortized
over 5 to 8 years with projects assessed in
relation to their individual cash generation
ability. Total borrowings at 31 December
2019 were £0.2m (2018: £0.3m) and consist
of Right of Use liabilities used to purchase
computer equipment and software but
excludes building leases.
Going concern
As Bango continues to grow its EUS and
revenue in 2019 in line with prior year
trends, cash consumption has reduced
due to the stable cost base of the platform.
With cash at the year end of £2.7m, the
Board believes there is sufficient cash
and resources to support both planned
investments to grow sales, and to develop
new products.
Carolyn Rand
Chief Financial Officer
Section 172 statement
Decisions of the Board take into account
not just short-term, but also medium-
and
long-term consequences, which
are carefully considered and balanced,
having regard to the sometimes conflicting
needs and priorities of the business, its
customers, partners, employees and other
stakeholders. For example, the decision to
invest cash generated from the payments
business into the data business is based
on the view that this strengthens customer
relationships, creates a new revenue stream
and boosts the value of the payment
business in the long-term.
The Directors’
report and Corporate
governance report set out in greater detail
Bango’s policy towards its employees.
Bango value is created through innovation,
which is a product of motivated employees.
They are of central important to Bango
success, and the directors believe that
the Bango culture and core values
create an environment for engaged and
successful employees. The Bango People
team supports managers to look after
employee needs, and the Directors review
independently conducted annual
an
employee engagement surveys, which
ensures that employee interests and needs
are at the kept at the forefront of the Board
agenda.
Bango success depends on strategic
relationships with key partners, customers
and suppliers, so the Board maintains
ongoing oversight of these. Monthly
management packs report to the Board
on the status of key relationships, which
have Board-level engagement
from
an operational perspective. Product
performance is constantly monitored, and
customer feedback continuously captured
through regular account meetings, which
are always attended by management-level,
and often director-level, representatives.
Bango seeks to make a positive contribution
to its community, at local and global levels,
and to minimize as far as possible its impact
on the environment. Bango backs its
employees’ interests in community activities,
supporting them in terms of time to attend to
these commitments and financial backing.
Further details on practical steps Bango has
taken can be found in the Directors’ report
and Corporate governance report. The
Board’s adoption and application of the
QCA Corporate Governance Code further
supports these principles, with more detail
of the steps Bango has taken set out in the
QCA website disclosures against Principles
3 and 9 to the Code, which can be found
on the Bango website at bangoinvestor.
com/aim-rule-26
Bango works with the global leaders of
the technology and telecoms industries.
Accordingly, the highest of standards of
business are demanded. Bango works
with these global leaders, at the forefront
of business, industry and technological
innovation, to ensure these standards are
constantly challenged and improved.
The competing needs of the various
stakeholders of the company are monitored
and reviewed at management and Board
level. Where conflicting needs arise, advice
is sought from the wider Board and, as
necessary, from Bango advisors. Through
the careful balancing of stakeholder needs,
Bango seeks to promote success for the
long-term benefit of shareholders.
Bango PLC | Annual Report 2019
9
Principal risks and uncertainties
risk management
Financial
objectives and policies
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
uncertainties with Bango’s
insurance
brokers during the insurance renewal
process.
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
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.
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
liquidity
Liquidity risk and going concern
Bango ensures sufficient
is
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 developments
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
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
reviews of 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 for trading purposes.
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
from major
partners. Recommendations are brought
to the attention of the Board, prioritized
and actioned.
requirements
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 monitoring,
minimization of 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
in
keeping pace with developments
internet, mobile and payment technology.
Bango manages this risk with a continued
investment in Research and Development
(R&D), combined with regular technology
reviews with
trading partners and
sector specialists to ensure that market
developments are understood and
Visit Bango Investor online: bangoinvestor.com
10
Bango PLC | Annual Report 2019
managed. Products are reviewed regularly
for signs of impairment, based on single
cash generating units and their ability to
grow revenues.
Platform risk
The Bango Platform processes huge
volumes of data, and is designed to
ensure it has capacity to process ever
growing volumes of EUS as well as short
term spikes of data. The availability and
stability of the platform is managed by
closely reviewing the performance of the
platform and stress testing the platform
to ensure that there is huge capacity to
scale.
Extreme dominance of the market by one
merchant or mobile operator could reduce
the value of Bango. Bango has secured
deals with leading stores and expects
diversity of customers and operators to
continue and increase over time. Even
the largest internet companies do not
monopolize the global commerce market.
EU related uncertainty
Bango
leadership carefully monitors
EU related activity. The benefits and
drawbacks of having exited the EU, have
been evaluated and are expected to be
manageable or insignificant.
Covid-19
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.
Bango commented on Covid-19 in the
RNS issued with the 2019 full year results
on 17 March. While there is uncertainty
about how long countries will be required
to deviate from “business as usual”
to combat the spread of the virus, no
negative impacts to the Bango business
have been identified so far. Prolonged
responses to Covid may cause partners
to reschedule some of their launches and
marketing programs. Equally there is the
potential for more consumer spending
online, and more targeted investment in
marketing. Information about how Bango
assesses the potential impact on its
business is published online through the
Bango blog, which will be updated from
time to time.
Gender of Directors
Bango has eight Directors, four identify as
male, two as female, one as no gender
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:
Paul Larbey
CEO
Key Performance Indicators (KPIs)
End User Spend (EUS)
This is the key metric to measure the
growth and success of Bango. It is the
transactions
total value of payment
through the Bango Platform. This metric
is not only a measure of the payments
being processed, it is also a measure of
the amount of potentially monetizable
payment data.
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 reinvesting the cash from
the payments business into the data
monetization business, 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 payment revenue is the sum of all
the fees charged across merchants and
payment providers for the processing
of carrier billing and resale/bundling
transactions. Bango receives a fee from
every transaction through the platform
which varies by market and volume of
transactions.
Bango data revenue is the sum of
revenues charged when Bango provides
data segments or customer data platform
(CDP) licences to merchants or other
advertisers. The transaction price for data
activity is clearly defined in contracts
and is based on the volume of data and
duration it is shared.
Non-financial KPIs
These are monitored monthly by the
Board and key management, and include
business forecasts from key partners,
sales pipelines for new route activations
& merchant onboarding, app developer
audience sales pipelines, and employee
engagement. All these indicators align
towards growing market share and EUS.
Net profit
This is 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
allowing investment in sales and marketing
data monetization
particularly
business. Management
the
review
platform costs to ensure they are stable
and closely review the investment in our
new technology development and sales.
for
Bango PLC | Annual Report 2019
11
Drivers of exponential growth
X
X
More
users
More
routes
More
merchants
• 70% growth in unique users paying via DCB in last 12 months
• New technology opens-up subscription bundling to 3Bn pre-paid
subscribers
More
users
• New Bango Boost technology to increase customer acquisition
and conversion through targeted audience marketing – launched
in 2020
• New routes launched globally from Morocco to Myanmar
• Fixed, wireline and PayTV providers joined mobile operators
inside the Bango circle
• Major retailer bundling complementary merchant subscriptions
launched in 2020
More
routes
12
Bango PLC | Annual Report 2019
X
=
More
merchants
More
insights
Sustained
payment data
growth
• Streaming services driving growth as major merchants including
Spotify and YouTube TV joined the Bango circle
• Added payment for virtual services with DCB for toll roads with
AE Tolls
More
merchants
• 5G stimulating increasing demand for streaming game service -
first launch with Hatch in USA
• Bango Boost identified over £100M additional EUS
• Bango Boost provided a 15% increase in subscription conversions
• Data insights enable merchants to maximize subscription renewal
with new functionality to be launched in 2020
More
insights
Bango PLC | Annual Report 2019
13
Directors
Paul Larbey - Chief Executive Officer
Paul leads the talented Bango team as they continue to innovate with industry leading
technology. With years of experience scaling up businesses, Paul has a passion and track
record in driving growth and transformational change which aligns to the creation of an
ecosystem where merchants and payment providers converge, grow and thrive.
Paul joined Bango following his role as CEO at Velocix, a global leader in streaming
technology. Paul grew Velocix from a small start-up to the world’s leading IP video
streaming specialist. As CEO, Paul led the Velocix team through its integration into Alcatel-
Lucent and then Nokia. In 2018, Paul orchestrated the spin out of the division from Nokia
to create a pure-play streaming technology company.
With over 20 years experience in the telecoms market, having held leadership positions in
Cray Communications, Lucent, Alcatel-Lucent and Nokia, Paul has a strong track record of
successfully bringing new technologies to market.
“
The opportunity to lead a high
growth company that combines
established and new business
opportunities is extremely exciting.
Couple this with a world-class team
and winning culture and you have
a very human company capable of
superhuman achievements.
“
“
Being part of a global company
where the goal is to grow our
customers businesses is a refreshing
change. Growing as our customers
and partners grow makes creating
value a common goal and that
makes Bango so much fun.
“
Carolyn Rand - Chief Financial Officer
Carolyn is responsible for overall financial management of Bango, for corporate financial
functions and 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 commercial 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 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.
Ray Anderson - Executive Chair
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.
“
With the unique combination of
payment processing and data
insights, Bango is in a unique
position to power some of the
world’s largest online companies.
The opportunity to develop these
partnerships and see them to
success is why I arrive each day
excited about what lies ahead.
“
“
Enabling the internet goliaths to
achieve things they can’t achieve
on their own is a great challenge
that demands constant innovation.
The agility of Bango coupled
with the momentum of these big
companies makes delivering new
solutions extremely exciting.
“
Anil Malhotra
Chief Marketing Officer
Anil is responsible for Bango’s global marketing activities and partnerships with merchants,
app stores 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.
14
Bango PLC | Annual Report 2019
Nancy Cruickshank - Non-Executive Director
Nancy is a serial technology entrepreneur and Non-Executive Director. She presently leads
a Digital Business Transformation programme at Carlsberg group, as a member of its
Executive team. Her last start-up, 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 Non-Executive Director. 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 Non-Executive Director at TelecityGroup (FTSE 250), one of Europe’s most successful
technology 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.
“
The potential of the Bango data
opportunity is simply huge. The
focus on app developers is a great
start but the market opportunity
beyond is incredibly exciting.
“
“
For a highly nimble company
Bango also has incredible scale.
This combination is rare and made
my decision to join the Board an
easy one. Having been here for
several years now I never fail to be
astonished by the speed at which
the team executes.
“
Gianluca D’Agostino - Non-Executive Director
Gianluca is an Angel investor and a pioneer in the mobile industry. He has more than 25
years’ experience of founding, growing and investing in international mobile content and
payment businesses. Gianluca has today a Non-Executive role on the OnMobile Global
Ltd and on Coolgames BV boards, and on several UK and Italian startup boards. As
Founder and CEO, he grew the Neomobile business organically and via M&A to become a
leading mobile monetization enabler across Europe and Latin America. 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.
Sir Eric Peacock - Senior Independant and Non-
Executive Director
Sir Eric Peacock joined Bango as Senior Independent and Non-Executive Director, to
guide and support the expected rapid growth of Bango as it builds on its global
relationships and capitalizes on its data monetization technology.
In addition to his experience in financial services and expertise in corporate governance,
Eric has served in several government bodies including UKTI (Board member), FCO
(Board), BIS (Directorate) and UKEF (Non-Executive and Member of the Audit Risk
Committees), bringing extensive regulatory insight to Bango as it expands its data
monetization business.
He is currently Chairman of Buckley Jewellery Ltd and Stevenage Packaging Ltd and is
also the Chairman of The Charity Big Cat Sanctuary which has the largest collection
of endangered species of big cats in Europe and focusses on conservation, education,
breeding and return to the wild.
“
Bango has a great team and
culture. I felt excited the moment
I walked through the door. The
opportunity to help this team grow
and expand globally made joining
Bango the easiest decision I have
ever made.
“
“
I have followed Bango’s journey
over many years from the outside
and was thrilled to join the team.
The growth and expansion plans
require constant innovation in all
areas of the business.
“
Frank Bury - Non-Executive Director
Frank Bury is managing partner at Bury Fitzwilliam-Lay & Partners LLP (BFLAP), a UK-
based venture capital partnership focused on early and development stage technology
investment. BFLAP has backed a number of successful UK tech companies that have gone
onto a listing including Bango plc, Financial Objects and Servicepower Technologies plc.
Frank is a Director of Domainex Ltd, Smartlogic Holdings LTD, and TSL Research Group
LTD. Prior to founding BFLAP in 2005, Frank spent 12 years in the City of London; first at
Cazenove & Co and then at Sloane Robinson Investment Management where he was a
partner. Frank has an MBA from IESE in Barcelona.
Bango PLC | Annual Report 2019
15
Company information
Company registration number
05386079
Registered office
5 Westbrook Centre
Cambridge
CB4 1YG
Directors
R Anderson - Executive Chair
Company Secretary
Bankers
Solicitors
Independent auditor
Nominated adviser and broker
Public relations advisor
US office
P Larbey – CEO
C Rand - CFO
A Malhotra - CMO
E Peacock – Non-Executive and Senior Independent Director
F Bury – Non-Executive Director
N Cruickshank – Non-Executive Director
G D’Agostino – Non-Executive Director
R Greenhalgh
HSBC Bank PLC
8 Canada Square
London
E14 5HQ
Mills & Reeve LLP
Botanic House
100 Hills Road
Cambridge
CB2 1PH
RSM UK Audit LLP
Chartered Accountants and Statutory Auditors
City House
126-130 Hills Road
Cambridge
CB2 1RE
finnCap Ltd
60 New Broad Street
London
EC2M 1JJ
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 2019
Directors’ report
The Directors present the Annual Report and audited financial
statements of Bango PLC for the year ended 31 December
2019. This report should be read alongside 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 2019
6,593,725
3,973,271
-
N/A
19,500
-
308,500
-
-
R Anderson
A Malhotra
C Rand
M Rigby ***
G D’Agostino
N Cruickshank
F Bury **
E Peacock**
D Sear*
Ordinary shares
of 20p each
31 Dec 2018
6,572,816
3,982,371
N/A
176,630
19,500
N/A
N/A
N/A
-
* Non-Executive Director David Sear resigned on 22 January
2020.
** Frank Bury and Eric Peacock were appointed as Non-
Executive Directors on 3 December 2019.
*** Non-Executive Director Martin Rigby resigned on 17 May
2019
Paul Larbey was appointed as an Executive Director on 22
January 2020. He holds 18,297 ordinary shares of 20p each in
Bango.
For Directors’ biographies and experiences see 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
01 October 2019
27 March 2019
21 September 2018
14 March 2018
22 September 2017
21 March 2017
21 September 2016
16 March 2016
18 September 2015
Total
C Rand
01 October 2019
27 March 2019
03 January 2019
Total
A Malhotra
01 October 2019
Option
price
£1.29
£0.93
£1.73
£1.73
£2.55
£1.145
£0.89
£0.43
£0.885
£1.29
£0.93
£0.90
2019
2018
50,000
50,000
50,000
50,000
50,000
50,000
50,000
50,000
32,500
432,500
50,000
50,000
100,000
200,000
-
-
50,000
50,000
50,000
50,000
50,000
50,000
32,500
332,500
N/A
N/A
N/A
N/A
£1.29
50,000
-
27 March 2019
21 September 2018
14 March 2018
22 September 2017
21 March 2017
21 September 2016
16 March 2016
18 September 2015
Total
£0.93
£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
50,000
32,500
432,500
-
50,000
50,000
50,000
50,000
50,000
50,000
32,500
332,500
Paul Larbey was appointed as an Executive Director on 22
January 2020. His interest in share options of Bango are as
follows:
Paul Larbey
18 September 2019
27 March 2019
Total
£1.375
£0.93
50,000
250,000
300,000
N/A
N/A
N/A
The share options were granted to Executive Directors under
the Bango employee share option scheme. All share options
are granted based on past and expected performance 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.
Frank Bury 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.
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 for not just direct
carrier billing but all other forms of alternative payments that
allow merchants to sell more goods to consumers. Bango has
increased its focus on R&D in 2019 taking the platform forward
with such enhancements as suspend/resume enabling pre-
paid on resale, subscription renewal optimization algorithms
all while improving resilience and increasing scalability. Further
development was undertaken on new products including the
Bango Marketplace, which was launched in December 2018
and details of the internal development work that has been
capitalized in the year is in Note 5.
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 follows the applicable employment laws in each
territory in which it operates. Bango is committed to fair
31 Dec
31 Dec
Dividends
The Directors have not recommended a dividend (31
December 2019: £nil).
Bango PLC | Annual Report 2019
17
Directors’ report
employment practices, prohibits all forms of discrimination
and strives 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. Bango maintains an exciting and
interesting working environment to fully engage staff. Bango
operates in a global business environment with rapidly
changing needs. The Bango values are Transparent, Happy,
Reliable, Innovative, Victorious and Expressive. (THRIVE
values). The Bango annual goals are aligned with the THRIVE
values and reviewed on a company wide basis at monthly all
hands meetings. Following the Bango THRIVE values serves
both employees’ and customers’ needs. Further detail on the
Bango THRIVE values and employee personal development
and welfare is set out within the Corporate Governance
Report on page 19-22.
Health and safety policies
Bango conducts 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 legal, 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 2019 Bango had cash reserves of £2.7m
(2018:£3.8m) and based on detailed cash flows provided to
the Board within the FY2020/21 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 FY2020 as it did in FY2019 as a result of expansion of
the existing Bango activity and new business opportunities
known about and included in the FY2020/21 forecasts. For
these reasons, the Directors continue to adopt the going
concern basis in preparing the financial statements.
The Directors prepare the Annual Report and the financial
statements
law and
in accordance with applicable
regulations.
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 IFRSs. Under company law the Directors
must not approve the financial statements unless they are
satisfied that they give a true and fair view of the state of
affairs of the Company and the Group and profit or loss of
the Group for that period. In preparing these financial
statements, the Directors are required to:
•
Select suitable accounting policies and apply them
consistently.
• Make judgements and accounting estimates that are
•
•
reasonable and prudent.
State whether applicable IFRSs have been followed.
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 the auditor is aware of that information
Substantial shareholdings
At 31 December 2019 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:
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.
Liontrust Asset Management
Odey Asset Management LLP
Herald Investment Management
Hargreaves Lansdown Asset Management
Cavendish Asset Management
%
Number
11,133,016 15.75%
8,684,300 12.29%
8,589,600 12.15%
7,339,504 10.38%
5.67%
4,005,683
Directors’ responsibility statement
The following statement, which should be read in conjunction
with the report of the auditor set out on page 28, is made to
distinguish for shareholders the respective responsibilities of
the Directors and of the auditor in relation to the financial
statements.
BY ORDER OF THE BOARD
Company Secretary
R Greenhalgh
18 Bango PLC | Annual Report 2019
Corporate governance report
The Board
The Bango 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 team, bringing experience and skills 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.
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
principles support the core aims of Bango - to deliver innovative,
reliable products in a dynamic, collaborative environment,
achieving sustainable growth for all stakeholders.
At least once every year, the Board formally reviews corporate
governance structures and practice, to ensure that Bango has
robust systems and procedures in place, underpinned by a strong
corporate culture and customer-focused ethos. Corporate
governance matters, policies and procedures are monitored on
an ongoing basis and updated as appropriate, to ensure best
practice and continued compliance. The Board is confident that
existing governance arrangements meet the interests of Bango
and its stakeholders.
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 Executive Chair, CEO,
CFO, CMO, a Senior Independent Director and three further
independent Non-Executive Directors. Details of the Board’s
experience and interests are shown below 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
interests are
that shareholders’ and wider stakeholders’
represented.
Ray Anderson has a very successful track record, demonstrating
strong entrepreneurial flair and technological vision. He has
extensive experience in technology and product innovation and
development, and strong product foresight. His passion for
Bango, its products and customers inspires partners, investors
and employees alike.
Paul Larbey brings over 20 years’ experience in the telecoms
market. He has a strong track record of successfully bringing new
technologies to market, scaling businesses and driving growth
and profitability. Paul has rapidly embraced the strategy and
culture of Bango and has already delivered operational
improvements and efficiencies, placing Bango in a strong
position to deliver upon its expectations for future growth.
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.
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
drive the strength of Bango messaging to both partners and
investors. Anil is highly skilled at, and plays a central role in, both
product and market strategy and success.
Sir Eric Peacock brings a wealth of experience across both
executive and non-executive roles across a range of sectors and
industries. He has a strong record of success with several market-
leading businesses and an extensive network. His listed company
experience, considered and balanced approach, and passion for
employee engagement and delivering shareholder value equip
him strongly for his role as Senior Independent Director.
Nancy Cruickshank joined the Board in January 2019. She built
her career in start-ups, growth and world class businesses. Her
considerable experience in data and online business models, and
experience of doing business in different markets brings valuable
insight to Bango. Her significant successes in technology
ventures, her M&A and listed company experience, bolster the
strength and depth of the Board’s expertise in these important
fields.
Frank Bury has significant experience in finance, investing in and
managing technology businesses. This investment experience, in
both publicly quoted companies and entrepreneurial ventures,
and solid grasp of corporate governance issues, are of particular
value of the Board. Frank also brings considerable global
experience, especially in key Asian markets including Japan and
Korea.
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.
Two Directors identify as female, two as non-binary, and four as
male. In addition, the Company Secretary identifies as female.
All four Non-Executive Directors are deemed to be independent.
All Directors are subject to election by the shareholders at the
first Annual General Meeting following their appointment, and to
re-election thereafter every three years. After nine years the Non-
Executive Directors are subject to re-election on an annual basis.
Board members are required to devote as much time as is
necessary for the proper performance of their duties. Executive
Bango PLC | Annual Report 2019 19
Corporate governance report
(NED) commitments
Directors are required to work full time. Non-Executive Directors
are contracted to commit to 11 or more days a year but all spend
20-30 days working for, and representing, Bango. Non-Executive
Director
include attendance at and
preparation for Board and Committee meetings, oversight and
implementation of governance and Committee matters,
meetings and communications with shareholders, contributing to
and attending strategy days, meetings with Bango managers
and employees, as well as other key stakeholders and partners,
and overseeing, and as required, involvement in, strategic
matters.
Role of the Chair and Chair Division of Responsibilities
On 22 January 2020, Ray Anderson succeeded David Sear as
Chair of the Board. In line with corporate governance best
practice, David Sear resigned as Chair and as a Director of
Bango after a tenure of nine years.
Ray Anderson transferred his CEO responsibilities to Paul Larbey,
but maintains an executive role in business strategy focusing on
key strategic partnerships and developing the emerging data
business. Therefore, in line with the QCA Code, before making
this change, the Board sought the opinion of its key shareholders
on board composition and succession planning.
The Board also took advice from the Company Secretary, its
NOMAD and lawyers. Options for Board changes and
composition were discussed. Positive feedback was received
around the concept of having an Executive Chair, with some
shareholders
their preferred
raising
alternative. It was also agreed by both shareholders and the
Board that, if an Executive Chair were to be implemented, strict
policies and procedures would be established and monitored to
ensure continued strong and effective corporate governance
and an independent Board.
themselves
this as
To ensure the requirements for independence in the QCA Code,
the Board implemented changes to strengthen Non-Executive
governance. Nancy Cruickshank was appointed as a Non-
Executive Director in January 2019, and Eric Peacock and Frank
Bury joined the Board in December 2019. These new Directors
bring skills and experience from a range of sectors and industries,
and, crucially, all have strong corporate governance knowledge
and expertise from the public sector. All Non-Executive Directors
are independent.
The Board resolved that if it were to appoint an Executive
Director as Chair, it must implement changes to its governance
structure:
•
•
•
Formal recognition of the Board position of Senior
Independent Director, its role and responsibilities, within the
Articles of Association of Bango.
The appointment of one of the Non-Executive Directors as
Senior Independent Director.
Implementation of a clear delineation of roles and
responsibilities as between CEO and Executive Chair.
Working with the Company Secretary, the Board resolved to
implement the following:
•
•
amend the Articles of Association at the company’s
forthcoming AGM as follows:
To formally recognize the Board position of Senior
Independent Director, its role and responsibilities.
•
• Where a Chair or Deputy Chair also holds an executive
office, the Senior Independent Director shall be responsible
for overseeing corporate governance matters, including
matters relating to nominations and conflicts of interest.
Accordingly, in such circumstances, the Senior Independent
Director is responsible for monitoring and overseeing board
performance. In addition, the casting vote of the Chair is
removed.
To appoint Eric Peacock as Senior Independent Director.
Eric has a wealth of experience in fast-growth businesses
and broad experience in a range of CEO, Chair and Non-
Executive Director roles in both public and private
companies. As such he was considered by the Board to be
perfectly suited to take on this vital role. Eric was appointed
Senior Independent Director when he was appointed to the
Board in January.
To
roles and
responsibilities between Executive Chair and Senior
Independent Director at board level, and between CEO
and Executive Chair at a management level.
implement a clear delineation of
•
The Board adopted and implemented a policy whereby Board
roles and responsibilities are strictly divided as follows:
Executive Chair
•
• Oversees Board direction and effectiveness and Board
Leads the Board and chairs Board meetings
agenda
• Oversees the Bango vision, strategy and financial issues
• Contributes towards annual review on the performance of
the CEO which is undertaken by the Senior Independent
Director, (with additional input from all other Non-Executive
Directors)
Ensures information flow between management and Non-
Executive Directors
•
Senior Independent Director
• Oversees Board performance
• Chairs the Nominations Committee
• Oversees the performance and evaluation of the Chair,
•
and the search for a new Chair if required
Responsible for the quality of and approach to corporate
governance, in place of the Chair
• Oversees the adoption, delivery and communication of the
company’s corporate governance model, in place of the
Chair
Sounding board and intermediary for the Chair and other
Board members
•
From an operational standpoint, the role and responsibilities of
the Executive Chair and CEO are clearly defined. In his
management role, Ray Anderson is responsible for growing the
data monetization activities of Bango Marketplace and the
Audiens business. Ray is also responsible for driving key projects,
as determined by the CEO or the Board, such as the
development of strategic partnerships. As CEO, Paul Larbey is
responsible for the delivery of the business model, alongside
other Executive Directors, within the strategy set by the Board.
He is responsible for the day to day operations of the business
and oversees the performance of CFO and CMO, and in an
20 Bango PLC | Annual Report 2019
Corporate governance report
operational and management capacity only, the Executive Chair.
The CEO reports to the Board and the Senior Independent
Director, and not the Chair.
Further safeguards have been implemented within the policy, so
that the Company Secretary reports directly to the Senior
to Corporate
Independent Director on matters
Governance.
relating
In relation to operational performance, risks and similar issues,
the Executive Directors, including (and especially) the Chair,
report to the Senior Independent Director and Non-Executive
Directors. This ensures that the business remains aligned with
the strategy, and avoids the risk of conflict and a lack of
independent oversight on the basis the Chair is a founder, a
major shareholder and an Executive Director.
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
contains detailed financial information as well as extensive
information on the KPIs for Bango. The Non-Executive Directors
attend all Board meetings. Attendance at Board, Audit (Audit
Co), Remuneration (Rem Co) and Nominations (Nom Co)
meetings for 2019 was as follows:
David Sear**
(Chair)
Ray Anderson
Carolyn Rand***
Anil Malhotra
Martin
Rigby*****
Gianluca
D’Agostino
Nancy
Cruickshank***
Eric Peacock ****
Frank Bury ****
Board Audit Co Rem Co Nom Co
14 (15)
1 (2)*
15 (15)
15 (15)
13 (15)
6 (7)
1(2)*
2 (2)*
1 (2)*
2 (2)
4 (4)
3 (3)*
3 (3)*
3 (3)*
3 (3)
12 (15)
2 (2)
4 (4)
-
-
-
4 (4)
-
-
13 (15)
4 (4)
4 (4)
4 (4)
1 (1)
1 (1)
-
-
-
-
-
-
(x) Number of meetings held
* By invitation of the committee
** resigned January 2020
*** appointed January 2019
**** appointed December 2019
***** resigned May 2019
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, CMO and, in his
the Executive Chair. The CEO's
management capacity,
effectiveness is monitored by the Board and ultimately the Senior
Independent Director, and not the Chair, given the position of
Chair is held by an Executive Director. The contribution and
performance of all Executive Directors is monitored and overseen
by the Senior Independent Director and other Non-Executive
Directors.
remuneration
to align
Executive
incorporates performance-related
those of Bango
elements
interests with
shareholders. These performance-related elements are set as a
significant proportion of total remuneration, to incentivize, and
to reward success.
their
Non-Executive Director performance is overseen by the Senior
Independent Director in consultation with the Executive Directors.
The Chair’s performance is reviewed by the 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. 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 the
second half of 2019 the composition and performance of the
Board was formally reviewed, and the “skills matrix” that
highlights the contributions of current Board members, and areas
where the Board might benefit from additional support, was
reviewed and approved. This formal review also identified the
need for a Nominations Committee, which has been formally
established by the Board. Further detail on the role and
responsibilities of the Nominations Committee is set out below.
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 2019, 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 2019, the data privacy matters in relation
to the Marketplace product and considerations, uncertainties
and risks surrounding Brexit. The Company Secretary ensures the
Board and its sub-committees meet regularly and oversees and
monitors agenda items. The CFO keeps the Board updated on
accounting, finance and taxation changes and practices.
In addition to the advisors listed on page 16, one further external
advisor was appointed by the Remuneration Committee during
2019. As a part of its review of Executive Remuneration and
remuneration policy, the Remuneration Committee appointed FIT
Remuneration Consultants LLP to undertake a review of, and to
benchmark, Executive Director remuneration. Further details of
this are set out on page 25 in the Remuneration Committee
report.
During 2019 Bango changed its Nominated Advisor (“NOMAD”).
Cenkos Securities PLC acted as Bango’s NOMAD before finnCap
were appointed in July 2019. Other than FIT and Cenkos, no other
Bango PLC | Annual Report 2019 21
Corporate governance report
external advisors were appointed by either the Board or any of
its sub-committees during 2019. 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.
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 has sub committees to focus on
specific areas of good corporate governance. Separate
Remuneration, Audit and Nominations Committees hold regular
meetings and are each chaired by a different Non-Executive
Director, with the Senior Independent Director in attendance. The
members of these committees are assessed and considered to
have the appropriate knowledge and skills to complete their
tasks. They may seek advice and guidance from external parties
as required.
Corporate culture
Bango has a strong corporate culture which is consistent with its
objectives, strategy and business model. The Bango THRIVE
values set out the core values that Bango aspires to, these are:
Compliance with Bango policies and the THRIVE values is
actively monitored by senior management and implementation
is overseen by the Board. Management reports are scrutinized
at the monthly Board meetings. In addition, key management
personnel are invited to present to board meetings on specific
areas of focus, 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 THRIVE values, as well as through
employee benefits. Bango encourages diversity amongst its
workforce, and actively enforces its equal opportunities, anti-
bullying and harassment policies. Employee engagement
surveys, which cover all aspects of the business, are conducted
annually by an external human resources specialist, and their
results
for
improvement or concerns are raised, these are followed up by
management who are accountable
for
implementation.
the Board. Where suggestions
the Board
reported
to
to
All these measures assist in minimizing risk and uncertainty.
Further detail on corporate culture may be found in the AIM Rule
26 section of
located at
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 THRIVE values. 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 (and, as appropriate the wider company) 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
evaluation, governance
structures and processes and
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.
Ray Anderson, Executive Chair;
Eric Peacock, Senior Independent Director
22 Bango PLC | Annual Report 2019
Audit committee report
The Audit Committee comprises the Senior Independent Director,
Eric Peacock, and two other Non-Executive Directors, Frank Bury
and Gianluca D’Agostino. The Audit Committee has considerable
strength and depth in management and financial experience
across a broad range of industries and sectors, from both the
private and public sector, and is chaired by Frank Bury, who has
over 25 years’ of experience in finance.
Responsibilities
The Audit Committee meets at least twice a year to review the
independent audit report and the wider responsibilities set out
below:
• Monitor and challenge the integrity of the financial systems
and statements of Bango.
• Oversee Bango’s corporate reporting, internal controls and
risk management systems.
• Assess and report to the Board on performance, 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
the
their approval
appointment of the external auditor and to approve the
remuneration and terms of reference of the external
auditor.
relation
for
to
in
• Discussion of the nature, extent and timing of the external
auditor’s procedures and discussion of the external
auditor’s findings.
Review and monitor the external auditor’s independence
and objectivity and the effectiveness of the audit process.
• Develop and implement policy on the engagement of the
•
external auditor to supply non-audit services.
The audit was put out to tender in 2019 after Bango shareholders
voted against the continued appointment of Grant Thornton at
the 2019 AGM. Following a comprehensive tender process, the
Board determined that RSM UK Audit LLP was the strongest
candidate and appointed them as auditors.
Internal control procedures
The Board is responsible for Bango’s system of internal controls
and risk management, and for reviewing the appropriateness
and effectiveness of these systems having regard to the nature
and complexity of Bango, its business, and the risks it faces.
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:
• A clearly defined organizational structure with appropriate
•
•
•
delegation of authority.
The approval by the Board of a one-year budget, including
financial
income statements, statements of
monthly
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 in
accordance with 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.
•
• 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.
Frank Bury
Audit Committee Chair
Bango PLC | Annual Report 2019 23
Nominations committee report
During its review of Board composition and succession planning
in 2019, the Board decided to form a separate Nominations
Committee.
candidates was endorsed by the Board, and they were formally
appointed as Directors at the end of 2019.
The Nominations Committee proposed the changes to the Board
that were formalized post-period in January 2020, with Paul
Larbey becoming CEO and officially appointed to the Board,
and Ray Anderson becoming Executive Chair to succeed David
Sear.
The Senior Independent Director’s role as Chair of the
Nominations Committee is crucial given the Executive role
undertaken by the Chair. The Senior Independent Director
oversees the performance and evaluation of the Chair, ensuring
the independence and integrity of the wider Board. Further
detail on the division of roles and responsibilities as between the
Chair and Senior Independent Director and the measures taken
to ensure the integrity and independence of the Board may be
found within the Corporate Governance report on pages 19-21.
Eric Peacock
Nominations Committee Chair and
Senior Independent Director
Composition
The Nominations Committee is composed of two Non-Executive
Directors, Eric Peacock and Nancy Cruickshank, and one
Executive Director, Anil Malhotra (CMO). Eric Peacock, Senior
Independent Director, joined the Committee (which previously
comprised the remaining two Directors) as Chair when he was
appointed as a Director in December 2019. The Committee is
supported by the Company Secretary.
It meets at least twice a year, and more often if needed to
consider changes to the composition of the Board.
Responsibilities
The Committee’s main role and responsibilities are as follows:
•
•
•
•
•
•
To review the make-up and skill set of the Board
To make recommendations to the Board on board
composition
To oversee and monitor board performance
To identify any areas of Board operation that need
additional support or strengthening
To manage appointments to the Board as needed
To ensure that succession planning is discussed and
developed
2019 Activities
During 2019 the Nominations Committee considered the future
roles of the Board and worked with the Bango People team
(which has responsibility for HR) on the development of key
executives.
With the retirements of Martin Rigby and David Sear expected
to take place during 2019, the Nominations Committee (as Nancy
Cruickshank and Anil Malhotra) undertook an extensive review
of board requirements for the future, with additional input from
the wider Board and Company Secretary as appropriate. The
Committee identified a need for at least two further Non-
Executive Directors and a replacement Chair in place of David
Sear. The Committee’s search focused on two key areas where
additional skills and experience were required to bolster and
supplement those of the continuing Board members:
•
•
Finance and corporate governance knowledge and
expertise.
Knowledge of and experience
opportunities and product offerings.
in Bango market
The Committee is pleased to report the appointments made
during 2019. Nancy Cruickshank joined the board as a Non-
Executive Director at the start of 2019. At the same time, Carolyn
Rand, Chief Financial Officer, joined the board as a Director.
After a number of interviews, the Nominations Committee
identified and recommended Eric Peacock and Frank Bury as
outstanding potential board members, who would contribute
significantly to the next stages of growth for Bango as Non-
two
Executive Directors. The
recommendation of
these
24 Bango PLC | Annual Report 2019
Renumeration committee report
Composition
The Remuneration Committee comprises of three Non-Executive
Directors – Eric Peacock (Senior Independent Director), Frank
Bury and Nancy Cruickshank, who acts as Chair. 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,
remuneration policy, and 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.
During 2019, the Committee undertook a review of remuneration
policy and appointed FIT Remuneration Consultants LLP (“FIT”)
to review and benchmark the Executive Directors’ salaries and
benefits. FIT benchmarked against a pan-sector group of 60 AIM
listed companies with a comparable market capitalization.
Market capitalization was considered to be the best benchmark,
reflecting a holistic valuation based on the market’s view of
future prospects, as well as current trading.
The Committee’s terms of reference are reviewed and approved
by the Board. These are available for inspection at Bango’s
registered office.
incentives and reward
Remuneration policy
Bango’s policy on remuneration is to provide a package of
benefits to all employees, including salary, pension and share
options, which provide
individual
contributions to Bango’s overall performance appropriately,
while avoiding paying more than is necessary for this purpose.
The Committee considers Executive remuneration packages of
comparable companies when making recommendations to the
Board. Bango offers a base salary, performance related
bonuses, as well as share options and a workplace pension to
Executive Directors.
Annual salary
The FIT benchmarking exercise concluded that the fixed element
of remuneration for both the CEO and the CMO ranked in the
lower quartile, even taking into account their individual
shareholdings. Fixed remuneration of the CFO was found to be
competitive with the median position. Mindful of the importance
of retaining high-quality executives through packages which are
fair and attractive, but not excessive, and after careful
consideration of FIT’s findings as well as each individual director’s
performance and contribution to the business, the Remuneration
Committee decided to adjust the salaries of the CMO and the
then-CEO, Ray Anderson, in July 2019 so that both received fixed
remuneration that benchmark within the market median. The
fixed remuneration element of the CFO’s salary was left
unchanged.
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 set by the Remuneration Committee,
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, revenue and profitability) 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.
FIT’s review of the performance-related elements remuneration
confirmed that the policy applied is appropriate and bonuses
paid to Executive Directors are in line with market median levels.
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.
Alongside all employees, Executive Directors are eligible to
participate in the scheme on completion of an agreed
probationary period. The number of options awarded to all staff,
including Executive Directors, is directly related to their
contribution to Bango and its future growth.
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.
Options only deliver value if the share price rises and do not fully
vest for three years, thereby incentivizing all employees, as well
as Directors, in Bango’s medium to long-term growth, aligning
their interests with those of shareholders.
Bango PLC | Annual Report 2018 25
Renumeration committee report
Further details of the option plan and outstanding options as at
31 December 2019 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 the pension contribution is 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
on three months’ notice in writing by Bango.
Nancy Cruickshank
Renumeration Committee Chair
26 Bango PLC | Annual Report 2019
Renumeration committee report
Directors’ emoluments
Details of remuneration in respect of the Directors is as follows:
31 December 2019
R Anderson
A Malhotra
C Rand
M Rigby*
G D’Agostino
D Sear
N Cruickshank
Wages and
salaries
£
198,919
162,619
144,379
8,625
22,500
62,000
22,500
Variable pay
£
50,000
50,000
-
-
-
-
-
Pension and
other benefits
£
8,317
7,525
46,870
-
-
-
-
Total
£
257,236
220,144
191,249
8,625
22,500
62,000
22,500
621,542
100,000
62,712
784,254
* Non-Executive Director Martin Rigby resigned on 17 May 2019.
During the year Bango was invoiced £18,700 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 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
62,000
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
62,000
541,603
105,600
13,515
660,718
**R Elias Jones Resigned November 2018
Nancy Cruickshank
Renumeration Committee Chair
Bango PLC | Annual Report 2019 27
Independent auditor’s report to the members of Bango PLC
Opinion
We have audited the financial statements of Bango plc (the ‘parent company’) and its subsidiaries (the ‘group’) for the year ended
31 December 2019 which comprise consolidated and company statements of financial position, consolidated statement of
comprehensive income, consolidated and company cash flow statements, consolidated and company statements of changes in
equity and notes to the financial statements, including a summary of significant accounting policies. The financial reporting framework
that has been applied in their preparation 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 2019 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 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 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 SME 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 authorized for issue.
Key audit matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the group and parent
company financial statements of the current period and include the most significant assessed risks of material misstatement (whether
or not due to fraud) we identified, including those which 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 group and parent company financial statements as a whole, and in forming our opinion thereon, and we do not provide a
separate opinion on these matters.
Group key audit matters
•
Revenue recognition – Under international auditing standards there is a rebuttable presumed risk of fraud that
revenue may be misstated due to improper revenue recognition. We considered the controls over the determination of end user
spend and the corresponding billing of revenue. In addition, we performed cut-off testing and substantive testing procedures
to validate the recognition of revenue throughout the year. We also considered the adequacy of the Group’s revenue
recognition accounting policy as disclosed in note 3. Was in line with contractual arrangements.
Development costs - We focused on the capitalization of development costs due to its impact on reported earnings and the
judgements involved in assessing whether the IAS 38 criteria for capitalization have been suitably met with no impairment
required. We understood management’s basis for capitalizing development costs and reviewed whether the costs had been
appropriately capitalized in accordance with IAS 38 and in accordance with the accounting policy in note 3. Our procedures
included an assessment over the appropriateness of any management judgements including the future expected economic
benefit of capitalized projects and substantive testing of the costs capitalized. We also assessed the reasonableness of the
28 Bango PLC | Annual Report 2019
Independent auditor’s report to the members of Bango PLC
amortization policies in place and potential impairment. We also considered the adequacy of the Group’s research and
development accounting policy as disclosed in note 3. Capitalized development costs are disclosed in note 5.
Parent company key audit matters
•
Impairment – We critically assessed the impairment review performed by management over the carrying value of investments
and group debtor balances as this assessment incorporates a significant level of management judgement. Our work included
a review of the client’s latest board approved forecasts and discounted cashflow calculations to assess whether the assumptions
appeared reasonable and achievable. We also evaluated the key assumptions to ascertain the extent of change in those
assumptions that individually or collectively would be required to lead to an impairment.
Our application of materiality
When establishing our overall audit strategy, we set certain thresholds which help us to determine the nature, timing and extent of
our audit procedures. When evaluating whether the effects of misstatements, both individually and on the financial statements as a
whole, could reasonably influence the economic decisions of the users we take into account the qualitative nature and the size of
the misstatements. During planning materiality for the group financial statements as a whole was calculated as £200,000, which was
not significantly changed during the course of our audit. Materiality for the parent company financial statements as a whole was
calculated as £80,000, which was not significantly changed during the course of our audit. We agreed with the Audit Committee
that we would report to them all unadjusted differences in excess of £10,000, as well as differences below that threshold that, in our
view, warranted reporting on qualitative grounds.
An overview of the scope of our audit
Our group audit approach focused on the parent company, the trading subsidiaries and the consolidation which have been subject
to a full scope audit to group materiality. These audits covered 100% of group revenue, 83% of group loss before taxation and 99 %
of group’s total assets. In addition, we have performed analytical procedures on the overseas subsidiaries corroborating any
significant differences from expectations.
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.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of the audit:
•
•
the information given in the Strategic Report and the Directors’ Report for the financial year for which the financial statements
are prepared is consistent with the financial statements; and
the Strategic Report and the Directors’ Report have been prepared in accordance with applicable legal requirements.
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the group and the parent company and their environment obtained in the course
of the audit, we have not identified material misstatements in the Strategic Report or the Directors’ Report.
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
•
•
Bango PLC | Annual Report 2018 29
Independent auditor’s report to the members of Bango PLC
• we have not received all the information and explanations we require for our audit.
Responsibilities of Directors
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: http://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s report.
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.
Neil Stephenson (Senior Statutory Auditor)
For and on behalf of RSM UK Audit LLP, Statutory Auditor
Chartered Accountants
Second Floor, North Wing East, 126-130 Hills Road, Cambridge CB2 1RE
16 March 2020
30 Bango PLC | Annual Report 2019
Consolidated statement of financial position
Note
31 Dec 2019
£
‘000
31 Dec 2018
£
‘000
ASSETS
Non-current assets
Property, plant and equipment
Intangible assets
Right of use assets
Current assets
Trade and other receivables
Research and development tax credits
Cash and cash equivalents
Total assets
5
5
5
6
6
EQUITY
Capital and reserves attributable to equity holders of the parent company
Share capital
7
Share premium account
Merger reserve
Share based payment reserve
Foreign exchange reserve
Accumulated losses
283
12,201
931
13,415
2,588
597
2,687
5,872
19,287
14,137
36,057
2,175
4,526
77
(42,275)
568
11,928
-
12,496
2,815
635
3,815
7,265
19,761
14,054
35,797
2,175
3,881
162
(40,100)
Total equity
14,697
15,969
LIABILITIES
Current liabilities
Trade and other payables
Lease liabilities
Non-current liabilities
Lease liabilities
Deferred tax liability
Total liabilities
Total equity and liabilities
8
5
5
15
3,421
303
3,724
748
118
866
4,590
19,287
3,409
122
3,531
152
109
261
3,792
19,761
These financial statements were approved by the Directors on 16 March 2020 and are signed on their behalf by:
P Larbey C Rand
Director Director
Company registration number 05386079
The notes on pages 35 to 62 are an integral part of these consolidated financial statements.
Bango PLC | Annual Report 2019 31
Consolidated statement of comprehensive income
For the year ended 31 December 2019
Alternative performance measure (Non-IFRS)
End User Spend
Revenue
Cost of sales
Gross profit
Other administrative expenses
Exceptional items
Share based payments
Depreciation
Amortization
Total administrative expenses
Operating loss
Interest payable
Movement in put and call option
Investment income
Loss before taxation
Income tax
Loss for the financial year
Other comprehensive Income
Foreign exchange on consolidation
Loss and total comprehensive loss for the financial year
Note
2019
£ ‘000
2018
£ ‘000
4
4
10
11
5
5
14
11
14
11
15
1,093,440
558,173
9,310
(1,413)
7,897
(7,448)
(165)
(806)
(476)
(1,723)
(10,618)
6,620
(796)
5,824
(6,691)
-
(1,035)
(270)
(1,345)
(9,341)
(2,721)
(3,517)
(58)
(309)
12
(68)
-
15
(3,076)
(3,570)
740
706
(2,336)
(2,864)
(85)
84
(2,421)
(2,780)
Loss per share attributable to the equity holders of the parent
Basic loss per share
Diluted loss per share
16
16
(3.32) p
(4.11) p
(3.32) p
(4.11) p
All of the activities of the Group are classified as continuing.
The notes on pages 35 to 62 are an integral part of these consolidated financial statements
32 Bango PLC | Annual Report 2019
Consolidated cash flow statement
Net cash generated from operating activities
Cash flows used by investing activities
Purchases of property, plant and equipment
Addition to intangible assets
Purchase of subsidiary
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 generated from financing activities
Net decrease in cash and cash equivalents
Cash and cash equivalents at beginning of year
Exchange differences on cash and cash equivalents
Note
17
2019
£ ‘000
2018
£ ‘000
1,034
(1,591)
(148)
(2,088)
-
12
(182)
(2,573)
(1,786)
15
(2,224)
(4,526)
344
-
(26)
(240)
5,546
(333)
(68)
(102)
78
5,043
(1,112)
(1,074)
3,815
(16)
4,847
42
Cash and cash equivalents at end of year
2,687
3,815
The notes on pages 35 to 62 are an integral part of these consolidated financial statements.
Bango PLC | Annual Report 2019 33
Consolidated statement of changes in equity
Share capital
Share premium
account
Merger reserve
£ ‘000
13,285
-
-
-
107
662
-
769
-
-
-
£ ‘000
31,248
-
-
-
419
4,463
(333)
4,549
-
-
-
£ ‘000
1,236
-
-
-
-
939
-
939
-
-
-
Share-based
payment
reserve
£ ‘000
Foreign
exchange
reserve
£ ‘000
Retained
earnings
Total
£ ‘000
£ ‘000
2,351
1,035
(238)
733
-
-
-
1,530
-
-
-
78
(37,474)
10,724
-
-
-
-
-
-
-
-
84
84
-
238
-
-
-
-
1,035
-
733
526
6,064
(333)
238
8,025
(2,864)
-
(2,864)
84
(2,864)
(2,780)
14,054
35,797
2,175
3,881
162
(40,100)
15,969
Share capital
Share premium
account
Merger reserve
£ ‘000
14,054
£ ‘000
35,797
-
-
83
83
-
-
-
-
-
260
260
-
-
-
£ ‘000
2,175
-
-
-
2,175
-
-
-
Share-based
payment
reserve
£ ‘000
Foreign
exchange
reserve
£ ‘000
Retained
earnings
Total
£ ‘000
£ ‘000
3,881
162
(40,100)
15,969
806
(161)
-
645
-
-
-
-
-
-
-
-
(85)
(85)
-
161
-
161
806
-
343
1,149
(2,336)
-
(2,336)
(85)
(2,336)
(2,421)
14,137
36,057
2,175
4,526
77
(42,275)
14,697
Balance at 1 January
2018
Share based
payments
Transfer for exercised
options
Issue of warrants
Exercise of share
options
Issue of new shares
Expense of share
issue
Transactions with
owners
Loss for the year
Foreign exchange on
consolidation
Total comprehensive
income for the year
Balance at 31
December 18
Balance at 1 January
2019
Share based
payments
Transfer for exercised
options
Exercise of share
options
Transactions with
owners
Loss for the year
Foreign exchange on
consolidation
Total comprehensive
income for the year
Balance at 31
December 19
The notes on pages 35 to 62 are an integral part of these consolidated financial statements.
34 Bango PLC | Annual Report 2019
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 and a targeted audience.
The financial statements for the year ended 31 December 2019
(including the comparatives for the year ended 31 December
2018) were approved by the Board of Directors on 16 March
2020.
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 2019, in accordance with International
Financial Reporting Standards (“IFRS”) as adopted by 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.
These financial statements are presented in pounds sterling
(GBP) because that is the presentation currency of Bango
PLC.
Changes in accounting policy
The Group has adopted IFRS 16 “Leases” in these financial
statements retrospectively from 1 January 2019, but has not
restated comparatives for the prior year ended 31 December
2018 as permitted under the specific transition provisions in
the standard. The Group has reviewed the requirements of
IFRS 16 and presented the financial information in these
financial statements. Refer to note 5 Leases.
On adoption of IFRS 16, the group recognized lease liabilities
in relation to leases which had previously been classified as
‘operating leases’ under the principles of IAS 17 Leases. These
liabilities were measured at the present value of the remaining
unavoidable lease payments, discounted using the lessee’s
incremental borrowing rate as of 1 January 2019. The weighted
average lessee’s incremental borrowing rate applied to the
lease liabilities on 1 January 2019 was 3.25%
For leases previously classified as finance leases the entity
recognized the carrying amount of the lease asset and lease
liability immediately before transition as the carrying amount
of the right of use asset and the lease liability at the date of
initial application. The measurement principles of IFRS 16 are
only applied after that date.
Following the adoption of IFRS 16 the group has used the
following practical expedients permitted by the standards:
• applying a single discount rate to a portfolio of leases with
reasonably similar characteristics
• excluding initial direct costs for the measurement of the
right of use asset at the date of initial adoption
Operating lease commitments as at 31
Dec 2018
Discounted leases using the group
borrowing rate as at 1 Jan 2019
Finance leases recognized as at 31
December 2018
Current lease liabilities
Non-current lease liabilities
1 Jan 2019
£ ‘000
1,096
984
274
1,258
237
1,021
1,258
The change in accounting policy altered specific items in the
balance sheet on 1 January 2019 as shown below:
• Property, plant & equipment – decreased by £269,000
• Right of use assets – increased by £1,258,000
• Lease liabilities – increased by £984,000
2.1 Going concern
Bango had cash of £2.7m at 31 December 2019 (31 December
2018: £3.8m) and financing debt of £0.2m (31 December 2018:
£0.3m). Bango grew its EUS and revenue in 2019 in line with
prior year trends, cash consumption reduced in 2019, mainly
due to the stable cost basis of the platform. The Board
believes there is sufficient cash and resources to support both
planned investments to grow sales, and to develop new
products. 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 fell 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
Bango PLC | Annual Report 2019 35
Notes to the financial statements
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
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.
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.
•
•
•
36
•
•
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. 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
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.
The group has applied the simplified approach to measuring
expected credit losses, which uses a lifetime expected loss
allowance. To measure the expected credit losses, trade
receivables have been grouped based on days overdue. The
expected loss rate against certain balances is adjusted where
there are specific indicators that the trade receivable is either
irrecoverable or the risk of loss is high. Indicators include,
amongst others, the failure of a debtor to engage in a
repayment plan with the group or a failure to make
contractual payments for a period greater than 120 days past
due.
Bango PLC | Annual Report 2019
Notes to the financial statements
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
method on
the
temporary differences. This
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 Leases
As in note 2, the group has changed its accounting policy for
leases where the group is a lessee. The new policy is detailed
in note 5 with the impact of the change shown in note 2. Until
31 December 2018, leases of property, plant and equipment
where substantially all the risks and rewards of ownership
were transferred to the Group were classified as finance
leases and shown in note 9.
The finance leased asset is recognized 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 were
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. Leases where the risks and 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.
From 1 January 2019, leases are recognized as a right of use
asset with a corresponding liability at the net present value at
the date on which the asset is available for use by the group.
Lease liabilities include the net present value of the remaining
lease payments; fixed and variable payments less any
incentive; and residual amounts and purchase or extended
options where it’s reasonably certain to exercise the option;
The lease payments are discounted using the lessee’s
incremental borrowing rate if the interest rate implicit in the
lease cannot be readily determined.
Right of use assets are measured at cost to include the lease
liability, direct and restoration cost and are generally
depreciated over the shorter of the asset’s useful life and the
lease term on a straight-line basis.
Payments associated with short term leases of equipment and
vehicles and all leases of low value assets are recognized on
a straight-line basis as an expense in the profit and loss.
3.10 End User Spend
EUS is the total value of transactions processed by the Bango
Platform excluding taxes. It is the most significant KPI (Key
Performance Indicator) to measure the growth 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
alongside the unique Bango technology.
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.
3.11 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. One revenue stream relates to payment transactions
processed by the Bango Platform and the other stream relates
to data activity.
3.11.1 Revenue linked to Payment activity
Bango payment revenue is contractually determined as the
fee from every transaction processed through the Bango
Platform or as a fee based on the value of the transaction or
a fixed fee per transaction or connection. 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
integration or support fees:
•
Integration fees – where Bango charges the payment
provider or the merchant for connecting to the Bango
Platform. Revenue is recognized on completion of
contracted milestones, including signing of commercials,
delivery of technical design and activation of routes.
Bango PLC | Annual Report 2019 37
Notes to the financial statements
•
Support fees – where Bango provides period services
which are recognized at point of invoice.
3.11.2 Data activity
Revenue from data activity consists of fees charged for
making data useable by merchants or other advertisers and
a recurring fee for using the Audiens CDP as a service.
The transaction price for data activity is clearly defined in
contracts and is either a one off or monthly fee. The
performance obligations are to supply specified segments of
data.
Revenue is recognized at point of supply for data activity.
3.12 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.
3.13 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.
On the exercise of share options, an amount equal to the fair
value of the option at the date it was granted is transferred
from the share-based payments reserve into retained
earnings.
Where the company grants options over its own shares to the
employees of its subsidiaries it recognizes, in its individual
financial statements, an increase in the cost of investment in
its subsidiaries equivalent to the equity-settled share-based
payment charge recognized in its consolidated financial
statements with the corresponding credit being recognized
directly in equity.
3.14 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.
38
The functional currency of the Group is Sterling. Exchange
differences arising from the translation of foreign operations
income and
are
accumulated in a foreign currency translation reserve within
equity.
in other comprehensive
recognized
3.15 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.
3.16 Financial instruments
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.
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
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.
3.17 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 account
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.
Share-based payment reserve
The share-based payment reserve represents equity-settled
Bango PLC | Annual Report 2019
Notes to the financial statements
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.
3.18 Exceptional items
Exceptional items are those significant one off items which are
disclosed by virtue of their size of incidence to enable a full
understanding of the financial performance.
3.19 Significant accounting estimates and judgements
Revenue recognition
There are a number of key judgements taken by management
in determining the most appropriate presentation of revenues
generated from services to end users based principally on the
basis of the gross profit generated from each segment and
the nature of the revenue. The Directors have considered IFRS
15 and determined that the current recognition and
presentation is appropriate.
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
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
(2018:
£5,778,000).
is £6,566,000
costs
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 to
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.
Impairment of goodwill
The Group tests goodwill for impairment on an annual basis
in line with the accounting policy noted above. This involves
judgement regarding the future development of the business
and the estimation of the level of future growth, cash flows
and an appropriate discount rate to support the carrying
value of goodwill.
3.20 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 2019. There was no impact on
the presentation of financial statements of Bango PLC other
than those shown in the notes. 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 2020, or
later periods, have been adopted early.
The new standards and interpretations are not expected to
have any significant impact on the financial statements when
applied.
3.21 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 2019 39
Notes to the financial statements
4 Segment reporting
(a) End User Spend (“EUS”)
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.
2019
2018
£ ‘000
£ ‘000
End User Spend
1,093,440
558,173
(b) Revenue and gross profit
Bango, based on the information reviewed by the chief operating decision maker, identifies two operating segments. In line with its
revenue streams, one revenue stream relates to payment transactions processes by the Bango Platform and the other stream relates
to data 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.
Year to 31 December 2019
Payment
activity
Data
activity
Group
Total
£ ‘000
£ ‘000
£ ‘000
£ ‘000
Segment revenue
Cost of sales
Segment gross profit
7,158
(72)
7,086
2,152
(1,341)
811
Administrative expenses
Exceptional item
Share based payments
Depreciation
Amortization
Movement in put and call option
Interest payable
Interest income
-
-
-
(7,448)
(165)
(806)
(476)
(1,723)
(309)
(58)
12
9,310
(1,413)
7,897
(7,448)
(165)
(806)
(476)
(1,723)
(309)
(58)
12
Segment net profit/ (loss)
7,086
811
(10,973)
(3,076)
Segment assets
Segment liabilities
Net assets
2,827
(1,081)
1,746
3,156
(396)
2,760
13,304
(3,113)
10,191
19,287
(4,590)
14,697
40 Bango PLC | Annual Report 2019
Notes to the financial statements
Year to 31 December 2018
Segment revenue
Cost of sales
Segment gross profit
Administrative expenses
Share based payments charge
Depreciation
Amortization
Interest payable
Interest income
Payment
activity
Data
activity
Group
Total
£’000
5,248
-
5,248
£’000
£’000
1,371
(796)
575
-
-
-
£’000
6,619
(796)
5,823
(6,690)
(6,690)
(1,035)
(270)
(1,345)
(68)
15
(1,035)
(270)
(1,345)
(68)
15
Segment net profit/ (loss)
5,248
575
(9,393)
(3,570)
Segment assets
Segment liabilities
Net assets
2,774
(83)
2,691
3,108
(438)
2,670
13,879
(3,271)
10,608
19,761
(3,792)
15,969
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 the Bango Data
Platform 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 general accruals and trade
payables.
(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 the World
2019
£ ‘000
2018
£ ‘000
173
2,440
1,546
5,151
9,310
30
1,339
1,559
3,692
6,620
Segment revenue is based on the location of the partners. All turnover is spread over many territories, of which £3.0m comes from
two partners in Rest of World and £1.0m comes from a partner in USA and Canada. (2018: £0.9m USA and Canada, £2.7m from two
partners in Rest of the World).
Bango PLC | Annual Report 2019 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
2019
£ ‘000
11,007
2,408
2018
£ ‘000
10,817
1,679
13,415
12,496
Cost
At 1 January 2019
FX Revaluation
Additions
Transfer to leases
At 31 December 2019
Depreciation
At 1 January 2019
Charge for the year
Transfer to leases
At 31 December 2019
Net book value
At 31 December 2019
Leasehold
improvements
£ ‘000
Office
equipment
£ ‘000
Computer
equipment
£ ‘000
365
-
11
(85)
291
319
13
(60)
272
274
(1)
30
-
303
168
32
-
200
2,463
-
106
(760)
1,809
2,047
117
(516)
1,648
Total
£ ‘000
3,102
(1)
147
(845)
2,403
2,534
162
(576)
2,120
19
103
161
283
From 2019 leased assets are presented as a separate line item in the balance sheet and shown in Note 5.2. Refer to Note 2 for the
details about the changes in accounting policy. Finance leases recognized as at 31 December 2018 have been transferred to right
of use assets.
Cost
At 1 January 2018
Additions
At 31 December 2018
Depreciation
At 1 January 2018
Charge for the year
At 31 December 2018
Net book value
At 31 December 2018
Leasehold
improvements
£ ‘000
Office
equipment
£ ‘000
Computer
equipment
£ ‘000
360
5
365
286
34
320
183
91
274
150
18
168
2,278
185
2,463
1,828
218
2,047
Total
£ ‘000
2,821
281
3,102
2,264
270
2,534
45
106
417
568
42 Bango PLC | Annual Report 2019
Notes to the financial statements
Prior to the current year, leases were classified as either operating or finance leases. From January 1 2019, leases are recognized as
a right to use asset with a corresponding liability. Assets and liabilities are initially measured at the present value at the initial date
using the implied company rate. These include all payments, residual values and termination charges.
5.2 Leases
Right of use assets
Building
Computer equipment
Others
Lease liabilities
Current
Non-current
Amounts recognized in profit or loss
Depreciation charge of right of use assets
Building
Computer equipment
Others
Interest expense (included in finance cost)
Expense relating to leases of low-value assets that are not shown above as short-term
leases (included in administrative expenses)
The total cash outflow for leases in the year was £333,000.
31 Dec 2019
£ ‘000
1 Jan 2019
£ ‘000
797
126
8
931
303
748
1,051
984
244
30
1,258
237
1,021
1,258
2019
£’000
2018
£’000
179
118
17
314
35
14
-
-
-
-
-
-
The company leases a building and equipment with varying terms ranging from 12 months to 10 years.
All leases amounts are recognized where there’s a reasonable certainty that the leases will be extended beyond its break point, the
assumption made is that the lease will continue to the end of the lease term.
Bango PLC | Annual Report 2019 43
Notes to the financial statements
5.3 Intangible assets
Domain
Names
Internal
Development
£ ‘000
£ ‘000
Acquired
intangibles
(Software)
£ ‘000
Acquired
intangibles
(Contracts)
£ ‘000
Acquired
intangibles
(Brand)
£ ‘000
33
-
-
33
33
-
-
33
-
11,490
2,088
(19)
13,559
5,712
1,283
(2)
6,993
6,566
2,679
-
(69)
2,610
670
322
(26)
966
1,644
541
-
(13)
528
289
109
(10)
388
140
124
-
(1)
123
39
9
(1)
47
76
Domain
Names
Internal
Development
£ ‘000
£ ‘000
Acquired
intangibles
(Software)
£ ‘000
Acquired
intangibles
(Contracts)
£ ‘000
Acquired
intangibles
(Brand)
£ ‘000
33
-
-
33
33
-
-
33
-
8,916
2,574
-
11,490
4,884
828
-
5,712
5,778
786
1,856
37
2,679
263
390
17
670
2,009
517
-
24
541
172
104
13
289
252
44
78
2
124
14
24
1
39
85
Goodwill
Total
£ ‘000
£ ‘000
3,804
-
(29)
18,671
2,088
(131)
3,775
20,628
-
-
-
-
6,743
1,723
(39)
8,427
3,775
12,201
Goodwill
Total
£ ‘000
£ ‘000
1,200
2,548
56
3,804
-
-
-
-
11,496
7,056
119
18,671
5,366
1,346
31
6,743
3,804
11,928
Cost
At 1 January 2019
Additions
FX revaluation
At 31 December 2019
Amortization
At 1 January 2019
Charge for the year
FX Revaluation
At 31 December 2019
NBV at
31 December 2019
Cost
At 1 January 2018
Additions
FX revaluation
At 31 December 2018
Amortization
At 1 January 2018
Charge for the year
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.
Goodwill is reviewed annually for signs of impairment. Goodwill relates to the acquisition of BillToMobile Inc, £0.9m in May 2016 and
Audiens SRL in 2018 ,£ 2.9m. 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 (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.
44 Bango PLC | Annual Report 2019
Notes to the financial statements
6 Trade and other receivables
Trade receivables
Other receivables
Prepayments and accrued income
Expected credit loss of trade receivables
Research and development tax credits
Total
31 Dec 2019
£ ‘000
31 Dec 2018
£ ‘000
1,566
171
907
2,644
(56)
2,588
597
3,185
1,443
224
1,153
2,820
(5)
2,815
635
3,450
At 31 December 2019, some of the unimpaired trade receivables are past their due date. The age of financial assets past due but not
impaired is as follows:
Not more than one month
One to two months
Three to twelve months
More than twelve months
31 Dec 2019
£ ‘000
31 Dec 2018
£ ‘000
398
272
157
4
831
612
160
103
-
875
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.
As at 31 December 2019
Expected credit loss rate
Gross carrying amount
Lifetime expected credit loss
Current
£ ‘000
0.5%
398
2
One to three
months
£ ‘000
0.5%
272
1
Three to twelve
months
£ ‘000
1.5%
157
2
Over
twelve
months
£ ‘000
5%
4
-
Total
£ ‘000
831
5
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 specific provision of £51,000 has been recognized for a
debt due from a client.
As at 31 December 2018
Expected credit loss rate
Gross carrying amount
Lifetime expected credit loss
Current
£ ‘000
-
613
-
One to three
months
£ ‘000
-
159
-
Three to twelve
months
£ ‘000
5%
103
5
Total
£ ‘000
875
5
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.
Bango PLC | Annual Report 2019 45
Notes to the financial statements
A reconciliation of allowance for expected credit losses for trade receivables is provided below:
Brought forward provision
Increase in provision
Carry forward provision
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 2017
Issue of new shares
Exercise of share options
As at 31 December 2018
Exercise of share options
As at 31 December 2019
31 Dec 2019
£ ‘000
31 Dec 2018
£ ‘000
5
51
56
No
66,422,803
3,310,693
534,412
5
-
5
£ ‘000
13,285
662
107
70,267,908
14,054
417,834
83
70,685,742
14,137
During the year 417,834 share options were exercised at exercise prices between 44 pence and 136 pence and a par value of 20
pence per share. The total proceeds were £0.34m of which £0.08m was recognized as share capital and £0.26m as share premium.
On 23 January 2018, Bango also issued to the vendors of Audiens 738,399 warrants over new Bango shares, exercisable at a price
of £1.80 each, which will lapse after 10 years.
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
or schemes 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
138
110
163
83
129
138
31 Dec 2019
Options
4,181,059
1,676,000
(793,608)
(417,834)
4,645,617
4,181,059
Average
exercise price
per share
p
129
163
164
98
138
128
31 Dec 2018
Options
4,079,616
1,410,000
(774,145)
(534,412)
4,181,059
2,121,501
Outstanding at 1 January 2018
Granted
Lapsed
Exercised
Outstanding at 31 December
Exercisable at 1 January
The weighted average share price at date of options exercised during the year was 128.62 pence (2018: 145.96 pence).
The fair value of options granted during the year, determined using the Black-Scholes valuation model, were between 64-76 pence.
Significant inputs into the model include a weighted average share price of 110 pence (31 December 2018: 163 pence) at the grant
date, the exercise prices, volatility of 60% (31 December 2018: 55.4-58.4%), dividend yield of nil (31 December 2018: nil), an expected
option life of five years (31 December 2018: five years) and an annual risk-free interest rate of 0.22-0.90% (31 December 2018: 1.04-
1.17%). The forfeiture rate is assumed to be 20% (31 December 2018: 5%) of the options issued.
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.
46
Bango PLC | Annual Report 2019
Notes to the financial statements
At 31 December 2019, Bango PLC had the following outstanding options and exercise prices:
Average
exercise
price per share
Options
31 Dec 2019
Remaining
Contractual
Average
exercise
Life price per share
Options
31 Dec 2018
Remaining
Contractual
Life
Expiry date
Pence
Number
Months
Pence
Number
Months
59.50
167.00
82.50
82.00
142.50
166.50
-
232.00
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
90.00
92.50
137.50
128.50
7,125
8,875
10,875
10,620
16,322
31,323
-
55,000
10,000
-
55,000
37,000
82,040
106,872
228,118
335,674
301,266
351,177
389,000
429,500
305,500
150,000
100,000
100,000
836,830
537,500
150,000
4,645,617
3
9
15
20
27
33
-
39
39
-
45
51
58
63
69
75
81
87
93
99
105
105
106
109
112
117
118
94
16 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
21 March
22 September
14 March
19 September
21 September
23 October
03 January
27 March
18 September
1 October
At 31
December
2020
2020
2021
2021
2022
2022
2022
2023
2023
2023
2023
2024
2024
2025
2025
2026
2026
2027
2027
2028
2028
2028
2028
2029
2029
2029
2029
8 Trade and other payables
Note
59.50
167.00
82.50
82.00
142.50
166.50
218.00
232.00
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
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
15
21
27
33
39
45
-
51
51
-
58
64
70
75
81
87
93
99
105
111
117
117
118
4,181,059
96
31 Dec 2019
31 Dec 2018
£ ‘000
£ ‘000
Trade payables
Social security and other taxes
Put and call option
Accruals and deferred income
1,314
259
990
858
1,711
203
681
814
3,421
3,409
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.
Bango PLC | Annual Report 2019
47
Notes to the financial statements
9 Commitments
From 1 January 2019, leases are recognized as a right of use asset with a corresponding liability. Assets and liabilities are initially
measured at the present value at the initial date using the implied company rate. These include all payments, residual values and
termination charges.
Bango leases two offices and some small office equipment under non-cancellable operating leases for which the future aggregate
minimum lease payments were 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
£ ‘000
247
899
76
1,222
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
10 Expenses by nature
Employee benefit expense
Depreciation and amortization
Other expenses
Analyzed as:
Administrative expenses
Exceptional items
Share based payments
Depreciation
Amortization and impairment
31 Dec 2019
£ ‘000
31 Dec 2018
£ ‘000
136
54
190
(9)
181
2019
£ ‘000
7,065
2,199
1,354
10,618
7,448
165
806
476
1,723
10,618
134
158
292
(18)
274
2018
£ ‘000
6,518
1,615
1,207
9,340
6,690
-
1,035
270
1,345
9,340
48
Bango PLC | Annual Report 2019
Notes to the financial statements
11 Loss before taxation
Loss before taxation is stated after charging / (crediting):
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
Exchange rate variances
Depreciation on property, plant and equipment – lease assets
Depreciation on property, plant and equipment – owned assets
Depreciation on property, plant and equipment – right of use assets
Amortization of intangible assets
Movement in put and call option
Exceptional items
2019
£ ‘000
2018
£ ‘000
6
69
-
-
-
-
-
127
-
162
314
1,723
309
165
6
68
10
7
29
35
237
(59)
112
158
-
1,345
-
-
Exceptional items relate to costs spent during the year on the re-branding of Bango following the acquisition of Audiens and the
decision to create a new product named Marketplace. This is a new product which focuses on creating insights and extending
customers reach using the Bango platform.
Put and call option – deferred consideration relates to the additional charge arising from the movement in the fair value of the
call option which was offered as part of the acquisition of Audiens. The remaining 1.55% was acquired on 15 January 2020.
12 Employee benefit expense
The average number of staff employed by Bango during the financial year amounted to:
Admin & marketing staff
Technical & support staff
The aggregate payroll costs of the above were:
Wages and salaries
Social security costs
Other pension costs
Share based remuneration
2019
No
23
68
91
2019
£ ‘000
5,450
499
310
806
7,065
2018
No
21
75
96
2018
£ ‘000
5,050
471
433
1,035
6,989
Included in the above payroll costs is £2,004,000 (31 December 2018: £2,359,000) capitalized within internal development (note 5.3).
Bango PLC | Annual Report 2018 49
Notes to the financial statements
The Directors have identified eleven (31 December 2018: nineteen) 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
2019
£ ‘000
1,205
147
83
301
1,736
2018
£ ‘000
1,721
199
56
515
2,491
2019
£ ‘000
784
2018
£ ‘000
661
Further details can be found in the Remuneration Committee Report. The highest paid Director received total salary of £249,000
(2018: £217,000), pension contributions of £8,000 (2018: £5,000), and share based compensation of £56,000 (2018: £88,000).
The number of Directors who accrued benefits under pension schemes was three (2018: three).
The total share based compensation for Directors was £140,000 (2018: £265,000).
For details of Directors options please see the Directors and their interest section of the Directors’ report.
14 Investment income and interest payable
Bank interest receivable
Finance lease interest payable
15 Taxation
Income tax
UK taxation
R&D tax credits receivable
Under provision of prior year credit
Foreign taxation
R&D tax credits receivable
Under provision of prior year R&D credit
Tax paid overseas
Under provision of prior year overseas tax
Total current tax
Deffered tax for current year
Under provision in respect of prior year
2019
£ ‘000
12
2019
£ ‘000
58
2018
£ ‘000
15
2018
£ ‘000
68
2019
£ ‘000
2018
£ ‘000
(465)
(4)
(145)
(154)
6
13
(749)
(20)
29
(740)
(635)
(17)
-
-
9
(14)
(657)
(49)
-
(706)
50 Bango PLC | Annual Report 2019
Notes to the financial statements
Income tax expense for the year differs from the standard rate of taxation as follows:
Loss on ordinary activities before taxation
Loss on ordinary activities multiplied by standard rate of tax of 19.00% (2018: 19.00%)
Effect of:
Expenses not deductible for tax purposes
Deferred tax not recognized
R&D tax credits
Adjustments in relation to prior years
Total tax
2019
£ ‘000
(3,076)
(584)
30
536
(610)
(112)
(740)
2018
£ ‘000
(3,570)
(678)
24
614
(635)
(31)
(706)
At 31 December 2019, the unutilized tax losses carried forward amounted to £34 million (at 31 December 2018: £33m).
Deferred tax assets/ (liabilities):
Share option deduction
Tax losses
Accelerated capital allowances and capitalized
development costs
Provided
Provided
31 Dec 2019
£000
31 Dec 2018
£’000
Unrecognized
31 Dec 2019
£000
Unrecognized
31 Dec 2018
£000
-
665
(783)
(118)
-
723
(832)
(109)
34
4,864
-
4,898
365
4,176
-
4,541
All unrecognized deferred tax balances relate to the UK. No deferred tax asset has been recognized in respect of the above
temporary differences due to the unpredictability of future taxable trading profits.
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
2019
£ ‘000
(2,336)
2018
£ ‘000
(2,864)
Weighted average number of ordinary shares in issue
70,474,897
69,736,418
Earnings (basic) per share
(3.32) p
(4.11) 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.
The weighted average number of shares and the loss for the year for the purposes of calculating diluted loss per share are the
same as for the basic loss per share calculation. This is because the outstanding share options would have the effect of reducing
the loss per share and would not, therefore, be dilutive under the terms of IAS 33.
Bango PLC | Annual Report 2019
51
Notes to the financial statements
17 Cash generated from / (used by) operations
Loss for the financial year
Depreciation, amortization and impairment
Taxation in income statement
Investment income
Interest payable
Foreign exchange movement
Share-based payment expense
(Increase)/decrease in receivables
Increase/(decrease) in payables
Corporation tax rebate
Tax paid overseas
Net cash used by operations
2019
£ ‘000
(2,336)
2,199
(740)
(12)
367
33
806
227
(297)
247
787
-
2018
£ ‘000
(2,864)
1,615
(706)
(15)
68
(45)
1,035
(417)
(691)
(2,020)
438
(9)
1,034
(1,591)
18 Financial assets and liabilities
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 2019
£ ‘000
31 Dec 2018
£ ‘000
4,661
4,661
5,253
5,253
52 Bango PLC | Annual Report 2019
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 2019
£ ‘000
31 Dec 2018
£ ‘000
1,974
2,687
4,661
1,438
3,815
5,253
Financial liabilities included in the statement of financial position relate to the following IFRS 9 categories:
31 Dec 2019
£ ‘000
31 Dec 2018
£ ‘000
Financial liabilities measured at amortized cost
Total financial liabilities
3,162
3,162
3,206
3,206
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 2019
£ ‘000
31 Dec 2018
£ ‘000
2,303
859
3,162
1,711
1,495
3,206
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.
Bango PLC | Annual Report 2019 53
Notes to the financial statements
At 31 December 2019 Bango’s financial liabilities had contractual maturities which are summarized below:
31 Dec 2019
£ ‘000
31 Dec 2018
£ ‘000
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
Right to use obligations within 12 months
Right to use obligations 1 year to 5 years
Financial liabilities
3,162
-
-
-
303
748
4,213
3,206
60
62
152
-
-
3,480
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 2019 Bango only had lease liabilities including liabilities related to the right of use assets.
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.
£
Financial
assets
31 Dec 2019
£
Financial
liabilities
£
Net assets/
(liabilities)
£
Financial
assets
31 Dec 2018
£
Financial
liabilities
£
Net assets/
(liabilities)
Nominal amounts
US $
USD
Euro
EUR
Australian $
AUD
Canadian $
CAD
Indonesia Rp
IDR
South African Rand
ZAR
Saudi Arabian Riyal
SAR
Japanese Yen JPY
Other
1,518
1,536
36
102
39
16
73
703
55
653
1,302
-
-
-
-
-
83
3
865
234
36
102
39
16
73
620
52
1,203
1,059
58
70
27
14
41
794
54
974
1,136
-
-
-
-
-
21
20
229
(77)
58
70
27
14
41
773
34
1,169
Short term exposure
4,078
2,041
2,037
3,320
2,151
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 £97,000 and if it moved by 10% then there would be a total loss of £185,000.
54
Bango PLC | Annual Report 2019
Notes to the financial statements
22 Post balance sheet event
On 23 January 2018, Bango purchased 98.45% of Audiens S.R.L. from Digitouch S.p.A, for an initial consideration of €2.11 in cash.
Bango also issued 521,803 new Bango shares to the vendors of Audiens and 738,399 warrants over new Bango shares, exercisable
at a price of £1.80 each, which will lapse after 10 years.
On 15 January 2020 the deferred 1.55% shares in Audiens were purchased for a consideration of £0.99m (€1.16m), the value being
based on the growth of the business in the two years post acquisition.
Bango PLC | Annual Report 2019 55
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
Share-based payment reserve
Retained earnings
Total equity
LIABILITIES
Trade and other falling due within one year
Total liabilities
Total equity and liabilities
Note
31 Dec 2019
£’000
31 Dec 2018
£’000
IV
V
V
VIII
IX
IX
IX
VI
49,236
6,238
48,431
6,277
55,474
54,708
178
178
29
29
55,652
54,737
14,137
36,057
1,673
3,634
14,054
35,796
1,673
3,160
55,501
54,683
151
151
54
54
55,652
54,737
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 £332,000 (2018: £247,000).
These financial statements were approved by the Directors on 16 March 2020 and are signed on their behalf by:
C Rand
Director
Paul Larbey
Director
Company registration number 05386079
The notes on pages 59 to 62 are an integral part of these Company financial statements
56
Bango PLC | Annual Report 2019
Statement of changes in Equity of Bango PLC
For the year ended 31 December 2019
Share
capital
£ ‘000
13,285
-
107
662
-
-
769
-
14,054
14,054
83
-
83
-
14,137
Share
premium
account
£ ‘000
31,248
-
419
4,462
(333)
-
4,548
-
35,796
35,797
260
-
260
-
36,057
Share-based
payment
reserve
£ ‘000
Retained
earnings
£ ‘000
-
-
-
939
-
734
1,673
-
1,673
1,673
-
-
1,673
-
1,673
2,372
1,035
-
-
-
-
1,035
(247)
3,160
3,160
-
806
806
(332)
3,634
Total
£ ‘000
46,905
1,035
526
6,063
(333)
734
8,025
(247)
54,683
54,683
344
806
1,150
(332)
55,501
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
Balance at 31 December 2018
Balance at 1 January 2019
Exercise of share options
Share based payments
Transactions with owners
Loss for the year
Balance at 31 December 2019
The notes on pages 59 to 62 are an integral part of these Company financial statements
Bango PLC | Annual Report 2019 57
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
Net cash used by investing activities
Cash flows from financing activities
Proceeds from issuance of ordinary shares
Costs associated with issuance of ordinary shares
Net cash generated from financing activities
Net increase in cash and cash equivalents
Cash and cash equivalents at beginning of year
Cash and cash equivalents at end of year
2019
£’000
2018
£’000
(332)
(247)
(109)
97
(344)
(9)
45
(211)
-
(5,002)
(5,002)
5,546
(333)
5,213
-
-
-
344
-
344
-
-
-
The notes on pages 56 to 58 are an integral part of these Company financial statements
58
Bango PLC | Annual Report 2019
Notes to the financial statements
I. 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 2019, 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 main judgement in respect of the company is the carrying value of investments and
group debtors which are supported by future forecasted cashflows.
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 behavioral
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.
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 account
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.
Share-based payment reserve
Share-based payment 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.
II. 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 page 17. 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 £136,429 (31 December 2018: £110,691) has been recognized within the parent company’s own figures relating to wages and salaries.
III. 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.
Bango PLC | Annual Report 2019 59
Notes to the financial statements
IV. Investments
Cost
Shares in subsidiary undertakings at 31 December 2018
Share based payments
Shares in subsidiary undertakings at 31 December 2019
Net book amount
At 31 December 2019
At 31 December 2018
£ ‘000
48,430
806
49,236
49,236
48,430
Fixed asset investments are shown at cost less provision for impairment.
Details of subsidiary undertakings at 31 December 2019 are as follows:
Country of
incorporation
Class of
share capital
held
Held by the
company
Nature of business
Bango.net Limited 1
England & Wales
Ordinary
100%
Bango Movil 3
Spain
Ordinary
Bango SP Limited 1
Bango Employee Benefits
Limited 1
Bango do Brasil Cessão de
Licenças de Programas de
Computador Ltda * 4
Bango Mobile Limited ** 5
Bango Kabushiki Kaisha 6
Bango Holdings Inc 2
BillToMobile Inc 2
Bango Inc 2
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 1
Bango Deep Limited 1
Audiens Limited 1
Audiens SRL*** 7
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)
1 5 Westbrook place, Westbrook Drive, Cambridge, CB4 1YG, United Kingdom
2 675 N. First Street, Suite 1180, San Jose, California, 95112, United States
3 Paseo de la Castellana 141, Edificio Cuzo IV, Madrid, 28046, Spain
4 1912 Av. Brigadeiro Faria Lima, Jardim Paulistano, 01451-907, Sao Paulo, Brazil
5 1 Murtala Muhammed Drive, Ikoyi, Lagos, Nigeria
6 Spline Aoyama Tokyu Building 6F, 3-1-3 Minami-Aoyama, Minato, Tokyo, 107-0062, Japan
7 Piazza della Repubblica, 14-16, Milano, 20124, Italy
60 Bango PLC | Annual Report 2019
Notes to the financial statements
V. Receivables
Amounts due from Group undertakings (due after one year)
Other receivables (due within one year)
31 Dec 2019
£ ‘000
31 Dec 2018
£ ‘000
6,238
178
6,416
6,277
29
6,306
Interest in inter-company loans from the parent company to the subsidiary undertakings are charged at a reasonable market rate
of interest, calculated monthly on the balance outstanding.
VI. Payables
Trade payables
Accruals
31 Dec 2019
£ ‘000
31 Dec 2018
£ ‘000
89
62
151
18
36
54
VII. Financial assets and liabilities
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 2019
£ ‘000
31 Dec 2018
£ ‘000
6,416
6,416
6,307
6,307
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 2019
£ ‘000
31 Dec 2018
£ ‘000
178
29
6,238
6,416
6,278
6,307
31 Dec 2019
£ ‘000
31 Dec 2018
£ ‘000
151
151
54
54
Bango PLC | Annual Report 2019 61
Notes to the financial statements
These financial liabilities are included in the statement of financial position within the following headings:
Current financial liabilities
Trade payables
Accruals
Total financial liabilities
VIII. Share capital
Allotted, called up and fully paid:
Ordinary shares of 20p each in Bango PLC
As at 31 December 2017
Issue of new shares
Exercise of share options
As at 31 December 2018
Exercise of share options
As at 31 December 2019
31 Dec 2019
£ ‘000
31 Dec 2018
£ ‘000
89
62
151
18
36
54
No
66,422,803
3,310,693
534,412
£ ‘000
13,285
662
107
70,267,908
14,054
417,834
83
70,685,742
14,137
During the year 417,834 share options were exercised at exercise prices between 90.00 pence and 137.50 pence and a par value of
20 pence per share. The total proceeds were £0.34m of which £0.08m was recognized as share capital and £0.26m as share premium.
During the year 1,670,000 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 4,645,617 options were outstanding. Further details relating to employee share options are provided in note 7 in the
Group financial statements.
IX. Related party
Subsidiary
Others
Subsidiary
Purchases
from
31 Dec 2019 31 Dec 2018
£ ‘000
£’000
136
22
158
136
7
143
Receivables
outstanding
31 Dec 2019 31 Dec 2018 31 Dec 2019 31 Dec 2018
£ ‘000
Creditors
outstanding
£ ‘000
£’000
£’000
5,192
6,278
5,192
6,278
171
171
-
-
62 Bango PLC | Annual Report 2019