Contents
Strategic report
Highlights......................................................................................................................................02
Chair’s statement..........................................................................................................................................03
Group overview..............................................................................................................................................04
Business model..............................................................................................................................................05
CEO’s statement............................................................................................................................................07
Strategy for growth.......................................................................................................................................10
Sustainability and Section 172....................................................................................................................11
CFO’s statement.............................................................................................................................................16
Principal risks and uncertainties..............................................................................................................18
KPIs...........................................................................................................................................................19
NHN JV...............................................................................................................................................................20
Technology and innovations....................................................................................................................21
Report of Directors
Directors...................................................................................................................................................23
Company information..................................................................................................................................25
Directors’ report..............................................................................................................................................26
Corporate governance report.................................................................................................................28
Audit committee report............................................................................................................................32
Nominations committee report............................................................................................................33
Remuneration committee report.............................................................................................................34
Financial statements
Independent auditor’s report to the members of Bango PLC.................................................37
Consolidated statement of financial position....................................................................................43
Consolidated statement of comprehensive income.....................................................................44
Consolidated cash flow statement........................................................................................................45
Consolidated statement of changes in equity..................................................................................46
Notes to the consolidated financial statements..............................................................................47
Statement of financial position of Bango PLC………………….........................................................69
Statement of changes in equity of Bango PLC................................................................................70
Cash flow statement of Bango PLC....……………......…………………………………………………….........71
Notes to the financial statements of Bango PLC..........................................................................72
1 Financial highlights
•
•
•
Revenue grew by 70% to £12.2M
(2019: £7.2M)*.
•
Cash at 31 December 2020 was
£5.8M (31 December 2019: £2.7M).
End User Spend (EUS) increased to
£1.9B, the sixth consecutive year of
strong growth (2019: £1.1B).
• Net Profit was £4.7M (2019: loss
£2.3M), including £3.9M profit from
the creation of the JV with NHN.
Adjusted EBITDA** grew by 16x to
£4.6M (2019: £0.3M)*.
• Net Profit from continuing operations
loss £2.2M)
£0.7M
(2019:
was
comprising:
Ν
£1.27M profit from the Bango
Platform
£0.53M loss from the 40% share
of the NewDeep JV
Ν
* Adjusted to exclude discontinued operations
** Adjusted EBITDA is operating profit before depreciation, amortization, share based payments and exceptional items from continuing operations
Operational highlights
•
•
•
Amazon.co.jp payment methods
extended to SoftBank customers in
June 2020.
Three-year platform deal signed with
a major telecoms provider for third
party service bundling.
Agreement with Microsoft to bring
cloud gaming services to Telcos
worldwide, starting with Xbox Game
Pass Ultimate and Xbox All Access
to
which extends
hardware bundling.
subscriptions
•
•
•
BT Group launched BritBox and
Amazon subscriptions using
the
Bango Platform.
Video streaming subscription services
OnDemand Media (Chinese, Korean
and Vietnamese content), EpicOn
and DocuBay joined the Bango
circle.
bundling
Subscription
extended
beyond telecoms to two of the largest
US brick-and-mortar retailers.
•
•
•
10x growth
in app developers
engaged with Bango Marketplace
and 20x more Bango Audiences used
to target their marketing campaigns.
12 partners
Channel partner program launched
for Bango
with
increased
Marketplace providing
availability of Bango Audiences to
app developers.
Customer Data Platform business was
divested into a JV (NewDeep Limited)
with NHN Group. Bango Marketplace
technology and business remains
100% owned by Bango.
2 and develop all Bango people. Among
all our ESG initiatives, the Board is
particularly proud of achieving certified
carbon-neutral status for 2020.
Since the period end, we welcomed Matt
Garner to the Board as CFO, who brings
global experience that aligns with the
Bango 2025 vision.
Looking ahead to our priorities for 2021
and beyond, the unique application of
payment data, our reputation as a trusted
partner, and our strong new partnerships
give Bango additional
competitive
advantage in the market as we continue
our progress to becoming the technology
behind every payment choice.
We enter 2021 with a fast-growing and
profitable business, a robust balance
sheet, and with the people, partnerships
and technology we need to achieve our
ambitions and deliver continued growth in
the years to come.
Ray Anderson
Chair
Chair’s statement
In turbulent times the commitment and
efforts of the entire Bango team delivered
FY2020
results exceeding ambitious
expectations and built solid foundations
for continued growth in the future.
As the effects of the COVID-19 pandemic
tested business models, Bango proved
itself to be a resilient and highly relevant
company: one that Bango customers both
trust and depend on and that investors
can expect to deliver a strong, sustainable
financial performance.
Lockdowns accelerated online activity
and proved that Bango has positioned
itself well. Bango technology enabled
the major streaming services, education
apps, wellbeing services and all forms
of online entertainment to grow faster
and win tens of millions of new paying
customers. The rising End User Spend
and volume of payment data feeding
into the Bango Platform made it even
more compelling to online merchants. The
virtuous circle strategy demonstrated its
power, and enabled Bango to win many
new customers and partners in 2020,
setting the foundations for continued
rapid growth in the years to come.
Since the beginning of Bango, I have
been passionate about creating win-
these are key
win partnerships, as
to developing a powerful, long-term,
valuable ecosystem for all. The strategic
partnership with Korean internet giant
NHN, announced in April 2020, is already
providing access to cutting edge AI and
machine learning technology to fuel
the Bango data monetization business.
In addition, our NewDeep joint venture
with NHN is showing great progress and
promise.
As the internet giants move to address
the huge growth opportunities across
the Middle East and Africa, we formed
a powerful new partnership with TPAY
Mobile, the leading mobile commerce
company in the region. This partnership
will accelerate the roll-out of new online
services for our customers across the
Middle East, Africa and Turkey. It also
enables innovators and entrepreneurs in
the region to leverage the Bango Platform
to expand globally.
Bango is becoming a vital part of global
commerce, benefiting millions of people’s
daily lives. Innovation around the core
- Bango
Bango Platform continues
technology is now deployed in new
applications linked to brick-and-mortar
brands and in the promising new business
of bundling hardware with online services.
Offered to new customers in the form of
affordable, monthly subscriptions, Bango
is backing this business through the
investment we have made in our powerful
and highly scalable open platform,
providing huge untapped potential to
serve large, new markets.
Bango employees come from a wide
range of different backgrounds and we
cultivate an environment of inclusion and
belonging for them. This active support
for diversity and expression is a key factor
in enabling Bango to outperform the tech
sector in employee engagement and to
attract top talent to the team.
When purpose-led brands like Bango
continue to trailblaze, it is vital we focus
on operating in-line with the Bango
THRIVE values, which complement our
drive for fiscal performance. The Bango
team across the world rose to both the
challenges and opportunities of 2020,
confirming the benefits of the corporate
culture we have built to attract, support
3 Group overview
the
preferred
Bango exists to make online commerce
frictionless and ubiquitous. By providing
technology that enables merchants to
acquire more customers that pay for
products and services online, Bango
platform
becomes
for alternative payments and
thus
to online merchants.
indispensable
Bango collects significant quantities of
data from processing online payments,
and by applying advanced analytics,
Bango generates insights that increase
the effectiveness of online marketing. In
addition to boosting marketing returns
for merchants, this technology enhances
the online experience for consumers by
providing them with the most relevant
and useful advertisements.
Bango customers are
the biggest
names in mobile commerce, reflecting
our relevance and the trust they have in
Bango technology. We are growing our
list of customers continually, providing a
platform for future growth and greater
diversification in the business model.
enables
Payments
Bango
online
merchants and stores to reach over 3
billion users across the globe. The world’s
leading online businesses,
including
Amazon, Google, and Microsoft, use
Bango Payments technology to deliver a
frictionless experience to their customers.
Bango Marketplace
app
marketers to select Bango Audiences
that reach new payers. Bango Audiences
enables
are used in campaigns on Facebook
and other digital marketing platforms
to better target users who can and do
pay, enabling faster revenue generation.
Bango Audiences are created
from
payment insights gathered from billions of
dollars of in-app payments, generated by
hundreds of millions of users worldwide.
By focusing on what consumers actually
buy, Bango is moving targeted online
marketing beyond what was possible
when focusing just on what users search
for (e.g. Google) or what they ‘like’ (e.g.
Facebook).
Twenty years ago, Bango envisioned
consumers using mobile devices to access
the internet, which would eventually lead
to mobile commerce. We believed by
creating the infrastructure to facilitate
mobile commerce, Bango would become
a trusted and valued partner of the key
players in a high fast-growth, global
market. This vision is unchanged, and
Bango has become that trusted partner.
The Bango Platform is a vital connection
between major global players in mobile
in
commerce and payment partners
telecommunications and other mass
market verticals. Over the years they have
come to rely on Bango technology as a
key driver of their business growth.
The audiences that Bango offers to online
marketers through Bango Marketplace
are the product of sophisticated analytics
and a rich and growing database of
payment data. As a tool to improve
the effectiveness of targeted marketing
campaigns, we believe Bango Audiences
are unmatched, and connect marketing
investment directly to revenue outcomes in
a way that has not been possible before.
The Bango strategy is ambitious and
focused on driving growth:
1. Bango Payments expands payment
reach
to billions
for merchants
of potential customers. This is a
volume-based business that grows
quickly, generating revenue at very
high margins and producing huge
amounts of consumer purchase data.
2. Bango Marketplace is the platform
that analyzes this data to create
Bango Audiences (groups of users
based on purchase history), making
Bango
indispensable
to online merchants as they seek
to attract paying customers as
effectively and economically as
possible.
technology
3. The more
payments
Bango
processes, the more effective and
valuable Bango Audiences become.
The financial profile of the business is
currently dominated by Bango Payments,
which is delivering strong growth, is
profitable and cash generative. Bango
Marketplace is new and growing fast and,
with the right investment, also has the
potential to be highly profitable.
.
App stores,
online merchants
Payment providers
App developers
4 Business model
Bango Payments generates revenue by
charging a fee, either to the merchant or
to the payment processor. In the majority
of cases, this fee is proportional to the
value of consumer spending (End User
Spend) processed, enabling revenue to
grow as our customers’ businesses grow.
The fee charged varies with the volume
of transactions from a partner and the
nature of the goods sold.
Bango Marketplace generates revenue
by charging fees to app marketers in
order to benefit from Bango Audiences.
Over time, more app marketers are
moving to a subscription model to pay for
Bango Audiences. Upon payment of the
appropriate fee, the Bango Audience is
applied to the merchant’s online marketing
campaign, acting like a lens that focuses
ads on customers known to pay.
More effective
marketing
Developers &
merchants thrive
More
payment
insights
More
paying
users
More payments
processed
Payment providers
thrive
Single Purchase
Processing Fee
Pay as you Go
Purchases
Platform
Licence Fee
Bango
Payments
Data
Insights
Bango
Audiences
Subscription
Processing Fee
Third Party
Data
Subscription
Purchases
Revenue
Sources
Cost of sales
5 Every customer of the Bango Platform
contributes revenue, most often by the
merchant or payment provider paying
fees proportional to value of transactions
processed. These payment transactions
also generate monetizable transaction
data which we turn into Bango Audiences.
App developers and other merchants can
use Bango Audiences to reach paying
customers. We also have the option to
acquire third-party payments data to
complement Bango generated data and
satisfy particular customer needs.
Income from Bango Audiences is either
a fee per month of audience use or a
subscription service for regular users that
run multiple campaigns; the fee depends
on the extent of the campaign. Each
audience can be used by many different
developers, and each developer uses
multiple audiences for different app titles
and markets. For each audience sale a
usage fee (usually a % of the fee Bango
charge the app marketer) is paid back to
the originator of that data, for example a
mobile operator.
Competition for the innovative technology
developed by Bango comes from legacy
solutions and smaller players attacking
the market through different product
strategies. In the payments and resale
business, legacy solutions – typically
managed by in house teams – are the
main source of competition however,
Bango has a long track record of gradually
replacing stagnating legacy technology.
In Bango Marketplace we are pioneering a
new approach to user acquisition, which is
more tightly coupled to revenue outcomes
than any digital marketing solution before
it. The competition is therefore “legacy
thinking”, which is being challenged by
greater demands from management for
bottom line marketing performance and
by fierce competition for a bigger share of
online spending.
Reach payers
in similar apps
to yours
Bango Audiences. The lens that brings new payers into focus.
Watch the video
Competitive advantages
Track Record
20 years of innovation and growth in online commerce
Trust
Long-term partnerships with the world’s biggest internet companies
Platform effect
Each new partner connecting to Bango benefits from the activity of all existing
partners and improves the performance of everyone across the platform
High margin business
model
The cost of each additional transaction is zero, therefore incremental End User
Spend is very profitable
Virtuous circle
First mover
Valuable purchase data boosts payment volumes, which produces more
purchase data
Only platform applying payment insights to optimize online marketing
campaigns
6 CEO’s statement
Introduction
Achieving
revenue growth of 70%,
adjusted EBITDA of £4.6M (16x increase
on 2019 adjusted EBITDA) and End User
Spend (EUS) approaching £2B, Bango
delivered revenue and profitability ahead
of original market expectations. The
growth in EUS represents both continuing
strong growth in the payments business
and the expanding pool of data that fuels
the data business which we are starting
to monetize through Bango Marketplace.
This is the Bango virtuous circle strategy
in action; the success in app developer
campaigns drive even more payments
which adds to the moat of data used to
generate these insights and the process
repeats.
the world’s
Payments
Bango connects
largest
merchants to customers who purchase
goods using alternative payment methods
including carrier billing (charged to a
phone bill), digital wallets and through
bundled subscription packages. Everyone
connected to the Bango platform benefits
as it grows; the benefits from the unique
data insights fueling merchant growth.
in part by
2020 saw good growth across existing
innovative
routes, driven
features. Using the data insights in the
platform, Bango enabled du (UAE mobile
operator) to convert 20% of its inactive
subscribers into active spenders. In Japan,
we worked with one operator to deploy
an adaptive algorithm that increased
subscription renewal success by 10%.
Innovative features such as these drive
growth for merchants, payments providers
and Bango – a great example of the
virtuous circle in action.
Dozens of new routes were launched in
2020 across both Google and Amazon.
First-time connections for the Google
Play store spanned the globe from New
Zealand to South Africa to Peru.
In addition to NTT Docomo and KDDI,
we extended carrier billing to SoftBank
customers shopping at Amazon Japan -
for physical and digital goods - meaning
even more customers can benefit from
frictionless, cashless payments in Amazon’s
fourth largest market by revenue.
Subscription services continued to grow
driven by a combination of increasing
consumer demand and studios launching
new direct to consumer packages. With a
shift in distribution strategy that sees new
releases going online concurrently with
movie theatre distribution, this growth is
set to continue. New streaming services
such as BritBox, OnDemand Media
(content for Chinese, Vietnamese and
Korean diaspora), EpicOn and DocuBay
joined the Bango circle to accelerate their
global growth.
2020 also saw the launch of new ways for
consumers to subscribe to these services,
as two top US brick-and-mortar retailers
selected Bango to help them bundle
streaming media subscriptions with both
physical goods (for example headphones
and smart speakers) and as a benefit of
their consumer loyalty programs.
The trend to deliver more customer value
through subscriptions extended to the
gaming market in 2020. Bango has been
selected by Microsoft to offer bundles of
the Game Pass Ultimate and All Access
products. This is an exciting expansion of
the Bango-Microsoft partnership, which
adds the Xbox games console to a cloud
gaming subscription providing both an
affordable option for consoles and an
unlimited games streaming service that
can be enjoyed both on consoles and 5G
devices.
This surge in streaming services has led to
telecoms providers moving to standardize
on a common platform for bundling 3rd
party services with their own broadband,
TV and mobile plans. We announced a
global telco platform deal in May valued
at over £1.5M across 3 years; later followed
the launch of BT bundles including BritBox
and Amazon Prime video through the
Bango Platform.
Data Monetization
2020 marked the first full year of trading
for Bango Marketplace. Bango segments
payment data based on what and how
often people purchase,
into Bango
Audiences. App developers can then
target their marketing campaigns at users
who are known to have actually paid
rather than relying on soft indicators such
as “searched for” or “liked” provided by
platforms such as Google and Facebook.
This first year saw a 10x increase in the
app developers engaged with Bango,
growing from 200 in January 2020 to over
2,000 by December. During this period
there was also a 20x increase in the total
number of days Bango Audiences were
used in marketing campaigns.
To broaden the distribution of Bango
Audiences, we
launched a partner
program in 2020. With 12 partners in
countries as diverse as US, France, Hong
Kong and Taiwan, the partner program
“Helios has a commitment to continuously invest into the African digital ecosystem,
to back the entrepreneurs and innovations that unlock the value of digital commerce
and financial inclusion across the continent. I am pleased to be working with Bango
to reinforce our commitment to this mission, bringing global reach and powerful
technology through the TPAY partnership.”
Babatunde Soyoye Managing Partner/Co-Founder, Helios Investment Partners LLP
7 provides additional sales and marketing
reach and allows smaller app developers
– who often outsource their marketing
budgets to agencies - to also benefit from
Bango Audiences.
Towards the end of 2020 we launched
tailored Bango Audiences. This new
feature uses advanced data intelligence
technology
to allow app developers
to benefit from very specific Bango
the particular
Audiences based on
app genre or title, providing even more
granular targeting with the promise of
even higher returns from their marketing
campaigns.
Outlook
Building on Bango accomplishments in
2020, the outlook for future growth in 2021
and beyond is clear and strong.
Continued growth in payments fuels the
ever-increasing demand for data insights,
and is best expressed by the formula:
More Users x More Routes x
More Merchants x More Insights
= Payment Data Growth
More Users: The restrictions due to
COVID-19 lockdowns have accelerated the
adoption of online commerce, creating
more users than ever before who are
buying and paying for goods online. Our
data shows these new users have made
a permanent switch to online commerce
meaning Bango enters 2021 with a greater
number of users than ever before, driving
future growth from a bigger user base.
More Routes: The routes launched in
2020, particularly large connections such
as SoftBank and Amazon in Japan (which
launched in June) will contribute to our
growth in 2021 with a full twelve months
of operation. Following the launch of
bundled subscriptions with the US-based
brick-and-mortar retailers in 2020, we
expect to launch similar services in new
vertical markets, for example with energy
providers. These new verticals greatly
expand the market opportunity for Bango.
The partnership with TPAY Mobile in the
Middle East, Africa and Turkey provides
a massive and instant expansion of the
footprint available
to Bango global
merchants and provides access to the rest
of the world for TPAYs regional merchants.
Together Bango and TPAY provide
the leading platform and unmatched
operational capability across this fast-
growing region.
More Merchants: New merchants that
joined the Bango circle in 2020 will deliver
revenue growth in 2021 and beyond as
they launch new routes. The recent launch
of Amazon’s Prime Video Mobile Edition
with Airtel in India is a great example of
how new services from existing merchants
can drive significant growth. Through the
Microsoft Xbox distribution partnership
won in 2020, Bango will launch several
Xbox subscription services in 2021 and
expect good growth from this high value,
long term subscription service.
More Insights: 2021 will see the expansion
and development of the data insight
innovations launched in 2020 with one
Japan already
additional carrier
launching our predictive authorization
algorithm
subscription
to maximize
renewals.
in
Put together, these four elements create a
rapidly growing source of payment data
that can be monetized through Bango
Marketplace. With the momentum built
in 2020 the opportunity for significant
Marketplace growth is exciting. Simply put:
More Data x More App Developers
x More Campaigns
= Data Monetization Growth
More Data: In addition to the data
from the payments business, more 3rd
party data will be used to build Bango
Audiences in 2021. With alternate sources
of data for app marketers reducing
because of changes such as Apple’s
removal of the automatic sharing of
marketing data, the demand for Bango
Audiences is set to grow.
More App Developers: We expect
continued growth from our organic app
developer sales. The newly launched
www.bango.ai portal provides self-serve
functionality, reducing the sales effort and
increasing scalability. The channel partner
program will continue to grow and we
expect to see an increasing volume of
sales driven through the channel partners
we announced in 2020.
Visit Bango Investor online:
bango.com/investor
8 More Campaigns: With more options for
audience segmentation and the increased
adoption of our subscription pricing plans,
we expect existing customers to increase
their repeat use of Bango Audiences
further driving sales with minimal sales
effort.
These opportunities, which will drive
Bango’s continued growth have never
been greater, making execution key to
success. This is driven by four key pillars:
People
A talented and engaged team is critical
for success. With a record employee
engagement score in 2020, the focus
on employee engagement is continuous
improvement. With a combination of
new hires and internal promotions, the
leadership talent in Bango is stronger
than ever:
• Matt Garner
joined Bango as
CFO bringing a strong track record
in managing
global
technology businesses.
complex
•
•
Brett Orlanski joined to lead the
Marketplace Product and Sales
teams bringing market knowledge,
contacts and expertise having led
the marketing channel partnerships
team at user acquisition specialist
Bidalgo.
Jim Plimmer, who
joined Bango
in 2013, was promoted to have
responsibility
the Payments
Product and Sales teams. Jim has
been instrumental in the growth of
for
the subscription business in Bango.
NHN, TPAY, Evergent and Amazon Web
Services will be important to our growth.
Trust
For twenty years Bango has been at the
forefront of mobile commerce. Over this
period we have forged longstanding
relationships with some of the world’s
largest
These
relationships are built on trust. Trust that
we will help them grow and trust that we
will execute and support them as Bango
plays an increasingly critical role in their
success.
companies.
internet
We are extremely excited by the future
growth opportunities as we progress
towards our 2025 vision of becoming the
technology behind every payment choice.
Paul Larbey
Chief Executive Officer
• Maria
having
Vidondo,
held
numerous leadership roles in her 8
years at Bango, has taken on the role
of VP Partnerships, to help Bango
grow through strategic partnerships.
• Wayne Griffiths joined to evolve and
lead the Engineering and Delivery
team having previously led large
global sales, services and technical
teams in Velocix, Nokia and Alcatel-
Lucent.
•
Lisa Huxley joined Bango to lead
having
account management
had senior roles in large global
organizations such as Virgin Media
and Nokia.
Innovation
“Innovative” is one of the Bango THRIVE
values and is core to our continued
growth. From the technology innovations
that help partners attract more users to
the use of new cloud technology and
services
the exponential
growth in the volume of transactions at
zero incremental cost, technology has
never played a more important role. The
opportunity to help our partners grow
using innovative cloud and AI solutions is
exciting.
to manage
Partnerships
“Join the Bango circle and Thrive” is
much more than a marketing slogan; it
defines our approach to growth through
partnerships. In 2020 new or strengthened
relationships with companies such as
“Bango and TPAY MOBILE share a desire to push forward the
frontiers of online commerce. Through collaboration we are
making a real impact in the era of platform economy. There is
a huge opportunity to unlock the potential of online commerce
across the Middle East, Africa and Turkey, and to take innovations
from this region to a global audience.”
Sahar Salama, CEO of TPAY MOBILE
9 Strategy for growth
Online spending totalled $1.2 Trillion in 2020, of which $160B was spent in app stores and on streaming services. Bango Payments is
driving the growth of the alternative payments market, which accounted for $24B of the spend. By 2024 analysts estimate app store and
streaming spend will grow to $200B and the share of alternative payments to $40B (TechNavio, 2020). Bango expects to increase our
share of this growing market, complemented by continued growth in EUS from physical goods, through our partnerships with Amazon
and other merchants.
The foundations for continued Payments growth
X
X
X
=
Online commerce
acceleration
More
users
Market
expansion
More
routes
Growth in
subscriptions
More
merchants
Platform
standardization
More
insights
More
payment data
Growth in the Bango payments business is fuelled by several factors. Underlying market growth causes an “organic” increase in the value
of end user spend processed over time. Existing Bango customers launch additional services that drive more consumer spending through
the Bango platform. Bango adds new payment routes and new payment methods, that help our customers acquire more paying users.
And, uniquely, Bango applies data insights used by merchants to acquire more paying users, which drives up the volume of payments
processed.
The Bango Marketplace business has value across the online advertising market. App developers alone spent $80B in 2020, and
approximately $1B targeting specific users. By 2024 it is expected that marketing spend from app and streaming media players will have
risen to at least $120B and spending by marketers on ad targeting to $2B. From start-up in 2020, Bango expects to deliver revenue growth
from Bango Audiences at a higher rate than the overall growth in ad targeting spend, as marketers focus increasingly on the financial
returns from their ad campaigns. Our growth will come from the growing application of payment insights by more app developers in
more campaigns.
The foundations for continued Marketplace growth
X
X
=
Growing
EUS
Channels
and direct sales
Data driven
differentiation
More
payment data
More
app developers
More
campaigns
More
paying users
To maintain high rates of growth, Bango focuses on:
1. Winning more payment relationships which builds EUS at >95% margin and generates audience data.
2.
Increasing the number of audiences on the Marketplace platform.
3. Attracting more app developers onto the platform to increase usage of Bango Audiences.
4.
Investing in Marketplace through R&D to further develop the technology, plus people and partnerships to market and sell the
proposition.
5. Deploying cash generated from operations to fund future growth.
10 Sustainability and Section 172
Bango approaches sustainability and
social responsibility from a pragmatic
standpoint. The Bango ESG focus is
not viewed as a separate exercise to
be “completed”, but as a core part of
the Bango strategy and integrated into
work life and management processes.
Through this integrated approach, Bango
ensures every area of the business delivers
sustainable benefits for our customers,
employees and investors.
The four major areas of focus for Bango’s
sustainability plan are:-
•
•
•
Protecting the environment
Employee engagement, diversity and
inclusion
Data security
• Governance
Protecting the environment
Bango is committed to reducing the
environmental impact of its business and
encouraging our partners and investors to
take the same initiatives.
Bango has been certified as a carbon-
neutral business to the PAS 2060 standard
for the baseline period 1 January 2020 to
31 December 2020. The certification was
provided by Go Green Experts Ltd who
are an environmental consultancy. This is
an important milestone that many of the
largest technology companies have yet to
obtain.
Bango has offset emissions in 2020,
using Rimba Raya Biodiversity Reserve
Project, Indonesia forestry scheme with
321 Verified Carbon Units (VCUs) carbon
credits. Scope 1 & 2 emissions plus material
scope 3 emissions were considered within
the scope.
In 2021 Bango has a target to lower the
total of scope 1, 2 and material scope
3 emissions by at least 7%. Progress
will be reported to the Board regularly
throughout the year. For more details
please see the PAS 2060 Qualifying
Explanatory Statement which contains
to Bango’s
pertaining
information
carbon neutrality - https://bango.com/
investor/environmental-corporate-social-
responsibility-and-governance-policies/
To reduce waste, Bango is introducing
paperless systems. All Bango employees
are provided with reusable, personalized
and Bango branded hot and cold drinks
bottles and coffee cups, eliminating the
demand for disposable vessels.
During 2021, Bango will make a
further drive to encourage 100% of
Bango investors to switch to paperless
communications. Bango already provides
the majority of
shareholders with
electronic communications – including
statutory notices – and with digital
reports, such as this Annual Report. We
will encourage those remaining investors
that receive paper to switch to digital
only. Any investor that wishes to continue
receiving printed paper through the post
will be invited to make a small donation
to cover production and mailing costs and
contribute to carbon offset.
to
Bango adopted an electric car scheme
so that employees can secure competitive
replace vehicles using
financing
carbon-based fuels with electric vehicles.
This operates alongside a longstanding
initiative to encourage bicycle and e-Bike
usage.
Employee engagement,
diversity and inclusion
Bango is a special place to work. The
THRIVE values set high standards for
everyone at Bango to hold themselves
to. Each year employee engagement is
measured against each of the THRIVE
values. In 2020 Bango recorded its highest
engagement score and biggest year on
year increase, with an overall score of 78%.
The process is administered by Unicus; a
highly respected leadership development
organization who work with some of the
UK’s leading companies.
11 Commenting on employee engagement at
Bango, Ian Palfreyman, Unicus CEO, said:
“Bango’s Employee Engagement score
reached a company record high in 2020
at 78%. This represents the biggest single
annual increase of 7% since the survey was
launched in 2013. The leadership team is
committed to continuously improving the
culture, workplace, and opportunities for
its people, to ensure working at Bango is
a place where people can Thrive. Bango
the overall
significantly outperforms
tech sector score of 69%. A culture of
openness and transparency, a
belief in the power of diversity,
promoting self-sufficiency and
a wide variety of development
opportunities are seen as the
key drivers for engagement in
the sector. The 2020 score is
one the whole company can
be proud of”.
Even such a high score provides
opportunity for improvement.
Actions coming out of the
Engagement Survey are closely
monitored by the Head of
People and the CEO, and the
Bango Board is presented with
a detailed update twice a year
on engagement measurement
and actions.
Bango is a highly enjoyable
business
for and
to work
attracts talent in all areas.
Bango is equally proud of the
long-term commitment many employees
make to the business. In 2020, Bango
introduced employee long service awards
to recognize people who have dedicated
many years to the success of Bango. A
total of 20 x “5 year”, 4 x “15 year” and 2
x “20 year” awards were made, with each
employee presented with a special edition
Bango hoodie.
Happy
The past 12 months have been most
unusual, with
restrictions
dramatically
the working
changing
environment however, across Bango the
focus on communication, support and
social interaction has been constant.
lockdown
Bango has always endorsed a flexible
working culture. During lockdowns Bango
managers exercised this flexibility with
their teams, so that home schooling
commitments could be met, and single
person households could socially interact
with colleagues, friends and family during
the working week. Weekly events that
stimulate social interactions have been
delivered
incredible
social environment Bango is known for.
In addition to the virtual events, gifts
including a Fortnum & Mason Christmas
to maintain
the
care of their health and wellbeing –
mental and physical – when working.
As people moved to working from home,
Bango has provided ergonomically
efficient chairs, desks, lights, monitors,
webcams etc. and provided expert 3rd
party advice on productive working
patterns and routines. Everything that
people need to allow them to work safely
and productively from home is offered by
Bango.
In
The additional pressures of
lockdown impacted everyone
differently.
line with the
Bango
value,
“Expressive”
created a broad range of
support “tools” that people can
use. These include: -
Additional
•
flexible
Bendi-time to help with the
challenges of home schooling.
running
A
friendly
club
•
where
competition
encourages everyone to get
outside and enjoy fresh air on
a run or a walk.
Weekly
lockdown
•
challenge
encouraging
everyone at Bango to step
away from their desk for yoga,
meditation or to start a new
hobby.
Hamper and surprise packages were
sent to home addresses, recognizing the
importance of people to the success of
Bango.
In January 2020, before the world shut
down, Bango was 20 years old. The 20
year anniversary was celebrated with a
Mad Hatter’s Tea party themed carnival
extravaganza. This turned out to be the
last time all employees would be able
to celebrate together in person in 2020,
making it even more memorable.
•
•
•
the
Promotion
employee support facility so everyone
knows help is close by if needed.
of
their
teams
Training for people managers on
supporting
through
remote working including training
aimed to raise awareness of people
presenting signs of mental health
challenges.
Planning post-lockdown events that
we can all look forward to in the
coming year
Wellbeing
Bango employees dedicate a significant
proportion of their time to Bango, which
means people need to be able to take
Giving back
Bango recognizes that the local community
is a key part of the infrastructure that
12 enables us to succeed. Bango supports
the communities in which we work through
a variety of means. Rather than select one
charity, Bango supports employees to
raise money for a range of charities that
are important to them, matching personal
donations raised.
is
committed
In 2021 Bango
to
encouraging its people to do more work
with the charities of their choice, and is
aiming to increase this matched funding
program by 5x.
Learning & Development
Bango designs development paths
to support the individual through a
combination of digital-learning formats
and in-person sessions. While L&D in
the classroom still has immense value,
COVID-19 has pushed Bango to find new
creative ways of learning away from in
person settings. Despite lockdown, the
Bango Buddy scheme has remained in
place for new employees to have a “go
to” person that will help them get up to
speed quickly, find anything they want to
know and get the most from their life at
Bango.
Diversity & Inclusion
Expressive - We value difference, and we
value choice as part of our day to day
working. We embrace difference and
focus on talent that everyone at Bango
possesses.
With Expressive as a core THRIVE value,
diversity is at the heart of the Bango
culture. Bango believes that equality,
diversity, and inclusion are three vital
ingredients for a thriving, vibrant company.
All Bango employees are encouraged to
spend a few days visiting and working
from regional offices if they can, to better
understand the workplace and social
cultures of the countries from which we
operate.
With people from 18 different countries
and 52% of managers and leaders
identifying as non-male, Bango benefits
from different backgrounds, perspectives,
and talents. Bango is a global company
whose technology benefits hundreds of
millions of people around the world, and
we want to reflect that in the make-up of
our workforce, partners and stakeholders.
Data security
Data security is core to the Bango
Platform and services, and a key element
underpinning the trust our partners and
customers place in us. In 2020, there were
no reported data breaches.
Bango applies appropriate data labeling,
encryption and segregation to all app
store, operator and other third-party
data. All confidential data (Bango secret
data) is stored encrypted and is only
accessible with appropriate
security
granted permissions governed through
strict Bango access control using Role
Based Access multi factor authentication.
The Bango Platform Operations Centre
ensures the integrity and security of
encryption keys with role-based access
control and privileges verified at least
annually.
Bango employs network protection as
required by each partner and all data in
transit is encrypted. Bango never stores
or transports data on portable media.
Core platform data and all associated
payment and transactional data relating
to app stores, operators and other third
parties is never available outside of
Bango datacenters. It is never copied to
staff hardware, such as laptops, tablets or
smartphones.
During 2020 Bango migrated to a new
corporate platform providing best in class
security, with comprehensive protection
that meets National Cyber Security
best practices, with added protection
from Microsoft’s Enterprise Mobility and
Security suite.
Bango operates in-line with the ISO27001
standard using equivalent controls and
is also informed by other standards
and best practice guidance where
appropriate including ISO27002, ISO29147,
Cloud Controls Matrix (CCM), OWASP
and Centre for Internet Security (CIS)
benchmarks. Bango aims to secure
formal ISO27001 certification in 2021.
tests alongside
Bango commissions regular third-party
penetration
routine
vulnerability testing. All generated alerts
are categorized based on business risk
and dealt with by our 24x7 operations team.
There are mandatory security training
programmes
in place depending on
employee role within the business. Bango
achieved 100% against this objective.
Governance
Continuous measurement and reporting
are key to continuous improvement. In
each of the areas described above regular
measures and reports are provided to
the Board in the monthly management
packs. These reports clearly document the
actions being taken to improve and are
visible not only to the Board to across the
entire company. How the Board uses this
data and the structure around corporate
governance is described in the Corporate
Governance Report on page 28 and in
the Section 172 statement.
“I feel extremely lucky that Bango matches
whatever I raise for charity. I raised over £900 for
the Blue Cross including Bango’s contribution. It
has been nice knowing the company I work for
is supporting the charities I value”.
Neena Patel, Digital Campaign Strategist at Bango
13 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 various needs and priorities of
Bango, our customers, partners, employees
and other stakeholders.
The Board adopts and reports to the QCA
Corporate Governance Code to further
support 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:
https://bango.com/investor/aim-rule-26/.
Bango works with the global leaders of
the technology and telecoms industries.
Accordingly, the highest 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 Bango 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.
Examples of how Section 172 factors have
been considered by the Board in 2020
include:
•
•
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.
•
to divest
Decision
Customer Data Platform
business was
the Audiens
(CDP)
to provide
taken
additional
allowing
investment
the growth of the business to be
accelerated. The creation of a JV
(NewDeep) in which Bango retained
a 40% stake, with South Korea’s
NHN having a 60% stake, provided
an opportunity for Shareholders to
benefit from the long term growth
while allowing Bango management
to focus on the Payments and Data
Monetization business. The JV also
provided the best mechanism for
Audiens employees to retain some
connection with Bango as
the
transition occurred.
Decision to partner with TPAY mobile
for expansion into the Middle East,
Africa and Turkey was taken as it
provided the fastest possible way
for Bango merchants to capture new
customers and payment methods,
and leverages Bango technology in
markets that are more expensive to
enter remotely.
The key stakeholder groups considered by the Board in decisions are:
Customers
Bango customers and partners are diverse. Large global merchants connect to the Bango Platform to reach new customers, and payment
providers connect to offer a broader range of services to their customers. Bango Marketplace gives marketing teams in large and smaller
companies the ability to target their marketing campaigns based on purchase behavior, to gain a higher ROI. In all cases our focus is to help
our customers grow, which inevitably means Bango grows.
Communication:
•
•
•
•
•
Monthly/quarterly business reviews are held with all major customers
The Bango Dashboard provides a real-time view in to the Bango Platform
Bango Boost provides quarterly reports to all payment providers and merchants with actions and results to further increase the EUS
over the route.
For Bango Marketplace, monthly data supply revenue reports are provided to all data suppliers.
Support tickets provide an audited track of all customer communications for both outbound and inbound support requests.
• Newsletters and social media provide a regular mechanism for updating customers on the latest developments in Bango.
Measures:
•
•
•
The ultimate measure is the End User Spend per customer. Good growth across all major merchants in 2020 saw total EUS rise to almost
£2B.
Support and performance key performance indicators (KPI) are reported quarterly to the Board
Customer performance reports are reviewed quarterly, with issues and improvement actions reported to and tracked by the Board.
Employees
People are the heart of Bango and are critical to its success. The Bango values spell out the high standards we hold ourselves to that make
Bango such a special place to work. A company-wide share option scheme means that all employees feel connected to, and benefit from,
the growth of the company.
14 Communication:
• Monthly all staff meetings provide a regular engagement point to discuss the progress across Bango. With COVID-19 these have
moved to be 100% virtual but remain a key forum for new starters to meet the wider team and for people to raise questions.
•
•
All staff receive the monthly management pack that the Board receives. This is publicized and people are encouraged to read and
raise questions from the report.
Feedback forums in tools such as slack provide a more informal but rapid means of communication.
Measures:
•
•
•
Bango conducts an annual engagement survey. For more details see the Sustainability section.
Ad hoc Bango “Circles” provide a more regular and informal measure of employee engagement. These are usually completed within
teams.
Staff retention and churn measures are tracked with all leavers and starters reported to the Board.
Shareholders
Bango shareholders play an important role in monitoring the performance of the company.
Communication:
•
•
•
•
In 2020 the bango.com/investor website was refreshed to provide easier access to the latest company information
Regular RNS Reach and social medial communications are used to communicate the latest developments.
Results videos have been used to support investor communication during lockdown and the AGM in May 2020 moved online. Regular
in person AGM and Strategy Days are expected to resume in 2021
investors@bango.com provides a simple way for all shareholders to raise questions with management. Common Q&A are posted on
the investor website.
Measures
•
•
All resolutions put to shareholders at the AGM in May 2019 passed with over 99.8% approval.
A consultancy was used to conduct an investor perception study with four large investors. This, along with the regular feedback
through Bango’s broker, helps inform the Board decisions.
Suppliers
Key suppliers to Bango have executive sponsors to ensure a close partnership exists in preference to a customer<->supplier relationship.
Communication:
•
•
Regular business reviews are held with strategic suppliers.
Clear escalation channels are in place for all suppliers providing for rapid resolution of any challenges.
Measures
•
•
Key actions and issues from supplier reviews are reported to the Board in the monthly management reports.
Regular security and process audits are carried out on critical suppliers when deemed necessary. Major non compliances are reported
to the Board.
Community and environment
Bango is committed to making a positive contribution to the communities within which we operate, including supporting the local community
and reducing our environmental impact and creating employment opportunities.
Communication:
•
•
Bango is an active member in Cambridge Network (www.cambridgenetwork.co.uk) this provides excellent opportunities for sharing of
information and best practice in the Cambridge area.
Charities benefit from fundraising as employees select their own charity to raise money for, and Bango matches all funds raised.
Measures
•
In 2020 Bango was certified as carbon-neutral, a scheme that will be extended to suppliers in 2021.
• Matched fundraising is measured and reported to the board. Bango aims to increase these funds raised year on year.
15 CFO’s statement
Bango continued to grow strongly during
FY2020, delivering a revenue increase of
70% and an adjusted EBITDA* up 16x.
Bango business model
Bango reports the revenue generated
transactions and
through payment
through the monetization of payment
data from these transactions as one
segment, which is the monetization of the
Bango Platform.
End User Spend (EUS)
EUS continues to be a significant Key
Performance Indicator that management
uses to measure the growth of the
business. EUS is the total value of
transactions processed by the Bango
Platform (excluding taxes). During 2020,
EUS grew 70% to £1.85B (2019: £1.09B).
Revenue and Costs of Sale
Total revenue from continuing operations
increased 70% to £12.17M (2019: £7.17M).
This includes non-transactional payments
software, platform &
(licensing of
technology) and
totaling
£2.78M, which are additional ways to
monetize the Bango Platform.
integration
Bango earns revenue from payment
transactions processed by the Bango
Platform, from platform and software
licenses and from the data insights sold
as Bango Audiences in Marketplace. Fees,
such as integration fees, are recognized
on completion of contractual milestones.
With cost of sales at £0.34M, Gross margin
was 97.2% of revenue in 2020 down from
99.0% in 2019. This reduction reflects the
additional cost of sales from the Bango
Audiences business and some integration
fee costs from the payments business.
expenditure of
Operating
continuing operations
Bango group operating costs increased
to £7.27M, (2019: £6.83M) reflecting the
increased investment in the business,
which was partially offset by some
COVID-19 related savings in travel and site
costs of £0.47M.
Bango Group Adjusted 2020 EBITDA*
for continuing operations was £4.56M,
(2019**: £0.28M) reflecting the benefit from
increased revenues without an associated
increase in fixed costs.
The share-based payment charge for
2020 was £0.81M (2019: £0.81M) calculated
using the Black-Scholes-Merton model.
The share-based payments relate to
the Bango share option program that
enables all Bango employees to share in
the growth in value of Bango. It is a vital
recruitment and retention tool in a highly
competitive employment market.
intangible assets
in
Amortization of
2020 was £2.25M (2019: £1.47M**) as
R&D projects capitalized in prior years
were deployed. In addition, there was
an increase in amortization arising from
the £5.39M acquired intangible software
retained in the group following the
creation of the joint venture with NHN.
Joint venture with NHN Corp
On 6 April 2020, Bango completed a Joint
Venture with NHN Corp, a South Korean
data and payments company. NHN
invested $8M for a 60% shareholding
in Bango Deep Limited - the holding
company of Audiens SRL and Audiens
Limited (renamed NewDeep Limited in
May 2020) - with Bango retaining 40%.
In addition, NHN injected its data science
know-how to accelerate the Audiens data
business.
combined
continuing
The
and
discontinued operations reported revenue
of £12.35M in 2020, excluding the revenue
of the associate and including £0.18M of
revenue from discontinued operations
prior to creation of the Joint Venture.
The 40% interest held by Bango has
been accounted for as an associate.
The interest in the associate has been
determined by measuring the fair value
16 Going concern
The combination of strong operating
cash flow and revenue growth supports
the Directors view that the Group has
sufficient funds available to meet its
foreseeable working capital requirements.
These requirements support the planned
investments to grow marketing and sales,
and to develop new products.
The Directors have taken into account the
wider macro-economic effects, including
foreign exchange and
rate
fluctuations, and have concluded that the
going concern basis remains appropriate.
interest
Matt Garner
Chief Financial Officer
*Adjusted EBITDA is earnings before interest,
tax, depreciation, amortization, share based
payment charge and exceptional items
** 2019 adjusted to consider only continuing
operations
as a proportion of the value invested
in NewDeep
the acquired
including
intangible assets and proprietary software
retained by Bango. A gain of £4.08M (net
of transactional costs) resulted from the
sale of the 60% as detailed in note 16.
In 2020 Bango incurred, and separately
disclosed, items totaling £0.77M that are
considered non-recurring and exceptional.
These comprise non-recurring legal and
advisor fees, and other expenses related
to the divestment of Bango Deep Limited
into the Joint Venture with NHN Corp.
The 2019 consolidated income statement
has been restated to include the impact of
operations now classified as discontinued
(see note 16) as a result of the NewDeep
JV with NHN.
Profit and earnings per share
The total comprehensive income after tax
was £4.90M (2019: loss £2.42M) including
the profit on the disposal of 60% of
Bango’s shareholding in in Bango Deep
Limited. Profit from continuing operations
(excluding the share of net loss from the
associate of £0.53M) was £1.27M (2019:
loss £2.16M).
discontinued
Basic earnings per share from continuing
operations was
and
6.37p (2019: loss 3.32p) whilst diluted
earnings per share from continuing and
discontinued operations was 6.29p (2019:
loss 3.32p).
Considering only continuing operations
the basic earnings per share was 1.01p
(2019: loss 3.07p) and diluted earnings per
share was 1.00p (2019: loss 3.07p).
Statement of financial position
Net assets at 31 December 2020 were
£24.09M (31 December 2019: £14.70M)
driven by the fair value of interest retained
in the NewDeep JV (£5.69M) and an
increase in cash.
Cash
Cash balance at 31 December 2020
increased by £3.15M to £5.84M (2019:
from
£2.69M). Net cash generated
operations was £3.01M. In addition, Bango
received £3.19M from NHN’s investment in
newly issued shares of Bango plc.
Intangible assets
Intangible assets of £12.07M (2019: £12.20M)
include goodwill as well as internally
developed capitalized R&D. Intangible
assets relating to capitalized internal R&D
increased to £14.24M from £13.56M in 2019,
following further investment in the Bango
Platform and Bango Marketplace. The net
value of internally developed capitalized
R&D decreased to £5.91M from £6.57M in
2019 following the Bango Deep disposal
and as more previously capitalized R&D
projects were deployed
in the year
generating amortization costs. Internally
generated R&D is amortized over 5 to 8
years with projects assessed in relation to
their individual cash generation ability.
Liabilities
Total borrowings at 31 December 2020
were £0.15M (2019: £1.05M) consisting of
Right of Use lease liabilities.
Visit Bango Investor online: bango.com/investor
17 Principal risks and uncertainties
risk management
Financial
objectives and policies
Risks and uncertainties are scrutinized
and monitored by the Board continuously.
The Board is supported in this task by
the Bango senior legal counsel, solicitors,
auditors and insurance brokers.
Risks are 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 monthly Board meetings are the
main forum for the discussion of risk by
the Bango Board. Management reports,
delivered to the Board in advance of each
meeting, form the basis reviewing 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.
Bango has a formal risk management
policy and risk register which are actively
maintained and available to any Bango
employee to report on or review.
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 by the
Board to the Bango leadership team and
key management personnel.
following
identified
Bango has
financial and operational risks to which it
is exposed through its business activities.
the
Liquidity risk and going concern
Bango ensures sufficient
is
available to meet foreseeable needs and
invests in cash assets safely and profitably.
See note 22 for further information. Due to
the nature of the Bango business – built
liquidity
on long term relationships with Telcos
and global merchants - Bango does not
have significant issues with bad debt and
therefore the impact on liquidity is low.
The Board reviews a detailed cash flow
forecast every month 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.
Business interruption due to
technology failure
Bango has customers across all continents.
These customers expect 24/7 access
to Bango customer operations and for
service level agreements (SLAs) to be met.
Bango makes significant and carefully
considered investment in technology to
ensure maximum uptime, resilience and
robustness of services.
Software licensing
Bango use 3rd party software tools and
systems from a variety of suppliers. These
are normally restricted in use with user,
capacity or enterprise software licenses.
Controls for the introduction of a new tool
along with procedures for granting users
access ensure Bango remain within the
licensing conditions.
skills. Bango puts
Employee retention
Bango depends on its ability to recruit and
retain people with the right experience
and
significant
effort
into providing an excellent
working environment and benefits (see
Sustainability section), including a highly
attractive share option scheme available
to all employees (note 7).
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 potential currency
risk, partly mitigated by sales and costs in
the same country being largely offset and
due to the natural hedge from conducting
business in so many different currencies.
As the cost of sales is extremely low there
is no risk to the profitability level of any
contract due to currency fluctuations. See
note 23 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. Further detail can be found
in the Sustainability section.
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. Bango
has implemented policies, systems and
procedures which address privacy risks in
accordance with widely adopted industry
practices. The extensive testing of Bango
systems by our major partners as part
of ongoing supplier monitoring, gives
assurance that this risk is appropriately
mitigated. A data breach register is
maintained and kept up to date. Further
detail can be found in the Sustainability
section.
18 pace with
Technology risk
Bango is dependent on its technology
developments
keeping
in
internet, marketing 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 managed.
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.
Bango Marketplace further diversifies
the customer base with app developers
joining the payment providers and global
merchants inside the Bango circle.
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.
Extreme dominance of the market by one
EU related uncertainty
Bango leadership carefully monitors the
impact of the UK exiting the EU. To date
there has been no impact to the business.
The benefits and drawbacks of having
exited the EU and the new trade deals that
will be signed are continually evaluated
but are expected to be manageable or
insignificant.
COVID-19
While there is uncertainty about how
long countries will be required to deviate
from “business as usual” as a result of
COVID-19, no negative impacts to the
Bango business have been identified so
far. Bango has always supported flexible
working patterns and therefore adapted
to lockdown conditions with little difficulty.
Bango technology helps the acceleration
of online commerce that has resulted from
lockdowns.
Paul Larbey
CEO
KPIs
End User Spend (EUS)
EUS is the total value of payments
processed by
the Bango Platform.
This metric is not only a measure of
the payments processed,
is also
the volume of
a measurement of
monetizable payment data.
it
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 removing
barriers to future growth.
Revenue
Bango reports revenue from the Bango
Platform as one segment. This includes all
revenue from the payments business and
the data monetization business. Revenue
is recognized as described in note 3.12 of
the financial statements.
Cash
The Bango Board reviews a cash forecast
on a regular basis to ensure that Bango
has sufficient cash to reinvest in research
and development
future
growth.
to support
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 allowing
money to be re-invested in R&D and
sales & marketing.
Bango Marketplace
Two additional, non-financial KPIs are
used specifically to track the progress
of Bango Marketplace. These are the
number of app developers engaged and
the Bango Audience Days (BAD). BAD
is a measure of the number of days in
a month that audiences were shared
across all app developers when totaled.
forecasts
Other non-financial KPIs
These are monitored monthly by the
Board and key management, and
include business
from key
partners, sales pipelines for new route
activations & merchant onboarding,
app developer audience sales pipelines,
employee
carbon
engagement. All these indicators align
towards growing market share and EUS.
emissions
and
19 at least 12 months earlier than otherwise
possible. The Bango Marketplace business
– key to the Virtuous Circle strategy –
remains wholly owned by Bango, with all
necessary IP owned by Bango.
The future strategy of NewDeep is to
accelerate its growth as it addresses a
larger global market opportunity. NHN will
provide additional resources including its
advanced deep data capabilities. In less
than a year, new technology injected into
Audiens has augmented its capabilities,
and it is now able to plug in directly to
over 400,000 Shopify powered websites
and automatically generate marketing
recipes that will drive customer growth.
From this solid foundation and with NHN’s
support, we expect NewDeep to show
rapid growth.
NHN JV
“NHN is delighted to be partnering with Bango to drive new
innovations in purchase behavior targeting. Bango has a strong
desire to apply our proven AI technology and data science to
benefit Bango merchants and partners, and we are eager to
support that quest.” - Jinsoo Lee, CEO NHN ACE
share into the future. In addition, NHN
injected data science technology and
knowhow into this exciting venture to
accelerate its business globally.
The Audiens CDP business was acquired
in 2018 to gain access to innovative
technology that helped Bango speed up
the development of Bango Marketplace.
As a result, Bango was able to rapidly
introduce its data monetization product
NHN is a large South Korean internet
infrastructure company. With businesses
spanning payments, games, content,
ticketing, IoT and streaming services, NHN
has a deep level of expertise in payments
and analytics in South Korea.
In April 2020, building on a data
monetization partnership announced
with NHN’s ACE division in 2019, Bango
entered into a strategic partnership with
NHN Corp.
Bango will benefit from NHN’s experience
and knowhow in AI and Machine Learning
as applied to payments and marketing,
and NHN’s commercial strength and
resources in South Korea and Japan.
NHN sees benefits from working with
Bango to support the global monetization
of payment data insights and expansion
outside South Korea, and will work closely
with Bango as it plans for growth outside
South Korea, especially in Europe and
USA.
NHN took a 4.7% direct stake in Bango
and has subsequently increased its stake
to 6.9% by buying shares on the open
market.
NHN also invested £6.5M into Bango
Deep, the Bango subsidiary that owned
the Audiens Customer Data Platform
(CDP). This investment gave NHN a 60%
stake in Bango Deep, now renamed
NewDeep, with Bango carrying a 40%
20 Technology and innovations
Data science
Brands are wasting millions of dollars on campaigns that can only be measured with
opaque metrics. Consumers are hit with ads that are of no interest to them. Marketing
only proves its worth when someone pays for your product or service. When you know
who buys, your targeting becomes valuable. Purchase behavior targeting is the ultimate
marketing tool.
Bango Audiences are a revolution in marketing. Built on Bango Payment technology,
Bango analyzes who spends their money on what and enables marketers to target based
on these purchase behavior insights, providing an innovative new approach based on
advanced technology and improved approaches to protecting user privacy.
“Seeing the potency of
Bango Audiences, Nexon
continues to adopt the
Bango Audience model to
our major titles’ UA.”
Mr Lee WooChang Team
Manager UA Department at
Nexon
Working with Amazon
Bango was an early adopter of Amazon Web Services (AWS). In 2012, the Bango Platform added innovative DNS routing systems
to route transactions to Amazon Regions to prevent data loss during exceptional peaks in traffic. As AWS added capabilities
needed by Bango, use of the cloud increased as a way to deliver parts of the Bango platform alongside Bango data-centers.
Bango embraces “continuous delivery”, making technology decisions that enable rapid scaling and innovation. Speed to market
is vital for merchant and Telco partners. A decision was taken in 2018 to move to a “cloud-first” model, shifting the heart of the
Bango Platform to the Cloud, and dealing with challenges of regional financial and date regulations in new ways to enable
the shift.
Working with experts at Amazon, Bango was able to leverage the transition to AWS cloud infrastructure to further accelerate
the deployment of new routes and features. Adapters between the Bango Platform and payment wallets or reseller partner
systems were deployed into the AWS cloud, into one of 24 AWS geographic regions. Whether a tool is developed inside Bango
or by a partner outside, it can now be managed by the Bango Platform team to deliver higher levels of service for everybody.
Bango Boost+
Growing the number of customers that activate and use Direct Carrier Billing (DCB), is a
powerful way for Telcos to capture more value from the consumption of “OTT” content and
services, for example from app stores.
Bango Boost+ uses powerful data insights to target customer segments most likely to
take-up a promo offer, for example “interested” customers (window shoppers) vs.“actual”
customers. It optimizes customer communication methods so the customers it identifies as
having the highest probability of converting are reached with the right message, at the
right time. These are just two of the powerful ways Bango technology drives acquisition,
retention and revenue growth for Bango partners.
“The success we have experienced
with the latest Bango technology
is significant, we are excited to
apply this technology to activate
and grow new audiences for our
mobile commerce offerings.”
Baseil Zaki, Head of VAS, Devices
& Loyalty, du Consumer Services
21 “Bango
technology has
ensured that our customers
can enjoy a simple and
successful way to buy on
Amazon.co.jp” said Toshiaki
Hirata,
Director,
Board
Senior Vice President & CSO,
SB Payment Service Corp.,
a subsidiary of SoftBank
Corp. “We look forward to
benefiting from Bango data
insights to accelerate the
growth of our new business”.
Subscriptions – Predictive Authorization
Technology
Key to a successful subscription product is making sure consumers enjoy a seamless
experience throughout the lifetime of their service.
For most consumers, payment behavior follows a regular pattern. We are paid on the
same day each month, our bills go out on the same days. This means the payment cycle
can be a challenge for subscription relationships if the renewal coincides with a monthly
low point in funds on the customer’s account, or the customer’s payment method exceeds
a spending limit at the time of renewal. This can lead to a loss of customers.
Bango innovation has solved this problem, by applying data insights from a unique data
pool across a wide range of subscription models, covering over 20 million + people.
With Bango’s powerful machine learning technology, merchants can apply prediction of
spending patterns to maximize revenues.
Innovative Bango Predictive Authorization TechnologyTM analyzes customers that regularly
pay for subscriptions, and predicts the best time to renew the subscription. Merchants use
this technology to maximize the percentage of customers that can enjoy their subscriptions
each month.
Unified, standardized solution
The Bango API provides an “integrate once” capability that enables Telcos to enhance the content ecosystem available to their
customers, rapidly and at scale so they can enjoy greater freedom and flexibility in the range and way they consume content.
The opportunities available to Telcos standardizing on the Bango Platform encompass world class content and subscription
services from the leading online stores including Google Play, Amazon, Xbox, Spotify and more.
Essential features powered by Bango enable accurate offer targeting, simple activation of offers by customers, management
of customer entitlements during offer periods, and one-click billing when customers choose to continue enjoying these services
at the end of the offer period. Crucially, the Bango Platform enables Telcos to offer multiple third-party product bundles, and
bundles combining first and third party products. Bango provides powerful data insights to ensure the most attractive offers
are presented to each selected customer segment, all through one common platform.
22 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.
“
With more users making payments
across more merchants and in
more countries, Bango generated
a significantly larger pool of
payment data during 2020. We are
excited about how our technology
and data insights will continue
to drive high growth in the years
ahead.
“
“
The power and simplicity of the
virtuous circle strategy is leading
to partnership opportunities
around the world. I look forward
to applying my global trading
experience to capitalize on these
opportunities, while maintaining
simplicity and efficiency in Bango
operations as revenues scale up.
“
Matt Garner - Chief Financial Officer
Matt leads the finance team and has responsibility for ensuring robust financial systems
and controls are in place to underpin Bango’s growth. Supporting the development of our
partners, Matt is responsible for mid and long term strategic financial planning and has
a wealth of international experience managing hi-tech businesses. Previously at Global
Invacom Group Limited, a manufacturer and designer of satellite ground equipment, Matt
led the successful IPO of the business on AIM and the continuing listing on the mainboard
in Singapore, a world first dual listing. He also drove the acquisition and integration of
five companies across the globe. Prior to Global Invacom, he was in financial leadership
roles at the Amphenol Corporation and at Simrad, part of the Kongsberg Group, where
he also served as a director for local entities. Holding an Honours degree in Law from the
University of Liverpool, Matt has been certified as an Associate Chartered Management
Accountant since 1996.
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.
“
The strategic partnership with NHN in
South Korea brings Bango significant
technological advantage and has already
started bearing fruit for Bango customers
across the globe. In parallel, the TPAY
partnership opens the door to accelerated
growth in Africa. The skills and energy
of the Bango team, combined with the
diverse talents of our partners, are driving
real growth for our customers worldwide.
“
“
The payment insights Bango
can derive from a wide range of
wallets, carrier billing and bundling
partnerships helps our customers
grow in ways that are otherwise
impossible without
Bango
technology.
“
Anil Malhotra - Chief Marketing Officer
Anil is responsible for Bango’s marketing activities and strategic partnerships, including
device makers, app store providers and global network operators. Anil has extensive
experience of creating successful partnerships between technology innovators and
major market players in online technologies and OEMs. Before co-founding Bango,
Anil developed the major partnerships for Cyberlife Technology, one of Europe’s leading
computer games technology developers, which resulted in the licensing of the company’s
‘artificial life’ technology by the world’s leading games publishers including Warner and
Hasbro. Before that he worked with Bango Exec Chair Ray Anderson to establish a
technology called X.desktop, which became the global standard for the user interface
software on networked computers.
23 Nancy Cruickshank - Non-Executive Director
Nancy is a serial technology entrepreneur & NED. She presently leads a Digital Business
Transformation programme at Carlsberg group, as a member of its Executive team. Her
last startup, MyShowcase, was named by the Sunday Times as one of the 15 fastest-
growing start-ups in the UK in 2016. The business was acquired by Miroma Group
in Feb 2018. Nancy is also a NED at Flutter PLC (FTSE 100) and Allegro (eCommerce
marketplace, Poland’s largest listed business with a market cap of circa €20Bn), where
she is a member of the Nomination and Risk committees (Flutter) and the Audit and
Remuneration committees (Allegro). From 2012-16, Nancy was a NED at TelecityGroup
(FTSE 250), one of Europe’s most successful technologies companies, with data centres in
14 European markets. The business was sold to Equinix for £2.35bn in January 2016. Nancy
has worked in the digital industry for over 20 years, including launching Conde Nast online
in 1996, overseeing Telegraph Media Group’s Digital business and developing the Fashion
& Beauty market leader, Handbag.com between 2001- 2006, leading to a successful sale
to Hearst Corporation in 2006. Nancy lives in Copenhagen and London with her husband
and two teenage daughters.
“
The potential for Bango Audiences
is huge. Data is the new gold! The
early success with app developers
has got us off to a great start, and
the market opportunity is incredibly
exciting. We are starting to see
how this business can truly scale.
“
“
Now the Bango Platform has gained
global traction and is generating cash,
the data moat it generates provides a
big competitive barrier and opens up
several growth opportunities. As a NED
since 2016 I’ve assisted and supported a
huge evolution from mobile payments
to e-commerce with unique data-driven
insights. Today, I am focused on
supporting the Bango team as it invests to
fully realize the potential of its technology.
“
Gianluca D’Agostino - Non-Executive Director
Gianluca is an Entrepreneur and an Investor in the Digital space. 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 OnMobile Global Ltd
(listed in India) and seats 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 Independent and Non-Executive
Director
Sir Eric Peacock joined Bango as Senior Independent 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. Sir Eric has unique experience of
fast-growth businesses with broad experience in a range of CEO, Chair and NED roles
in public and private companies including Stage Technologies (sold to Tate Corporation
in USA), Achieve Global, Halo Intl., and Baybygro plc. He has a track record of growing
shareholder value during periods of rapid growth by creating cultures that result in
competitive advantage and customer service excellence. In addition to his experience in
financial services and expertise in corporate governance, Sir Eric has served in several
government bodies including UKTI (Board member), FCO (Board) and 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, Chairman
of Boxford Holdings 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.
“
Diversity and inclusion are essential
for a business to succeed long-
term. Bango encourages both
through its THRIVE values to build
an exceptional team and deliver
real advantages when we engage
with new customers and partners
around the world.
“
“
The Bango virtuous circle strategy
– powered by unique technology
implemented on
and data,
scalable software – is showing
benefits not only to our customers
but in financial performance and
cash generation that will power
future growth for Bango.
“
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, and TS Lombard. 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.
24 Company information
Company registration number
05386079
Registered office
Directors
Company Secretary
Bankers
Solicitors
Independent auditor
Nominated adviser and broker
Public relations advisor
US office
Japan office
100 Hills Road
Cambridge
CB2 1PH
R Anderson - Executive Chair
P Larbey – CEO
M Garner - 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
City House
126-130 Hills Road
Cambridge
CB2 1RE
Liberum Capital
Ropemaker Place, Level 12
25 Ropemaker Street
London
EC2Y 9LY
FTI Consulting
200 Aldersgate
Aldersgate Street
London
EC1A 4HD
675 N. First Street
Suite 1180
San Jose
California 95112
USA
Spline Aoyama Tokyu Building 6F,
3-1-3 Minami-Aoyama, Minato
Tokyo
107-0062
www.bango.com
25
Directors’ report
The Directors present the Annual Report and audited financial
statements of Bango PLC for the year ended 31 December
2020. 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 2020
6,608,725
R Anderson
28,297
P Larbey*
3,973,271
A Malhotra
-
C Rand**
19,500
G D’Agostino
N/A
M Garner***
N Cruickshank
16,858
F Bury 333,500
-
E Peacock
-
D Sear****
10,980,151
Ordinary shares
of 20p each
31 Dec 2019
6,593,725
N/A
3,973,271
-
19,500
N/A
-
308,500
-
-
10,894,996
*Paul Larbey was appointed as an Executive Director on 22 January 2020.
** Carolyn Rand resigned as a Director on 1 March 2021.
*** Matthew Garner was appointed as an Executive Director on 1 March 2021.
**** Non-Executive Director David Sear resigned on 22 January 2020.
Nancy Cruickshank, Frank Bury and Gianluca D’Agostino all
hold Bango shares but due to the size of their holdings, this is
deemed to not affect their independence as Non-Executive
Directors.
For Directors’ biographies and experiences see pages 23-24.
The Directors’ interests in share options of Bango were as
follows:
Options to buy ordinary shares of 20p each
Date of grant
R Anderson
17 September 2020
07 April 2020
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
17 September 2020
07 April 2020
01 October 2019
27 March 2019
03 January 2019
Total
Option price 31 Dec 2020 31 Dec 2019
£1.72
£1.22
£1.29
£0.93
£1.73
£1.73
£2.55
£1.15
£0.89
£0.43
£0.89
£1.72
£1.22
£1.29
£0.93
£0.90
50,000
50,000
50,000
50,000
50,000
50,000
50,000
50,000
50,000
50,000
32,500
532,500
50,000
50,000
50,000
50,000
100,000
300,000
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
A Malhotra
17 September 2020
07 April 2020
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
P Larbey
17 September 2020
07 April 2020
18 September 2019
27 March 2019
Total
£1.72
£1.22
£1.29
£0.93
£1.73
£1.73
£2.55
£1.15
£0.89
£0.43
£0.89
50,000
50,000
50,000
50,000
50,000
50,000
50,000
50,000
50,000
50,000
32,500
532,500
50,000
50,000
50,000
50,000
50,000
50,000
50,000
50,000
32,500
432,500
£1.72
£1.22
£1.38
£0.93
50,000
50,000
50,000
250,000
400,000
50,000
250,000
300,000
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
otherwise agreed by the Board or unless they are dismissed,
in which case they lapse immediately.
The total number of Director share options which were vested
but unexercised, and exercised in 2020 are:
Total
Options Held
Vested &
Unexercised at 31
Dec 2020
Exercised
in 2020
R Anderson 532,500
C Rand
300,000
A Malhotra 532,500
400,000
P Larbey
366,268
170,444
366,268
116,691
-
-
-
-
Share capital
Details of changes in the share capital of Bango during the
year are given in note 7 to the financial statements.
Dividends
The Directors have not recommended a dividend (31
December 2019: £nil).
Research and development
Bango has continued to invest in research and development
in the year. As a high growth technology company, the focus
is to develop unique technology that takes Bango forward as
the ubiquitous 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 2020 taking the platform
forward with enhancements such as adding advanced
subscription functionality to the Bango resale proposition and
applying data intelligence to subscription renewals. Further
26
Directors’ report
development was undertaken on new products including the
Bango Marketplace
(www.bango.ai), Resale and on
internal
additional Cloud capability. Details of
development work that has been capitalized in the year is in
Note 5.3.
the
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
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. The Sustainability
section provides a comprehensive statement on the Bango
THRIVE values, culture and employee engagement.
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
Bango had cash of £5.8M at 31 December 2020 (31 December
2019: £2.7M) and financing debt of £0.2M (31 December 2019:
£1.1M). Bango grew its EUS and revenue in 2020 in line with
prior year trends, and generated cash in 2020, mainly due to
the stable cost basis of the platform. The Board believes,
based on regular cashflow forecasts, that 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.
Substantial shareholdings
At 31 December 2020, 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:
Holder
Liontrust Asset Management LLP
Herald Investment Management
Hargreaves Lansdown Asset
Management
Odey Asset Management LLP
NHN Corporation
Stonehage Fleming Investment
Management Ltd
Interactive Investor Services Ltd
Number
11,031,633
7,928,470
7,877,273
7,479,218
5,068,638
2,903,118
2,846,697
%
14.77%
10.61%
10.54%
10.01%
6.78%
3.89%
3.81%
Report, the Directors’ Report and the financial statements in
accordance with applicable law and regulations.
Company law requires the Directors to prepare group and
company financial statements for each financial year. The
Directors have elected under company law and the AIM Rules
of the London Stock Exchange to prepare the company and
group financial statements in accordance with international
accounting standards in conformity with the requirements of
the Companies Act 2006.
The group and company financial statements are required by
law and international accounting standards in conformity with
the requirements of the Companies Act 2006 to present fairly
the financial position of the group and the company and the
financial performance of the group. The Companies Act 2006
provides in relation to such financial statements that
references in the relevant part of that Act to financial
statements giving a true and fair view are references to their
achieving a fair presentation.
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 they have been prepared in accordance
with international accounting standards in conformity
with the requirements of the Companies Act 2006
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
Directors’ responsibility statement
The following statement, which should be read in conjunction
with the report of the auditor set out on page 37, is made to
distinguish for shareholders the respective responsibilities of
the Directors and of the auditor in relation to the financial
statements.
The Directors are responsible for the maintenance and
integrity of the corporate and financial information included
on the Group's website. Legislation in the United Kingdom
governing the preparation and dissemination of financial
statements may differ from legislation in other jurisdictions.
BY ORDER OF THE BOARD
The Directors are responsible for preparing the Strategic
R Greenhalgh Company Secretary - 15 March 2021
27
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:
https://bango.com/investor/aim-rule-26/, 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 and 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 to both challenge and
support the Executive Directors, and to ensure that shareholders’
and wider stakeholders’ interests are 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. In his first year as CEO, a year during which
Bango has worked almost exclusively remotely due to COVID-19
restrictions, Paul has continued to build the culture, team and
processes necessary for Bango’s growth, delivering results ahead
of market expectations and placing Bango in a strong position
to deliver upon its expectations for 2021 and beyond.
Matt Garner brings many years of financial leadership from
managing complex global technology businesses. Having listed
a company on AIM as part of a dual listing, Matt has a deep
knowledge of regulatory and compliance matters in addition to
day to day financial leadership on a global scale.
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 of 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 built her career in start-ups and fast growth
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, and active involvement in eCommerce 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. As co-founder of The Emotion Network, focussed
on empowering human potential, Gianluca has been able to
drive the Bango inclusion and diversity agenda, and his
investment and M&A experience contributed significantly to the
successful acquisition and spin-out of the Audiens business.
One Director identifies as female, one as non-binary, one as no
gender and five as male. In addition, the Company Secretary
identifies as female.
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
Directors are required to work full time. Non-Executive Directors
28
Corporate governance report
(NED) commitments
are contracted to commit to 11 or more days a year but all spend
20-30 days working for, and representing, Bango. Non-Executive
include attendance at and
Director
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.
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 in January 2020.
The implementation of a clear delineation of roles and
responsibilities between Executive Chair and Senior
Independent Director at board level, and between CEO
and Executive Chair at a management level.
•
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. 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 must 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 during 2019 and 2020 with the appointment of three
new Non-Executive Directors in that period. These new Directors
contribute 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 certain changes
its governance structure.
Accordingly, at the 2020 AGM the Articles of Association were
amended as follows:
to
•
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 was
removed.
Working with
implemented the following:
the Company Secretary,
the Board also
•
The appointment of Sir Eric Peacock as Senior Independent
Director. Eric has a wealth of experience in fast-growth
The Board adopted and implemented a policy that strictly
divides Board roles and responsibilities as follows:
Executive Chair
•
• Oversees Board direction and effectiveness and Board
Leads the Board and chairs Board meetings
agenda
• 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 overseeing
Bango’s investment in NewDeep and for driving key projects, as
determined by the CEO or the Board, such as the development
of strategic partnerships (including that with NHN, NewDeep’s
majority shareholder). As CEO, Paul Larbey is responsible for the
delivery of the business model, alongside the 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 the CFO and the CMO, and in an 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
Independent Director on matters
to Corporate
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
29
Corporate governance report
independent oversight on the basis that 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 financial information as well as extensive information
on the KPIs for Bango. The Non-Executive Directors attend all
Board meetings. Attendance at full Board meetings, and Audit
(Audit Co), Remuneration (Rem Co) and Nominations (Nom Co)
meetings for 2020 was as follows:
Ray Anderson
Paul Larbey
Carolyn Rand
Anil Malhotra
Gianluca
D’Agostino
Nancy
Cruickshank
Eric Peacock
Frank Bury
Board
11 (11)
11 (11)
11 (11)
11 (11)
11 (11)
11 (11)
11 (11)
11 (11)
Audit
Co
3(3)*
3 (3)*
3 (3)*
3 (3)*
3 (3)
2 (3)*
3 (3)
3 (3)
Rem
Co
-
-
-
-
-
3 (3)
3 (3)
3 (3)
Nom
Co
-
-
-
2 (2)
-
2 (2)
2 (2)
-
(x) Number of meetings held. * By invitation of the committee
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
incorporates performance-related
Executive
elements
those of Bango
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 whole Board 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
2020 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
Disclosures Committee, which has been formally established by
the Board.
Further detail on board performance may be found in the AIM
Rule 26 section of the Bango investor website, located at
https://bango.com/investor/aim-rule-26/.
Advisors to the Board
During 2020, there were no internal advisors to the Board, other
than the Company Secretary, who also acts as Bango Senior
Counsel. 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 2020, considerations, uncertainties, opportunities and risks
surrounding the Covid-19 pandemic. 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 25, and as 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 are set out on
page 34 in the Remuneration Committee report.
During 2020 Bango appointed PWC and Mills & Reeve to advise
on the investment by NHN Corporation in both Bango and
NewDeep. Bango sought further advice from Mills & Reeve and
Grant Thornton on the finance and legal aspects of its strategic
partnership with TPAY Mobile, announced in January 2021.
Early in 2021 Bango changed its Nominated Advisor (“NOMAD”)
to Liberum Capital Limited. finnCap Ltd acted as Bango’s
NOMAD during 2020, up until Liberum’s appointment. Other
than FIT and finnCap, and those advisors listed here, no further
external advisors were appointed by either the Board or any of
its sub-committees during 2020, and the Board did not seek
external advice on any other 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: https://bango.com/investor/
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 which provides shareholders
with an opportunity to meet the Board of Directors and to
ask questions relating to the business.
30
Further detail on Bango corporate culture and how it works in
practice, including information on employee engagement,
diversity and inclusion, can be found within the Sustainability
section as well as the AIM Rule 26 section of the Bango investor
website, located at https://bango.com/investor/aim-rule-26/.
All these measures contribute towards minimizing risk and
uncertainty.
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. In
addition to the ongoing advice provided by the Company
Secretary and CFO referred to within the Advisors to the board
section above, industry-specific updates are delivered to the
Board by the relevant expert, be it a Director, an employee or an
independent expert.
investor
website,
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
at
Bango
https://bango.com/investor/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.
located
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 https://bango.com/investor/aim-rule-26/
Ray Anderson, Executive Chair;
Eric Peacock, Senior Independent Director
Corporate governance report
Strategy days are held annually. All shareholders are welcome
to attend strategy days, at which members of the Board present
the Bango strategy and are available to take questions from,
and communicate with, shareholders face to face. The 2020
strategy day was held successfully in January, before the onset
of the Covid-19 pandemic. The 2021 strategy day is scheduled to
take place on the day of the Bango AGM, with arrangements to
be determined nearer the time, dependent on the status of
government working and social distancing restrictions.
All statutory financial reports, as well as accompanying
presentations are published on https://bango.com/investor 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.
In 2021 a disclosures committee was formed under the chair of
Anil Malhotra, CMO, with the CFO and Company Secretary
comprising the other members. The committee is tasked with the
ongoing consideration and assessment of matters that may be
or become price sensitive and therefore may warrant insider
status or require announcement to the market. Advice is sought
from Bango’s NOMAD and solicitors on this important area of
focus as appropriate.
The members of all Bango committees are assessed carefully
and reviewed annually. All members are 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. As highlighted in the
Sustainability section on page 11, employee engagement surveys,
which cover all aspects of the business, are conducted annually
by an external human resources specialist, and their results
reported to the Board. Where suggestions for improvement or
concerns are raised, these are followed up by management who
are accountable to the Board for implementation.
Corporate culture has Board-level visibility and involvement.
Board members have open access to people and information
across Bango, and employees themselves can access Board
members if they wish.
31
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 security and virtual checks are in place at all
Bango systems, locations and wherever Bango people
work 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 business continuity plan is documented and in place.
The Board in conjunction with the Audit Committee keeps under
review Bango’s internal control system on a periodic basis. An
internal cross functional Infosec team also meets periodically to
review the controls and processes in place for Bango.
Frank Bury
Audit Committee Chair
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
the
shareholders
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 CFO and, as appropriate, other Executive Directors maintain
an ongoing dialogue with all members of the Audit Committee
(and the wider Board) and work closely with the Committee
Chair in particular to ensure the continued effectiveness of the
financial systems and statements of Bango and the ongoing
performance, independence and objectivity of Bango’s external
auditors, RSM UK Audit LLP.
External auditors and their performance are formally evaluated
by the Board after the delivery of both interim and year end
results. Consideration is given to their ongoing suitability as
auditor, as well as requirements for auditor rotation.
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.
32
During 2020 the Nominations Committee undertook a review of
board composition and identified no significant gaps in the
experiences and capabilities of the Board. The Committee
supports the view that the Board would benefit from greater
exposure to global tech companies and markets – particularly in
the United States and/or Asia - and would therefore define a
role for an additional Non-Executive Director who could bring
this exposure to the Board. The Nominations Committee, with
the support of the wider Board, is in the process to identifying
suitable candidates. As with all senior appointments, the process
will consider suitably qualified female candidates in particular, to
ensure Bango continues its strong track record of fostering
diversity and representation at all levels in the business.
Eric Peacock
Nominations Committee Chair and Senior Independent Director
Nominations committee reports
The Bango Nominations Committee is a sub-committee of the
Board of Directors, tasked with evaluating board composition
and performance, and managing appointments to the Board
when required.
Composition
The Nominations Committee is composed of two Non-Executive
Directors, Eric Peacock and Nancy Cruickshank, and one
Executive Director, Anil Malhotra (CMO). The Committee is
supported by the Company Secretary.
The Nominations Committee 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 regarding board
composition
To oversee and monitor board member 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 developed and
reviewed
2020 Activities
During 2020 the Committee reviewed the configuration of Board
roles following the 2019/2020 appointment of new directors.
The Nominations Committee considered the strengths of Board
members and proposed changes to the Board that were
reviewed and formalized in January 2020. The changes were:
Paul Larbey became CEO and was officially appointed to the
Board. Ray Anderson became Executive Chair, succeeding David
the Nominations Committee
Sear. At
recommended the appointment of a non-Executive Director to
the role of Senior Independent Director, who could exercise a
casting vote in the event of an equal split of votes at the Board.
Eric Peacock was proposed and accepted for the role of Senior
Independent Director.
the same
time,
The Senior Independent Director’s role as Chair of the
Nominations Committee is important at Bango given the
Executive role undertaken by the Chair. The Senior Independent
Director oversees the performance of the Executive 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.
The effectiveness of this split between Executive Chair, CEO and
Senior Independent Director was reviewed by the Nominations
Committee at the end of 2020. The Committee agreed that this
structure had worked very effectively during the year, with clear
divisions of roles and responsibilities.
33
Remuneration 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 if required. The Committee is supported by the
Company Secretary, who provides information, assistance and
advice as required.
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.
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 while aligning closely to the package offered to other
Bango employees. Bango offers a base salary, performance
related bonuses, as well as share options and a workplace
pension to Executive Directors. Executive Director remuneration
and policy is reviewed annually by the Committee to ensure the
package offered is appropriate both to support the delivery of
Bango strategy and objectives in the short, medium and long-
term, and to retain and, where necessary, recruit, high quality
executives. It considers the nature of Bango’s business, as well as
its size and growth-oriented nature. Packages are intended to
both reward and incentivize thereby ensuring that the Executive
Directors are motivated to continue to deliver sustainable growth
in shareholder value and are aligned with the long-term interests
of shareholders.
As highlighted in the 2019 Annual Report, 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.
Annual salary
The 2019 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. No changes were made to
the salaries paid to the CEO, CFO or CMO during 2020. The
salary of Ray Anderson was reviewed upon his transition from
CEO to Exec Chair and it was considered by the Remuneration
Committee that no change was required, given his contribution
to the Board as Chair, his experience and value to Bango, as
well as his wider, significant contribution to Bango in his
management and strategic capacities.
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 performance criteria 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.
FITs 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.
In 2020 the bonus scheme was structured as follows:-
90% of the bonus target was common to all Executive Directors
and was based on the achievement of financial metrics.
Minimum, target and maximum levels were set for each metric.
Below the minimum, the payout was zero, where the target was
met, the payout was 100%, and if the maximum metric was
exceeded the payout was up to 150%. In 2020 the Executives
Directors earned 118% of the bonus target for these common
financial targets. The metrics and results were split as follows:
34
Remuneration committee report
Financial Metric
Revenue
EUS
Adj EBITDA
Bonus Weighting
40%
30%
20%
Result
57%
31%
30%
The final 10% of the bonus target was based on individual
objectives specific to each Executive. The results were as follows:
Individual Objectives
Exec Chair
CEO
CMO
CFO
Result
5%
8.5%
9%
6%
Share options
Bango considers that active participation in a share option plan
is an effective means of incentivizing and retaining high quality
people. The rules governing the Bango share option scheme
remain substantially the same as those first adopted in 2005
when Bango listed on AIM, and are still considered appropriate
given the size and growth nature of Bango. Options lapse after
10 years and there is a 12% maximum dilution at any point.
Alongside all employees, Executive Directors are eligible to
participate in the share option scheme on completion of an
agreed probationary period. In accordance with corporate
governance best practice, Non-Executive Directors are not
granted share options.
In January 2021 Bango sought independent advice from FIT on
the structure and implementation of its share option policy as
regards the Executive Directors. This review concluded that it was
not necessary to make any changes to the existing plan from a
corporate governance perspective, and highlighted practical and
commercial advantages to certain key elements.
Share options are granted following a review of staff
performance by the wider leadership team. The Remuneration
Committee then approves the overall size of the grant for
employees and sets the option levels for the Executive Directors.
Share options may only be granted after approval by the
Committee and in line with the restrictions set out under the
Bango share option scheme rules. All options are granted at the
market rate at the date of grant. The Directors therefore see no
value in their share options unless Bango performs well, and the
market price of Bango shares rises. The scheme administered by
Bango does not provide for the repricing of options if the share
price falls, and no other form of compensation is provided for
any such loss of value. Indeed, in these circumstances the
Executive Directors not only lose the benefit of their options, they
are also likely to see a reduction in any bonus paid to them if the
fall in share price is for reasons aligned with any failure to meet
their targets. The interests of the Directors are therefore aligned
with those of shareholders to deliver sustained, medium to long
term growth.
The number of options awarded to all staff, including Executive
Directors, is directly related to their contribution to Bango and its
future growth. The number of options granted to the Executive
Directors is generally fixed. The Directors are therefore not
influenced by short-term progress or share price at the time of
grant.
Bango grants options at six monthly intervals. This provides an
ongoing incentive and is designed to retain staff (including the
Executive Directors) as it provides options at a range of prices –
as visible from the option grant prices listed within the Directors’
report on page 26. It also mitigates the danger of “underwater”
options becoming de-motivating.
Options vest in equal tranches over a period of three years from
the date of grant. Options vest over a 3-year period in-line with
standard practice in global tech companies and to ensure
consistency of implementation of the scheme across all of
Bango. The plan rules contain certain conditions around the
exercise and vesting of options.
The scheme administered by Bango is an EMI scheme. However,
the vast majority of options held by the Executive Directors
(>95%) do not benefit from EMI status. Bango policy is to ensure
that those whose share option grants are lower in number
benefit from the tax advantages afforded by the EMI scheme in
preference to those who receive a higher number. The benefits
afforded by these tax advantages, and therefore the value to
the share options themselves, are therefore reduced for the
Executive Directors.
Further details of the option plan and outstanding options as at
31 December 2020 are given in note 7 to the financial statements.
Details of the share options and shares held by the Directors of
Bango are shown in the Directors’ report on page 26.
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.
Payments for Loss of Office
There were no payments made to any previous directors for loss
of office in 2020.
Service agreements
The Executive Directors have service agreements with Bango.net
Ltd which were refreshed in early 2021 to ensure continued
alignment with industry best practices. The agreements include
non-compete, non-poaching, garden leave and confidentiality
clauses, and mutual three-month notice periods.
35
Remuneration committee report
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.
Implementation of Remuneration policy in 2021
FIT undertook a further review of Executive remuneration at the
end of 2020 as a part of the Remuneration Committee’s own
review on remuneration for the financial year 2021. After careful
consideration of the existing package, the findings of FIT, and
the performance of and contributions made by the Executives,
as well as the success of Bango in 2020, the Remuneration
Committee determined as follows.
In 2021 the bonus scheme will remain similar to the scheme used
Directors’ emoluments
Details of remuneration in respect of the Directors is as follows:
in 2020 with Revenue and EBITDA being common measures for
all Executive Directors and making 90% of the target bonus, the
remaining 10% being based on personal objectives. Minimum
targets are set below which the payout is zero. Maximum targets
allow for overachievement to a maximum of 150%. In 2021 the
target bonus for all Executive Directors will be 30% of base
salary.
In 2021 no change is anticipated to the Exec Chair or CFO salary
(Matt Garner was appointed as CFO on 1 March 2021). The CMO
salary will be determined by the CEO in accordance with the
wider remuneration policy and taking into account industry
benchmarks. The CEO salary will be determined by the
Remuneration Committee taking a progressive approach based
on achievement of a number of objective measures.
31 December 2020
R Anderson
P Larbey*
A Malhotra
C Rand
G D’Agostino
F Bury***
N Cruickshank
E Peacock***
D Sear**
Wages and salaries
£
212,000
212,000
175,000
145,000
22,500
24,288
22,500
24,288
5,167
842,743
Variable pay****
£
40,500
34,020
40,500
12,500
-
-
-
-
-
127,520
Pension and other benefits
£
8,883
8,883
8,104
42,944
-
-
-
-
-
68,814
Total
£
261,383
254,903
223,604
200,444
22,500
24,288
22,500
24,288
5,167
1,039,077
*Paul Larbey was appointed as an Executive Director on 22 January 2020.
** Non-Executive Director David Sear resigned on 22 January 2020.
*** Frank Bury and Eric Peacock were appointed as Directors on 3 December 2019. The 2020 figure includes payment for the part
month served in December 2019.
**** Variable pay for 2019 results, paid in 2020.
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
621,542
Variable pay***
£
50,000
50,000
-
-
-
-
-
100,000
Pension and other benefits
£
8,317
7,525
46,870
-
-
-
-
62,712
Total
£
257,236
220,144
191,249
8,625
22,500
62,000
22,500
784,254
During 2019 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.
* Non-Executive Director Martin Rigby resigned on 17 May 2019.
** Non-Executive Director David Sear resigned on 22 January 2020.
**** Variable pay for 2018 results, paid in 2019.
Nancy Cruickshank
Remuneration Committee Chair
36
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 2020 which comprise the 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 significant accounting policies. The financial reporting framework that has
been applied in their preparation is applicable law and International Accounting Standards in conformity with the requirements of
the Companies Act 2006 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 2020 and of the group’s profit for the year then ended;
the group financial statements have been properly prepared in accordance with International Accounting Standards in
conformity with the requirements of the Companies Act 2006;
the parent company financial statements have been properly prepared in accordance with International Accounting Standards
in conformity with the requirements of the Companies Act 2006 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
In auditing the financial statements, we have concluded that the directors’ use of the going concern basis of accounting in the
preparation of the financial statements is appropriate. Our evaluation of the directors’ assessment of the group’s and parent
company’s ability to continue to adopt the going concern basis of accounting included:
•
•
•
•
understanding how the cash flow forecasts for the going concern period had been prepared and the assumptions adopted;
testing of the integrity of the forecast model to ensure it was operating as expected;
challenging the key assumptions within the forecast with agreement to supporting data where possible;
review and consideration of the appropriateness of the sensitivity analysis performed by management and available actions
should performance be behind expectations.
We note the strength of the balance sheet at 31 December 2020 with £5.8 million of cash and cash equivalents which, along with
projected revenue growth, mean that the group is expected to be able to comfortably operate within its existing banking facilities.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that,
individually or collectively, may cast significant doubt on the group’s or the parent company’s ability to continue as a going concern
for a period of at least twelve months from when the financial statements are authorized for issue.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of
this report.
37
Independent auditor’s report to the members of Bango PLC
Summary of our audit approach
Key audit matters
Group
• Revenue recognition
• Development cost capitalization
• Disposal of 60% of Bango Deep Limited (now NewDeep Limited)
Parent Company
• Disposal of 60% of Bango Deep Limited (now NewDeep Limited)
Materiality
Group
• Overall materiality: £189,000 (2019: £200,000)
• Performance materiality: £141,750 (2019: £150,000)
Parent Company
• Overall materiality: £95,000 (2019: £80,000)
• Performance materiality: £71,250 (2019: £60,000)
Scope
Our audit procedures covered 98% of revenue, 99% of total assets and 100% of
group profit before tax.
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.
Revenue recognition
Key audit matter description
Under International Auditing Standards there is a rebuttable presumed risk of fraud that revenue
may be misstated due to improper revenue recognition.
For the more complex contracts involving multiple services, there is management judgement
required to determine the distinct performance obligations and in the allocation of consideration
to each of these obligations in line with the requirements of IFRS 15 “Revenue from Contracts with
Customers”.
How the matter was
addressed in the audit
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 was in line with contractual
arrangements.
We reviewed and challenged management’s assessment of the performance obligations and the
allocation of consideration to the performance obligations for a sample of contracts including
the larger and more complex agreements. The main judgements surrounded whether the
performance obligations for connection activities and the sale of software licenses were distinct
or connected with other services in the agreements.
We also considered the adequacy of the Group’s revenue recognition accounting policy as
disclosed in note 3.12 and the judgements disclosed in note 3.22.
38
Independent auditor’s report to the members of Bango PLC
Development cost capitalization
Key audit matter
description
The internal development costs capitalized are disclosed in note 5.3.
The group incurs expenditure on the development of its software and products which
are capitalized if certain criteria are met in accordance with IAS 38 “Intangible Assets”.
We focus on the capitalization of development costs due to the impact on reported
earnings and the judgements involved in assessing whether the IAS 38 criteria for
capitalization have been met.
How the matter was
addressed in the audit
We confirmed our understanding of management’s basis for capitalizing
development costs, updated our understanding of key existing and new projects and
determined whether the costs had been appropriately capitalized in accordance with
IAS 38.
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 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 3.5 and the judgements disclosed in note 3.22.
Disposal of 60% of Bango Deep Limited (now NewDeep Limited)
Key audit matter
description
On 6 April 2020, the group lost control of Bango Deep Limited following a share
issue by Bango Deep Limited (now NewDeep Limited) which resulted in NHN Corp
owning 60% of the share capital. As part of the deal the group obtained the
ongoing rights to utilize certain proprietary software.
In order to determine the profit on disposal of the 60% shareholding, management
were required to value the software acquired and the remaining 40% shareholding.
There is judgement involved in the valuation of such assets.
How the matter was
addressed in the audit
We reviewed and challenged the reasonableness of the approach taken by
management to value the acquired intangible assets and the remaining 40%
shareholding. This involved the use of our valuation specialists.
We considered whether the resulting profit on disposal had been correctly calculated
and appropriately disclosed as part of discontinued activities.
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. Based on our professional judgement, we determined materiality as follows:
39
Independent auditor’s report to the members of Bango PLC
Group
Parent company
Overall materiality
£189,000 (2019: £200,000)
£95,000 (2019: £80,000)
Basis for determining overall
materiality
2% of
monetization revenues
transactional and data
0.2% of net assets
Rationale for benchmark
applied
This key performance
is
focused upon by investors as a measure
of the level of growth achieved by the
group.
indicator
Net assets was chosen as the entity is
a non-trading holding company.
Performance materiality
£141,750 (2019: £150,000)
£71,250 (2019: £60,000)
Basis for determining
performance materiality
75% of overall materiality
75% of overall materiality
Reporting of misstatements to
the Audit Committee
Misstatements in excess of £9,500 and
misstatements below that threshold
that, in our view, warranted reporting
on qualitative grounds.
Misstatements in excess of £4,750 and
misstatements below that threshold
that, in our view, warranted reporting
on qualitative grounds.
An overview of the scope of our audit
The group consists of 8 components operating mainly from the United Kingdom but also from the United States of America, Japan,
Ireland, Canada, Spain and Nigeria. In addition, the group has a 40% share in a group of companies operated in the United
Kingdom and Italy which is equity accounted for as an associate.
The coverage achieved by our audit procedures was:
Number of
components
Revenue
Total assets
Profit before tax
Full scope audit
Specific audit
procedures on
associate
Total
2
-
2
98%
-
98%
78%
21%
99%
110%
(10)%
100%
Analytical procedures at group level were performed for the remaining 6 components.
Other information
The other information comprises the information included in the annual report, other than the financial statements and our auditor’s
report thereon. The directors are responsible for the other information contained within the annual report. 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.
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 course of 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 this gives rise
to a material misstatement in the financial statements themselves. 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.
40
Independent auditor’s report to the members of Bango PLC
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
• 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 27, 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.
The extent to which the audit was considered capable of detecting irregularities, including fraud
Irregularities are instances of non-compliance with laws and regulations. The objectives of our audit are to obtain sufficient
appropriate audit evidence regarding compliance with laws and regulations that have a direct effect on the determination of material
amounts and disclosures in the financial statements, to perform audit procedures to help identify instances of non-compliance with
other laws and regulations that may have a material effect on the financial statements, and to respond appropriately to identified
or suspected non-compliance with laws and regulations identified during the audit.
In relation to fraud, the objectives of our audit are to identify and assess the risk of material misstatement of the financial statements
due to fraud, to obtain sufficient appropriate audit evidence regarding the assessed risks of material misstatement due to fraud
through designing and implementing appropriate responses and to respond appropriately to fraud or suspected fraud identified
during the audit.
41
Independent auditor’s report to the members of Bango PLC
However, it is the primary responsibility of management, with the oversight of those charged with governance, to ensure that the
entity's operations are conducted in accordance with the provisions of laws and regulations and for the prevention and detection of
fraud.
In identifying and assessing risks of material misstatement in respect of irregularities, including fraud, the group audit engagement
team:
•
•
obtained an understanding of the nature of the industry and sector, including the legal and regulatory frameworks that the
group and parent company operates in and how the group and parent company are complying with the legal and regulatory
frameworks;
inquired of management, and those charged with governance, about their own identification and assessment of the risks of
irregularities, including any known actual, suspected or alleged instances of fraud;
discussed matters about non-compliance with laws and regulations and how fraud might occur including assessment of how
and where the financial statements may be susceptible to fraud.
The most significant laws and regulations were determined as follows:
•
Legislation /
Regulation
UK-adopted IAS and
Companies Act 2006
Additional audit procedures performed by the Group audit engagement team
included:
Review of the financial statement disclosures and testing to supporting documentation.
Completion of disclosure checklists to identify areas of non-compliance.
Tax compliance
regulations
GDPR
Inspection of advice received from external tax advisors.
Audit of the calculation of the research and development tax credit to ensure suitably
supported and in line with legislation.
ISAs limit the required audit procedures to identify non-compliance with these laws and
regulations to inquiry of management and where appropriate, those charged with
governance.
The areas that we identified as being susceptible to material misstatement due to fraud were:
Risk
Audit procedures performed by the audit engagement team:
Revenue recognition
Management
override of controls
See key audit matters above. In addition, we reviewed revenue journals for
appropriateness using financial data analytics software.
Testing the appropriateness of journal entries and other adjustments;
Assessing whether the judgements made in making accounting estimates are indicative
of a potential bias; and
Evaluating the business rationale of any significant transactions that are unusual or
outside the normal course of business.
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
15 March 2021
42
Consolidated statement of financial position
As at 31 December 2020
Note
31 Dec 2020
£
‘000
31 Dec 2019
£
‘000
ASSETS
Non-current assets
Property, plant and equipment
Right of use assets
Intangible assets
Investments accounted for using the equity method
Current assets
Trade and other receivables
Research and development tax credits
Cash and cash equivalents
Total assets
5.1
5.2
5.3
17
6
6
EQUITY
Capital and reserves attributable to equity holders of the parent company
Share capital
Share premium account
Merger reserve
Share based payment reserve
Foreign exchange reserve
Accumulated losses
7
Total equity
LIABILITIES
Current liabilities
Trade and other payables
Lease liabilities
Non-current liabilities
Lease liabilities
Deferred tax liability
Total liabilities
Total equity and liabilities
8
5.2
5.2
15
114
131
12,068
5,686
17,999
3,196
-
5,837
9,033
27,032
14,942
38,940
2,175
2,332
299
(34,600)
24,088
1,882
73
1,955
75
914
989
2,944
27,032
283
931
12,201
-
13,415
2,588
597
2,687
5,872
19,287
14,137
36,057
2,175
4,526
77
(42,275)
14,697
3,421
303
3,724
748
118
866
4,590
19,287
These financial statements were approved and authorized for issue by the Directors on 15 March 2021 and are signed on their
behalf by:
P Larbey
Director
Company registration number 05386079
The notes on pages 47 to 68 are an integral part of these consolidated financial statement
43
Consolidated statement of comprehensive income
For the year ended 31 December 2020
Alternative performance measure (Non-IFRS)
End User Spend
Continuing operations
Revenue
Cost of sales
Gross profit
Other administrative expenses
Exceptional items
Share based payments
Depreciation
Amortization
Total administrative expenses
Operating profit / (loss)
Interest payable
Investment income
Share of net loss of associates accounted for using the equity method
Profit / (loss) before taxation from continuing operations
Income tax
Profit / (loss) from continuing operations
Profit / (loss) from discontinued operations
Profit / (loss) for the financial year (attributable to equity holders of the company)
Other comprehensive Income
Items that may be reclassified to profit or loss
Foreign exchange on consolidation
Foreign exchange realized on discontinued operations
Profit / (loss) and total comprehensive income for the financial year
Earnings / (loss) per share attributable to the equity holders of the parent
Basic earnings / (loss) per share
From continuing operations
From continuing and discontinued operations
Diluted earnings / (loss) per share
From continuing operations
From continuing and discontinued operations
2020
Note
£ ‘000
2019
Restated
£ ‘000
4
4
10
11
12
5
5.3
14
14
17
11.
15
16
16
18
18
1,851,995
1,093,440
12,165
(341)
11,824
(7,267)
-
(806)
(338)
(2,249)
7,173
(72)
7,101
(6,825)
(165)
(806)
(403)
(1,465)
(10,660)
(9,664)
1,164
(27)
-
(530)
607
136
743
3,932
4,675
189
33
(2,563)
(56)
12
-
(2,607)
450
(2,157)
(179)
(2,336)
(85)
-
4,897
(2,421)
1.01p
6.37p
1.00p
6.29p
(3.07)p
(3.32)p
(3.07)p
(3.32)p
The notes on pages 47 to 68 are an integral part of these consolidated financial statements.
44
Consolidated cash flow statement
For the year ended 31 December 2020
Net cash generated from operating activities
Cash flows used by investing activities
Purchases of property, plant and equipment
Expenditure on capitalized development costs and intangible assets
Purchase of remaining shares in Audiens
Net cash expended on disposal of subsidiary
Interest received
Net cash used by investing activities
Cash flows generated from financing activities
Proceeds from issuance of ordinary shares
Interest payments on finance lease obligations
Capital repayments of finance lease obligations
Net cash generated from financing activities
Net increase / (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of year
Exchange differences on cash and cash equivalents
Note
19
2020
£ ‘000
2019
£ ‘000
3,006
1,034
(80)
(1,865)
(989)
(376)
-
(148)
(2,088)
-
-
12
(3,310)
(2,224)
3,688
(18)
(216)
3,454
3,150
2,687
-
344
(26)
(240)
78
(1,112)
3,815
(16)
Cash and cash equivalents at end of year
5,837
2,687
Cash and cash equivalents
Lease liabilities
Net cash at end of year
Cash and cash equivalents
Lease liabilities
At 1
January
2020
£ ‘000
2,687
(1,051)
1,636
At 1
January
2019
£ ‘000
3,815
(1,258)
Cash flow
Other
Exchange
non-cash
movements
£ ‘000
-
669
669
£ ‘000
3,150
234
3,384
£ ‘000
-
-
-
Cash flow Other non-
cash
movements
£ ‘000
-
(59)
£ ‘000
(1,112)
266
Exchange
£ ‘000
(16)
-
At 31
December
2020
£ ‘000
5,837
(148)
5,689
At 31
December
2019
£ ‘000
2,687
(1,051)
Net cash at end of year
2,557
(846)
(59)
(16)
1,636
Other non-cash movements include new leases, disposals of leases and interest on leases.
The notes on pages 47 to 68 are an integral part of these consolidated financial statements.
45
Consolidated statement of changes in equity
Share capital
Share premium
account
Merger reserve
£ ‘000
14,137
-
-
703
102
805
-
-
-
-
£ ‘000
36,057
-
-
2,488
395
2,883
-
-
-
-
£ ‘000
2,175
-
-
-
-
-
-
-
-
-
Share-based
payment
reserve
£ ‘000
Foreign
exchange
reserve
£ ‘000
Retained
earnings
Total
£ ‘000
£ ‘000
4,526
806
(3,000)
-
-
(2,194)
-
-
-
-
77
(42,275)
14,697
-
-
-
-
-
-
33
189
222
299
-
3,000
-
-
3,000
4,675
-
806
-
3,191
497
4,494
4,675
33
-
189
4,675
4,897
(34,600)
24,088
14,942
38,940
2,175
2,332
Share capital
Share premium
account
Merger reserve
£ ‘000
14,054
£ ‘000
35,797
£ ‘000
2,175
Share-based
payment
reserve
£ ‘000
Foreign
exchange
reserve
£ ‘000
Retained
earnings
Total
£ ‘000
£ ‘000
3,881
162
(40,100)
15,969
-
-
83
83
-
-
-
-
-
260
260
-
-
-
-
-
-
-
-
-
-
806
(161)
-
645
-
-
-
-
-
-
-
-
(85)
(85)
-
161
-
161
(2,336)
-
806
-
343
1,149
(2,336)
(85)
(2,336)
(2,421)
14,137
36,057
2,175
4,526
77
(42,275)
14,697
Balance at 1 January
2020
Share based
payments
Transfer for exercised
options
Issue of new shares
Exercise of share
options
Transactions with
owners
Profit for the year
Foreign exchange
realized on
discontinued
operations
Foreign exchange on
consolidation
Total comprehensive
income for the year
Balance at 31
December 2020
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 2019
The notes on pages 47 to 68 are an integral part of these consolidated financial statements.
46
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 25. 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.
The financial statements for the year ended 31 December
2020 (including the comparatives for the year ended 31
December 2019) were approved by the Board of Directors on
15 March 2021.
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 2020, in accordance with International
Accounting Standards in conformity with the requirements of
the Companies Act 2006 (“IFRS”). IFRS requires the use of
certain critical accounting estimates.
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 3.22.
It also
These financial statements are presented in pounds sterling
(GBP) because that is the presentation currency of Bango
PLC.
2.1 Going concern
Bango had cash of £5.8M at 31 December 2020 (31 December
2019: £2.7M) and financing debt of £0.2M (31 December 2019:
£1.1M). Bango grew its EUS and revenue in 2020 in line with
prior year trends, and generated cash in 2020, mainly due to
the stable cost basis of the platform. The Board believes,
based on regular cashflows, that 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
financial statements
The consolidated
financial statements of Bango PLC and all entities controlled
by it after eliminating internal transactions. Control is achieved
where the Group has the power to govern the financial and
operating policies of a Group undertaking so as to obtain
economic benefits from its activities. Subsidiary undertakings’
results are adjusted, where appropriate, to conform to Group
accounting policies.
3.2 Changes in ownership interest
Following a loss of control, the subsidiary’s net assets including
any goodwill will be disposed from the group’s accounts. The
gain on disposal is determined by offsetting the net assets
against the fair value of consideration and assets received.
The fair value required significant judgements and estimates
of intangible assets retained within the group. In addition, any
amounts previously recognized in other comprehensive
income in respect of the former subsidiary are reclassified to
the income statement. The results of the subsidiary to the date
of disposal and the profit or loss on the disposal are shown in
discontinued activities.
3.3 Associates
Associates are all entities over which the group has significant
influence but not control or joint control. This is generally the
case where the group holds between 20% and 50% of the
voting rights of an entity. Investments in associates are initially
recognized at cost and thereafter accounted for using the
equity method of accounting.
Under the equity method of accounting, the investment is
adjusted from its initial cost with the group’s share of the post-
acquisition changes to shareholders funds from the associate
entity and recognized in the consolidated statement of
financial position. In addition, the group’s share of the post-
acquisition profit or losses are recognized in the income
statement with any movement in the associate entity’s other
comprehensive
the group’s other
reported
comprehensive income. Dividends received or receivable from
associates are also adjusted against the carrying amount of
the investment.
income
in
Where the group’s share of losses in an equity-accounted
investment equals or exceeds its interest in the entity, including
any other unsecured long-term receivables, the group does
not recognize further losses, unless it has incurred obligations
or made payments on behalf of the other entity.
The carrying amount of equity-accounted investments are
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. See note 17.
3.4 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:
47
Notes to the financial statements
Leasehold improvements
20% straight-line
Office equipment
20% straight-line
Computer equipment
33.3% straight-line
3.5 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
Intellectual property
5 – 8 years straight-line
3.5.1 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.
3.5.2 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.
3.5.3 Research and development
Expenditure on research activities is recognized as an expense
in the period in which it is incurred. An internally-generated
intangible asset arising from Bango's development activities is
recognized only if all of the following conditions are met:
• Completion of the intangible asset is technically feasible
•
•
•
•
•
so that it will be available for use or sale.
Bango intends to complete the intangible asset and use
or sell it.
Bango has the ability to use or sell the intangible asset.
The intangible asset will generate probable future
economic benefits. Among other things, this requires
that there is a market for the output from the intangible
asset or for the intangible asset itself, or, if it is to be
used internally, the asset will be used in generating such
benefits.
There are adequate technical, financial and other
resources to complete the development and to use or
sell the intangible asset.
The expenditure attributable to the intangible asset
during its development can be measured reliably.
Internally-generated intangible assets are amortized on a
straight-line basis over their useful economic lives. Where no
internally-generated intangible asset can be recognized,
development expenditure is recognized as an expense in the
period in which it is incurred.
The cost of an internally generated intangible asset comprises
all directly attributable costs necessary to create, produce and
prepare the intangible asset to be capable of operating in the
manner intended by management. Directly attributable costs
comprise employee salary and other employment costs
incurred, on a time apportioned basis, as well as a proportion
of attributable overhead costs. 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.
3.6 Impairment of non-current assets
At each statement of financial position date, Bango reviews
the carrying amounts of its non-current 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.
3.7 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.
3.8 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.
48
Notes to the financial statements
3.9 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.
3.10 Leases
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.
3.11 End User Spend (“EUS”)
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 payment data which can be used in
the data monetization business.
is
reported on
This
the consolidated statement of
comprehensive income as a non IFRS KPI and in Note 4 as
EUS is directly linked to Bango’s revenue.
3.12 Revenue recognition
Revenue is measured by reference to the fair value of
consideration receivable by Bango for services provided,
excluding taxes. Although Bango has a single segment, the
process of ensuring compliance with IFRS 15 requires the
company to analyze revenues generated based on specific
categories and activities. There are four recognized categories
in Bango.
1.
Payment transactions processed by the Bango
Platform;
2. The data monetization business;
3. Establishing connectivity and connections
for
customers connected to the platform;
4. Licence fees for the use of the software.
3.12.1 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:
•
•
•
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 and where the performance
obligation has been fully discharged. In addition,
revenue is recognized in the period if the customer can
separately benefit from the service provided with no
dependency on Bango.
License fees – where Bango charges a monthly fee for
access to the Bango Platform, this is recognized on a
straight-line basis over the period of access.
Support fees – where Bango provides period services
which are recognized on a straight-line basis over the
period of the service.
3.12.2 Data activity
Revenue from data activity consists of fees charged for
making data useable by merchants or other advertisers in
digital marketing campaigns and a recurring fee for using
Bango Marketplace 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.
49
Notes to the financial statements
Revenue is recognized at point of supply for data activity or
for subscription services on a straight-line basis over the
period of access to data.
3.12.3 Revenue activity from sale of licenses
Revenue from the sale of perpetual software licenses where
no customization of the software is required is recognized at
a point in time once the license has been delivered to the
customer and the customer can obtain benefit from the
license.
3.13 Employee benefits
All accumulating employee-compensated absences that are
unused at the statement of financial position date are
recognized as a liability.
Payments to defined contribution retirement benefit schemes
are charged as an expense in the period to which they relate.
3.14 Share-based payment transactions
Bango issues equity settled share-based compensation to
certain employees (including Directors). Equity settled share-
based payments are measured at fair value at the date of
grant. The fair value determined at the grant date of the
equity-settled share-based payment is expensed on a
straight-line basis over the vesting period, together with a
corresponding increase in equity, based upon the estimate of
the shares that will eventually vest. These estimates are
subsequently revised if there is any indication that the number
of options expected to vest differs from previous estimates.
Any cumulative adjustment prior to vesting is recognized in
the current period. No adjustment is made to any expense
recognized in prior periods.
Fair value is measured by an external valuer using the Black-
Scholes option pricing model. The expected life used in the
model has been adjusted, based on management’s best
estimate, for the effects of non-transferability, exercise
restrictions and behavioral considerations. No adjustment is
made for performance conditions as these do not form a
condition of the option agreement.
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.
3.15 Foreign currencies
Monetary assets and liabilities in foreign currencies are
translated into sterling at the rates of exchange prevailing at
the statement of financial position date. Transactions in
foreign currencies are translated into sterling at the rate of
exchange prevailing at the date of the transaction. Exchange
gains and losses are included in the profit or loss for the
period.
The functional currency of the Group is Sterling. Exchange
differences arising from the translation of foreign operations
recognized
are
income and
accumulated in a foreign currency translation reserve within
equity.
in other comprehensive
3.16 Segment reporting
Following the disposal of Bango Deep business, the directors
consider that the group has a single business segment, being
the monetization of the Bango Platform. All group operations
and research and development activity is managed centrally.
This is consistent with the information reviewed by the Chief
Operating Decision Maker (CODM) which is considered to be
the Board of Directors.
3.17 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.
3.18 Share capital and reserves
Share capital
Ordinary shares are classified as equity. Equity instruments
issued by Bango PLC are recorded at the proceeds received,
net of direct issue costs.
Share premium 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
share-based employee remuneration recognized over the
vesting period and the initial present value of warrants issued
over equity shares.
50
Notes to the financial statements
Foreign exchange reserve
The
translation
reserve
foreign exchange
differences arising from the translation of the Bango
subsidiaries financial statements which are held in local
currency into the consolidated Bango accounts which is
reported in GBP. This reserve only arises at consolidation.
represents
Retained earnings
Retained earnings include all current and prior period retained
profits.
3.19 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.
3.20 Standards and interpretations not yet applied by the
Group
For the purposes 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 2020. There was no significant
impact of new standards and interpretations adopted in the
year. 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 2021, 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 and associate companies. 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.
3.22 Significant accounting estimates and judgements
Revenue recognition
The main judgements taken by management relate to the
more complex customer contracts which have more than one
performance obligation.
Judgement is required to determine if these performance
obligations are distinct. For the year ended 31 December
2020, the directors determined that certain software licence
sales and integration services were distinct as the customer
could separately benefit from these services and licenses.
In addition, judgement is required in the allocation of total
contract consideration
the performance
obligations. The directors accepted the price negotiated at
arms-length between unrelated parties represented the fairest
to each of
means to allocate price for a product that is not comparable
on the market.
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 has been recognized as at 31 December
2020. With increased platform usage, new contracts leading
to
the
revenues, management will
appropriateness of the current policy to determine if changes
are required due to the utilization of some of the losses in the
next few years. See note 15.
increased
review
Development costs
Judgement is applied when deciding whether the recognition
requirements for development costs have been met, based on
the information available at each statement of financial
position date. The economic success of any product
development is uncertain at the time of recognition as it may
be subject to future technical problems and therefore
impairment reviews are completed for each project on the
statement of financial position date. The carrying value of
capitalized development costs is £5.9M (2019: £6.6M).
No projects are considered to be impaired based on expected
future revenues.
Acquisition accounting
Acquired assets are accounted for in accordance with IFRS 3
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.
The Group acquired proprietary software related to the
disposal of the NewDeep Limited group. The main judgement
involved the valuation of the software and also the initial
valuation of the associate. See note 16.
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.
51
Notes to the financial statements
4 Revenue
(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 the Bango platform. Therefore, to
give additional information to key stakeholders of Bango and to assist users of these financial statements, Bango includes this
additional reporting.
End User Spend
(b) Revenue analysis
Revenue by product:
Payments - transactional & data monetization
Payments non-transactional (licensing of software, platform &
technology), and integration
2020
£ ‘000
2019
£ ‘000
1,851,995
1,093,440
2020
£ ‘000
9,382
2,783
12,165
2019
£ ‘000
7,173
-
7,173
Most income is currently recognized at a point in time rather than over time.
(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
2020
£ ‘000
2019
£ ‘000
870
426
2,080
8,789
12,165
173
303
1,546
5,151
7,173
All turnover is spread over many territories, of which £5.3M comes from two partners in the Rest of the World and £1.2M comes from
a partner in USA and Canada. (2019: £1.0M from the partner in the USA and Canada, £3.0M from two partners in the Rest of the
World).
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.
2020
£ ‘000
17,999
-
2019
£ ‘000
11,007
2,408
17,999
13,415
52
Notes to the financial statements
5 Non-current assets
5.1 Property, plant and equipment
Leasehold
improvements
£ ‘000
Office
equipment
£ ‘000
Computer
equipment
£ ‘000
Cost
At 1 January 2020
Additions
Disposals
Disposals of subsidiary
Transfer to leases
At 31 December 2020
Depreciation
At 1 January 2020
Charge for the year
Disposals
Disposals of subsidiary
Transfer to leases
At 31 December 2020
Net book value
At 31 December 2020
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
303
1
(185)
(58)
-
61
200
17
(152)
(15)
-
50
1,809
70
(4)
(6)
(45)
1,824
1,648
87
(3)
(3)
(8)
1,721
291
9
(14)
(17)
-
269
272
5
(5)
(3)
-
269
-
11
103
114
Leasehold
improvements
£ ‘000
Office
equipment
£ ‘000
Computer
equipment
£ ‘000
365
-
11
(85)
291
319
13
(60)
272
19
274
(1)
30
-
303
168
32
-
200
103
2,463
-
106
(760)
1,809
2,047
117
(516)
1,648
161
283
Total
£ ‘000
2,403
80
(203)
(81)
(45)
2,154
2,120
109
(160)
(21)
(8)
2,040
Total
£ ‘000
3,102
(1)
147
(845)
2,403
2,534
162
(576)
2,120
53
Notes to the financial statements
5.2 Leases
Right of use assets
Building
Computer equipment
Others
Lease liabilities
Current
Non-current
During the year Bango Plc acquired and recognized £96,000 as a right of use assets.
Amounts recognized in profit or loss
Depreciation charge on right of use assets
Building
Computer equipment
Others
Interest expense (included in finance cost)
Expense relating to leases of low-value assets and short-term leases (included in
administrative expenses)
The total cash outflow for leases in the year was £0.24M (2019: £0.25M).
31 Dec 2020
£ ‘000
31 Dec 2019
£ ‘000
-
131
-
131
73
75
148
797
126
8
931
303
748
1,051
2020
£’000
2019
£’000
92
129
8
229
27
14
179
118
17
314
56
14
The company leases equipment with varying terms ranging from 12 months to 3 years. The Westbrook Centre, Cambridge lease
was terminated in September 2020.
54
Notes to the financial statements
5.3 Intangible assets
Domain
Names
Internal
Development
Cost
At 1 January 2020
Additions
Disposal of subsidiary
FX revaluation
At 31 December 2020
Amortization
At 1 January 2020
Charge for the year
Disposal of subsidiary
FX Revaluation
At 31 December 2020
NBV at
31 December 2020
£ ‘000
33
24
-
-
57
33
2
-
-
35
22
£ ‘000
13,559
1,841
(1,157)
-
14,243
6,993
1,389
(48)
-
8,334
5,909
Acquired
intangibles
(Software)
£ ‘000
Acquired
intangibles
(Contracts)
£ ‘000
Acquired
intangibles
(Brand)
£ ‘000
2,610
5,386
(1,806)
(26)
6,164
966
742
(433)
(26)
1,249
4,915
528
-
-
(18)
510
388
107
-
(18)
477
33
123
-
(78)
(1)
44
47
9
(14)
(1)
41
3
Domain
Names
Internal
Development
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
£ ‘000
33
-
-
33
33
-
-
33
-
£ ‘000
11,490
2,088
(19)
13,559
5,712
1,283
(2)
6,993
6,566
Acquired
intangibles
(Software)
£ ‘000
Acquired
intangibles
(Contracts)
£ ‘000
Acquired
intangibles
(Brand)
£ ‘000
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
Goodwill
Total
£ ‘000
£ ‘000
3,775
-
(2,548)
(41)
20,628
7,251
(5,589)
(86)
1,186
22,204
-
-
-
-
-
8,427
2,249
(495)
(45)
10,136
1,186
12,068
Goodwill
Total
£ ‘000
£ ‘000
3,804
-
(29)
3,775
18,671
2,088
(131)
20,628
-
-
-
-
6,743
1,723
(39)
8,427
3,775
12,201
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, £1.2m in May 2016. The
goodwill related to Audiens SRL acquired in 2018 for £ 2.5m has been treated as a disposal following a share issue by Bango Deep
Limited which resulted in NHN Corp owning 60% of the share capital (see note 16).
The underlying assets related to the outstanding goodwill has been classified as a single cash-generating unit (CGU) which has
been reviewed for any sign of impairment. The recoverable amount of the CGU was determined based on the value-in-use
calculations which required the use of certain assumptions. The calculations used cash flow projections based on financial budgets
approved by the Board for the current financial year with an additional projection to cover a 7 year period.
The following assumptions have been used in reviewing the goodwill for signs of impairment:
1. Assumed a revenue and cost growth of 2.5% annually from 2022
2. Current margins will remain the same in future years
3. Pre-tax discount rate of 20% has been applied
4. Major customer will continue the on-going business relationship. The customer has continued to increase its business with
Bango in the past few years
5. Annual capital expenditure will remain at £50,000 each year
55
Notes to the financial statements
If Bango lost the business of a key customer which resulted in a revenue collapse in excess of 50%, the group may be required to
recognize an impairment. There is no other reasonable possible change to either costs or interest rates in the key assumptions that
would result in an impairment.
6 Trade and other receivables
Trade receivables
Expected credit loss of trade receivables
Net trade receivables
Other receivables
Prepayments and accrued income
Research and development tax credits
Total
31 Dec 2020
£ ‘000
31 Dec 2019
£ ‘000
2,048
(27)
2,021
194
981
3,196
-
3,196
1,566
(56)
1,510
171
907
2,588
597
3,185
At 31 December 2020, 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 2020
£ ‘000
31 Dec 2019
£ ‘000
259
65
55
-
379
398
272
157
4
831
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 2020
Expected credit loss rate
Gross carrying amount
Lifetime expected credit loss
Current
£ ‘000
0.5%
259
1
One to three
months
£ ‘000
0.5%
65
-
Three to twelve
months
£ ‘000
1.5%
55
1
Over
twelve
months
£ ‘000
5%
0
-
Total
£ ‘000
379
2
Receivables not yet due of £1,669,000 are expected to have an immaterial credit loss rate.
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. Of the expected credit loss of £27,000, a specific provision
of £25,000 (2019: £51,000) has been recognized for a debt due from a client. The balance of £2,000 is the lifetime expected credit
loss.
56
Notes to the financial statements
As at 31 December 2019
Expected credit loss rate
Gross carrying amount
Lifetime expected credit loss
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
Current
£ ‘000
0.5%
398
2
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.
Receivables not yet due of £735,000 are expected to have an immaterial credit loss rate.
A reconciliation of allowance for expected credit losses for trade receivables is provided below:
Brought forward provision
Charge for the year
Utilized
Released
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 2018
Exercise of share options
As at 31 December 2019
Issue of new shares
Exercise of share options
As at 31 December 2020
31 Dec 2020
£ ‘000
31 Dec 2019
£ ‘000
56
25
(50)
(4)
27
5
51
-
-
56
No
70,267,908
417,834
£ ‘000
14,054
83
70,685,742
14,137
3,515,500
510,026
703
102
74,711,268
14,942
During the year 510,026 share options were exercised at exercise prices between 43 pence and 173 pence and a par value of 20
pence per share. The total proceeds were £496,984 of which £102,005 was recognized as share capital and £394,979 as share
premium.
On 23 January 2018, Bango 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. This remained outstanding as at 31 December 2020.
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. Employees leaving the Group may receive a waiver from the Board for a defined period during which they may exercise
options that had vested by their leaving date.
57
Notes to the financial statements
Movements in the number of share options outstanding and their related weighted average exercise prices are as follows:
Outstanding at 1 January
Granted
Lapsed
Exercised
Outstanding at 31 December
Exercisable at 1 January
Average
exercise price
per share
p
129
130
131
98
132
129
31 Dec 2020
Options
4,645,617
1,542,000
(266,535)
(510,026)
5,411,056
3,288,161
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
3,658,743
The weighted average share price at date of options exercised during the year was 131.78 pence (2019: 128.62 pence).
The fair value of options granted during the year, determined using the Black-Scholes valuation model, were between 46-77 pence.
Significant inputs into the model include a weighted average share price of 130 pence (31 December 2019: 110 pence) at the grant
date, the exercise prices, volatility of 60% (31 December 2019: 60%), dividend yield of nil (31 December 2019: nil), an expected option
life of five years (31 December 2019: five years) and an annual risk-free interest rate of 0.11-0.54% (31 December 2019: 0.22-0.90%).
The forfeiture rate is assumed to be 13.5% (31 December 2019: 20%) of the options issued.
At 31 December 2020, Bango PLC had the following outstanding options and exercise prices:
Average
exercise
price per share
Pence
-
-
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
67.50
121.50
172.00
2020
2020
2021
2021
2022
2022
2023
2023
2023
2024
2024
2025
2025
2026
2026
2027
2027
2028
2028
2028
2028
2029
2029
2029
2029
2030
2030
2030
Expiry date
16 March
24 September
17 March
9 September
23 March
20 September
26 March
02 April
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
18 March
7 April
17 September
Total
Options
31 Dec 2020
Remaining
Contractual
Average
exercise
Life price per share
Pence
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
Months
-
-
2
8
15
21
27
27
33
39
46
51
57
63
69
75
81
87
93
93
-
97
99
105
106
112
113
117
Number
-
-
6,250
8,875
15,322
30,323
54,000
10,000
54,000
36,000
71,040
101,248
119,030
292,412
221,074
284,751
371,000
396,533
253,914
150,000
-
100,000
736,528
446,828
150,000
386,428
392,000
723,500
Options
Number
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
31 Dec 2019
Remaining
Contractual
Life
Months
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
5,411,056
91
4,645,617
94
58
Notes to the financial statements
8 Trade and other payables
Trade payables
Social security and other taxes
Put and call option
Accruals and deferred income
645
361
-
876
1,882
1,314
259
990
858
3,421
31 Dec 2020
£ ‘000
31 Dec 2019
£ ‘000
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.
9 Commitments
Bango has lease liabilities for technical computer equipment, software and leasehold equipment. The leases will terminate by
December 2023. 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 2020
£ ‘000
31 Dec 2019
£ ‘000
74
76
150
(2)
148
338
803
1,141
(90)
1,051
2020
£ ‘000
5,467
2,587
2,606
2019
Restated
£ ‘000
4,952
1,868
2,844
10,660
9,664
7,267
-
806
338
2,249
10,660
6,825
165
806
403
1,465
9,664
59
Notes to the financial statements
11 Profit / (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
Exchange rate variances
Depreciation on property, plant and equipment – owned assets
Depreciation on property, plant and equipment – right of use assets
Amortization of intangible assets
Exceptional items
2020
£ ‘000
2019
Restated
£ ‘000
6
80
215
109
229
2,249
-
6
69
127
162
241
1,465
165
Exceptional items relate to costs spent during the prior 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.
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 gross payroll costs of the above were:
Wages and salaries
Social security costs
Other pension costs
Share based remuneration
2020
No
21
57
78
2020
£ ‘000
5,530
518
211
806
7,065
2019
No
22
62
84
2019
restated
£ ‘000
4,705
499
227
806
6,237
Included in the above payroll costs is £1,598,000 (31 December 2019: £1,285,000) capitalized within internal development (note 5.3).
The outstanding pension contributions on 31 December 2020 which was payable in January 2021 was £18,000 (2019: 16,000)
The Directors have identified fifteen (31 December 2019: eleven) key management personnel, including Directors. Compensation to
key management is set out below:
Wages and salaries
Employers national insurance
Other pension costs
Share based compensation
2020
£ ‘000
1,497
197
93
361
2,148
2019
£ ‘000
1,205
147
83
301
1,736
60
Notes to the financial statements
13 Directors
Remuneration in respect of Directors was as follows:
Emoluments
2020
£ ‘000
1,039
2019
£ ‘000
784
Further details can be found in the Remuneration Committee Report. The highest paid Director received total salary of £252,500
(2019: £248,919), pension contributions of £8,883 (2019: £8,317), and share based compensation of £55,000 (2019: £56,000).
The number of Directors who accrued benefits under pension schemes was four (2019: three).
The total share based compensation for Directors was £179,000 (2019: £140,000).
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
UK taxation
R&D tax credits receivable
Under recognition of prior year credit
Foreign taxation
R&D tax credits receivable
Under recognition of prior year R&D credit
Tax paid overseas
Under provision of prior year overseas tax
Total current tax
Original and reversal of timing differences
Under provision in respect of prior year deferred tax
Income tax expense is attributable to:
Continuing operations
Discontinued operations
Loss on ordinary activities before taxation
2020
£ ‘000
-
2020
£ ‘000
27
2019
£ ‘000
12
2019
£ ‘000
56
2020
£ ‘000
2019
£ ‘000
-
(28)
-
(42)
1
-
(69)
(108)
-
(177)
(136)
(41)
(177)
(465)
(4)
(145)
(154)
6
13
(749)
(20)
29
(740)
(450)
(290)
(740)
61
Notes to the financial statements
Income tax expense for the year differs from the standard rate of taxation as follows:
Profit / (loss) from continuing operations
Profit / (loss) from discontinued operations
Profit / (loss) on ordinary activities before taxation
Profit / (loss) on ordinary activities multiplied by standard rate of tax of 19% (2019: 19%)
Effect of:
Expenses not deductible for tax purposes
Non-taxable profit on disposal of discontinued activities
Enhanced R&D relief
Movements in deferred tax not recognized
Adjustments in relation to prior years
Total tax
2020
£ ‘000
607
3,923
4,530
861
403
(921)
(410)
(40)
(70)
(177)
2019
£ ‘000
(2,607)
(469)
(3,076)
(584)
30
-
(610)
536
(112)
(740)
At 31 December 2020, the unutilized tax losses carried forward amounted to £34.1 million (at 31 December 2019: £34m).
Deferred tax assets/ (liabilities):
Share option deduction
Tax losses
Short term timing differences
Accelerated capital allowances and capitalized
development costs
Provided
Provided
31 Dec 2020
£000
31 Dec 2019
£’000
Unrecognized
31 Dec 2020
£000
Unrecognized
31 Dec 2019
£000
-
896
(8)
(1,802)
(914)
-
665
-
(783)
(118)
88
5,595
-
-
34
4,864
-
-
5,683
4,898
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 Discontinued operations
Control of Bango Deep Limited changed on 6 April 2020, following a share issue by New Deep Limited (formerly Bango Deep Limited)
which resulted in NHN Corp owning 60% of the share capital. The New Deep Limited group including its subsidiaries Audiens Srl and
Audiens Limited is reported in the current period as a disposal within discontinued operations. Bango Plc still retains a 40% interest
in the New Deep Limited group and has accounted for the New Deep Limited group as an associate using the equity method of
accounting.
62
Notes to the financial statements
16.1 Financial performance and cash flow information of the associate
Financial performance and cash flow information presented are for the period ended 6 April 2020
6 April 2020
£ ‘000
31 Dec 2019
£ ‘000
Revenue
Expenses
Depreciation & amortization
Exceptional items – transactional costs
Profit on sale of the subsidiary (Note 16.3)
Profit before tax
Taxation
Profit after tax from discontinued operation
Exchange differences on translation of discontinued operation
Profit/(loss) from discontinued activities
Cash movements from discontinued activities
Net cash inflow from operating activities
Net cash flow from investing activities
Net cash flow from financing activities
Net increase / (decrease) in cash generated by the subsidiary
16.2 Details of the disposal of the subsidiary
The carrying amount of assets and liabilities as at the date of sale on 6 April 2020 were:
184
(216)
(122)
(770)
4,847
3,923
42
3,965
(33)
3,932
307
(81)
(3)
223
Intangibles, property, plant and equipment
Goodwill
Trade receivables, cash & other debtors
Research and development tax credits
Total assets
Trade and other payables
Deferred tax liability
Total liabilities
Net assets
16.3 Profit on the sale of the subsidiary
Fair valuation of 40% investment in associate
Acquired intangible assets – proprietary software retained in group
Carrying amount of net assets (note 16.2)
Deferred tax on acquired intangible assets
Profit on sale of subsidiary
2,137
(2,275)
(331)
-
-
(469)
290
(179)
-
(179)
525
(703)
(2)
(180)
2020
£ ‘000
2,976
2,548
969
187
6,680
833
114
947
5,733
2020
£ ‘000
6,216
5,386
(5,733)
(1,022)
4,847
63
Notes to the financial statements
17 Interest in associates
Opening balance as at 1 January 2020
Addition – fair value of interest retained in the Bango Deep group
Share of operating losses
Closing balance as at 31 December 2020
£ ‘000
-
6,216
(530)
5,686
Name of entity
Place of business
% of ownership interest Nature of relationship Measurement method
NewDeep Limited
Audiens Srl *
Audiens Limited *
* These entities are both 100% owned subsidiaries of NewDeep Limited
The proportion of ownership is the same as the share rights held.
United Kingdom
Italy
United Kingdom
40%
40%
40%
Associate
Associate
Associate
Equity method
Equity method
Equity method
Summarized financial information for associates
The table below provides a summary of the financial information for New Deep Limited group, an associate of Bango Plc. The
information disclosed shows the balances for New Deep group and does not represent Bango Plc’s share of its interest. They have
been amended to reflect adjustments when using the equity method, including fair value adjustments and modifications for
differences in accounting policy.
Summarized balance sheet
Current assets
Non-current assets
Current net assets
Current liabilities
Net assets
Reconciliation of carrying amounts
Opening book value of assets
Fair value adjustment on acquisition
Cash injection - NHN
Loss for the period
Closing net assets
Group share in %
Group’s share
Carrying amount
31 Dec 2020
£ ‘000
6,466
9,019
15,485
(1,269)
14,216
2,931
6,144
6,466
(1,325)
14,216
40%
5,686
5,686
64
Notes to the financial statements
Summarized statement of comprehensive income
Revenue
Loss for the period
Other comprehensive income
Total comprehensive loss
31 Dec 2020
£ ‘000
410
(1,325)
-
(1,325)
Following the loss of control by Bango Plc of New Deep Limited (formerly Bango Deep Limited) recharges of £168,000 were issued
to New Deep Limited for transition support services. A total amount of £42,000 was outstanding as at 31 December 2020.
18 Earnings 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.
Earnings (basic) per share
Profit / (loss) attributable to equity holders of Bango PLC:
From continuing operations
From discontinued operations
Profit / (loss) attributable to equity holders of Bango PLC
2020
£ ‘000
743
3,932
4,675
2019
£ ‘000
(2,157)
(179)
(2,336)
Weighted average number of ordinary shares in issue
73,347,201
70,474,897
From continuing operations
From discontinued operations
Basic earnings / (loss) per share attributable to equity holders from continuing and
discontinued operations
1.01p
5.36p
6.37p
(3.07)p
(0.25)p
(3.32) p
(b) Diluted
Earnings (diluted) per share
Profit / (loss) attributable to equity holders of Bango PLC
Weighted average number of ordinary shares in issue
Options
Weighted average number of ordinary shares in issue (including options)
From continuing operations
From discontinued operations
Diluted earnings / (loss) per share attributable to equity holders from continuing and
discontinued operations
2020
£ ‘000
4,675
2019
£ ‘000
(2,336)
73,347,201
1,036,358
74,383,559
70,474,897
-
70,474,897
1.00p
5.29p
6.29p
(3.07)p
(0.25)p
(3.32) p
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 for the year ended 31 December 2019. 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.
65
Notes to the financial statements
19 Cash generated from / (used by) operations
Profit / (loss) for the financial year
From continuing operations
From discontinued operations
Depreciation, amortization and impairment
Taxation credit
Investment income
Interest payable
Share-based payment expense
Share of loss of associate
Gain on disposal of subsidiary
Loss on disposal of fixed assets
Gain on disposal of right of use assets
(Increase)/decrease in receivables
Decrease in payables
Corporation tax received
2020
£ ‘000
743
3,932
4,675
2,588
(136)
-
27
806
530
(4,847)
43
(43)
(991)
(142)
2,510
496
2019
£ ‘000
(2,157)
(179)
(2,336)
2,199
(740)
(12)
367
806
-
-
-
-
260
(297)
247
787
Net cash generated from operations
3,006
1,034
20 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 2020
£ ‘000
31 Dec 2019
£ ‘000
8,912
8,912
4,661
4,661
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 2020
£ ‘000
31 Dec 2019
£ ‘000
3,075
5,837
8,912
1,974
2,687
4,661
Financial liabilities included in the statement of financial position relate to the following IFRS 9 categories:
Financial liabilities measured at amortized cost
Total financial liabilities
31 Dec 2020
£ ‘000
31 Dec 2019
£ ‘000
1,668
1,668
4,213
4,213
66
Notes to the financial statements
These financial liabilities are included in the statement of financial position within the following headings:
Financial liabilities
Trade and other payables
Accruals
Lease liabilities
Total financial liabilities
21 Credit risk analysis
31 Dec 2020
£ ‘000
31 Dec 2019
£ ‘000
645
875
148
1,668
2,303
859
1,051
4,213
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 20.
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.
22 Liquidity risk analysis and capital management
Bango manages its liquidity needs by carefully monitoring cash outflows due in day-to-day business. Liquidity needs are monitored
in various time bands, on a day-to-day and week-to-week basis, as well as on a monthly basis. Long-term liquidity needs are identified
on a quarterly basis, taking account of operating activities and investing activities.
At 31 December 2020 Bango’s financial liabilities had contractual maturities which are summarized below:
Trade and other payables within 6 months
Right to use obligations within 12 months
Right to use obligations 1 year to 5 years
Financial liabilities
31 Dec 2020
£ ‘000
31 Dec 2019
£ ‘000
1,520
73
75
1,668
3,162
303
748
4,213
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 2020 Bango only had lease liabilities including liabilities related to the right of use assets.
23 Market risk analysis
23.1 Interest risk sensitivity
Bango has no bank 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.
67
Notes to the financial statements
23.2 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 Yen.
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.
31 Dec 2020
£’000
Financial
liabilities
£’000
Net assets/
(liabilities)
£’000
Financial
assets
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
£’000
Financial
assets
5,578
35
39
111
35
24
46
1,964
86
7,918
593
35
-
-
-
-
-
26
3
657
4,985
-
39
111
35
24
46
1,938
83
7,261
31 Dec 2019
£’000
Financial
liabilities
653
1,302
-
-
-
-
-
83
3
1,518
1,536
36
102
39
16
73
703
55
4,078
2,041
£’000
Net assets/
(liabilities)
865
234
36
102
39
16
73
620
52
2,037
Sensitivity analysis has been performed on the financial assets and liabilities to assess the exposure of the group to foreign exchange
movements. Profits are sensitive to changes in exchange rates primarily from USD and JPY denominated trade debtors and cash. The
Group’s exposure to other currencies is not significant. If exchange rates moved so that the sterling strengthened by 5% then the
profits of the group will be reduced by £330,000 and the effect on the statement of financial position would be a loss of £345,000.
68
Statement of financial position of Bango PLC
As at 31 December 2020
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 2020
£’000
31 Dec 2019
£’000
V
VI
VI
IX
VII
52,223
49,236
6,645
6,238
58,868
55,474
24
24
178
178
58,892
55,652
14,942
38,940
1,673
3,254
58,809
83
83
14,137
36,057
1,673
3,634
55,501
151
151
58,892
55,652
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 £1,186,000 (2019: £332,000).
These financial statements were approved and authorized for issue by the Directors on 15 March 2021 and are signed on their
behalf by:
Paul Larbey
Director
Company registration number 05386079
The notes on pages 72 to 76 are an integral part of these Company financial statements
69
Statement of changes in equity of Bango PLC
For the year ending 31 December 2020
Balance at 1 January 2020
Exercise of share options
Issue of shares
Share based payments
Transactions with owners
Loss for the year
Balance at 31 December 2020
Balance at 1 January 2019
Exercise of share options
Issue of shares
Share based payments
Transactions with owners
Loss for the year
Balance at 31 December 2019
Share
capital
£ ‘000
14,137
102
703
-
805
-
14,942
14,054
83
-
83
-
14,137
Share
premium
account
£ ‘000
Other
reserve
£ ‘000
36,057
395
2,488
-
2,883
-
38,940
35,797
260
-
260
-
36,057
1,673
-
-
-
-
-
1,673
1,673
-
-
-
-
1,673
Retained
earnings
£ ‘000
3,634
-
-
806
806
(1,186)
3,254
3,160
-
806
806
(332)
3,634
Total
£ ‘000
55,501
497
3,191
806
4,494
(1,186)
58,809
54,684
343
806
1,149
(332)
55,501
The notes on pages 72 to 76 are an integral part of these Company financial statements
70
Cashflow statement of Bango PLC
For the year ended December 2020
Loss for the year
Cash flows from operating activities
Increase in receivables
Increase/(decrease) in payables
Net cash used by operating activities
Cash flows from financing activities
Proceeds from 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
2020
£’000
2019
£’000
(1,186)
(332)
(2,434)
(68)
(3,688)
3,688
3,688
-
-
-
(109)
97
(344)
344
344
-
-
-
The notes on pages 72 to 76 are an integral part of these Company financial statements
71
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 2020, in accordance with International Accounting
Standards in conformity with the Companies Act 2006 (“IFRS”). 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. Investments are tested for impairment when events would
indicate that it might be impaired. Impairment is determined by assessing the recoverable amount of the investment. Where the
recoverable amount is less than the carrying amount, an impairment loss is recognized in profit or loss.
Associates
Associates are all entities over which the group has significant influence but not control or joint control. This is generally the case
where the group holds between 20% and 50% of the voting rights of an entity. Investments in associates are initially recognized at
cost. The carrying amount of equity-accounted investments 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.
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-Merton 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.
Other reserve
The other reserve represents the excess over nominal value for equity shares issued as part of a business acquisition where at least
90% of the entity is acquired and the initial present value of warrants issued over equity shares.
Retained earnings
Retained earnings include all current and prior period retained profits.
72
Notes to the financial statements
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 26. 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 £125,806 (31 December 2019: £136,429) 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.
IV. Employee benefit expenses
The employees of Bango Plc during the financial year were:
Non-executive directors
Executive directors
The aggregate payroll costs of the above of the non-executive directors are:
Wages and salaries
Social security costs
2020
No
2019
No
4
4
8
2020
£ ‘000
119
7
126
6
3
9
2019
restated
£ ‘000
124
12
136
The employee cost of executive directors are included in the subsidiary’s records and shown in the Group accounts in note 12.
V. Investments
Cost
Investment in subsidiary undertakings at 31 December 2019
Share based payments
Investment in subsidiary undertakings at 31 December 2020
Addition – investment in associate
Transfer of intangible assets to subsidiary
Investment in subsidiary undertakings and associates at 31 December 2020
At 31 December 2019
Fixed asset investments are shown at cost less provision for impairment.
£ ‘000
49,236
806
50,042
6,544
(4,363)
2,181
52,223
49,236
73
Notes to the financial statements
Details of subsidiary undertakings and associates at 31 December 2020 are as follows:
Country of
incorporation
Class of share
capital held
Held by the
company
Bango.net Limited 1
England & Wales
Ordinary
100%
Bango Movil 3
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
Spain
Brazil
Nigeria
Japan
USA
USA
USA
Ordinary
Ordinary
Ordinary
Ordinary
Common
Common
Common
Bango Resale Holding Limited
1
Bango Resale Limited 1
Bango Resale EU Limited 8
Bango Resale Limited 9
New Deep Limited 10
England & Wales
Ordinary
England & Wales
Ireland
Canada
England & Wales
Ordinary
Ordinary
Ordinary
Ordinary
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
40%
Nature of business
Development, marketing and
sale of technology for mobile
phone users to purchase
services for their mobile phones
Support for Bango.net Limited
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
Holding company
Trading entity in England
Trading entity in Ireland
Trading entity in Canada
Holding company
*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)
1 Botanic House, 100 Hills Road, Cambridge, CB2 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
8 43-49 Sir John Rogerson’s Quay, Dublin 2, Ireland
9 400 - 725 Granville Street, Vancouver, BC V7Y 1G5, Canada
10 2nd Floor Platinum Building, St John’s Innovation Park, Cambridge, CB4 0DS, United Kingdom
VI. Receivables
Amounts due from Group undertakings (due after one year)
Other receivables (due within one year)
31 Dec 2020
£ ‘000
31 Dec 2019
£ ‘000
6.645
24
6,669
6,238
178
6,416
An impairment review of intercompany receivables was undertaken in line with IFRS 9 “Financial Instruments” and the required
provision was considered immaterial to recognize.
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.
74
Notes to the financial statements
VII. Payables
Trade payables
Accruals
31 Dec 2020
£ ‘000
31 Dec 2019
£ ‘000
49
34
83
89
62
151
VIII. 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 2020
£ ‘000
31 Dec 2019
£ ‘000
6,669
6,669
6,416
6,416
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 2020
£ ‘000
31 Dec 2019
£ ‘000
24
178
6,645
6,669
6,238
6,416
31 Dec 2020
£ ‘000
31 Dec 2019
£ ‘000
83
83
151
151
These financial liabilities are included in the statement of financial position within the following headings:
Current financial liabilities
Trade payables
Accruals
Total financial liabilities
31 Dec 2020
£ ‘000
31 Dec 2019
£ ‘000
49
34
83
89
62
151
75
IX. Share capital
Allotted, called up and fully paid:
Ordinary shares of 20p each in Bango PLC
As at 31 December 2018
Exercise of share options
As at 31 December 2019
Issue of new shares
Exercise of share options
As at 31 December 2020
No
70,267,908
417,834
70,685,742
3,515,500
510,026
£ ‘000
14,054
83
14,137
703
102
74,711,268
14,942
During the year 510,026 share options were exercised at exercise prices between 43 pence and 173 pence and a par value of 20
pence per share. The total proceeds were £496,984 of which £102,005 was recognized as share capital and £394,979 as share
premium.
During the year 1,542,000 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 5,411,056 options were outstanding. Further details relating to employee share options are provided in note 7 in the
Group financial statements.
X. Related party
Subsidiary
Others
Purchases
from
31 Dec 2020 31 Dec 2019
£ ‘000
£’000
126
-
126
136
22
158
Receivables
outstanding
31 Dec 2020 31 Dec 2019 31 Dec 2020 31 Dec 2019
£ ‘000
Creditors
outstanding
£ ‘000
£’000
£’000
Subsidiary
7,193
5,192
548
7,193
5,192
548
171
171
Following the loss of control by Bango Plc of New Deep Limited (formerly Bango Deep Limited) recharges of £168,000 were issued
by Bango.Net Limited a subsidiary of Bango Plc to New Deep Limited for transition support services. A total amount of £42,000 was
outstanding as at 31 December 2020.
76