Crimson Tide plc Annual Report 2018

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FY2018 Annual Report · Crimson Tide plc

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6216mpro report for 2018_6216EBB Annual Report for 2018 10/06/2019 10:15 Page 1

Annual Report & Accounts 2018

www.mpro5.com

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What our customers say

‘We trust mpro5 and believe it is the way
forward for our business.’

‘mpro5 has become one of our standard
audit solutions.’

‘mpro5 gives our customers a better
experience as rather than filling out forms
everything is done through mpro5.’

‘mpro5 enables our management team to
really see what’s happening within the
business, thereby enabling us to deliver an
improved service to our clients.’

Copyright 2019, Crimson Tide plc
No content from this publication may be reproduced or transmitted in any form or by an means, electronic or mechanical including photocopying,
recording or any information storage and retrieval system, without permission from the senior management of Crimson Tide plc.

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2018 highlights

Financial Highlights
• Profit Before Tax ahead of market expectations

at £69k (2017: £309k) after significant new
investments in sales and marketing to accelerate
growth potential

• Turnover increased to £2.40m (2017: £2.28m)
reflecting higher percentage of SaaS contracts

• Equipment operating lease debt decreased by
over 40% to £376k (2017: £639k) with net funds
doubling to £237k (2017: £118k)

Operational Highlights
• mpro5’s Internet of Things and Time & Attendance

modules maturing and seeing first rollouts,
including temperature, humidity, lux, motion
sensors, NFC, fingerprint, and facial recognition

• New solutions sales channel offering data SIM,
Mobile Device Management, and managed
hardware subscription services

• Partner network contributing maiden revenues

in Rail sector

• NHS contracts expanding

Barrie Whipp, Executive Chairman of Crimson Tide, commented:
“A year of significant investment in new Sales & Marketing resource, whilst still

producing profitability and net cash, sees Crimson Tide well set for growth. mpro5

has evolved into a gold standard mobility system used in over 260,000 sites and is

poised for even wider opportunities”

contents

Strategic Report

Financial Review

Directors’ Report

Board of Directors

Chairman’s Statement

Chief Executive’s Review

Corporate Governance Statement

Independent Auditor’s Report to the Shareholders of Crimson Tide plc

Consolidated Income Statement for the year ended 31 December 2018

2
4
6
7
8
11
12
15
18
18 Consolidated Statement of Comprehensive Income for the year ended 31 December 2018
19 Consolidated Statement of Financial Position at 31 December 2018
20
Consolidated Statement of Changes in Equity at 31 December 2018
21
22
38 Company Statement of Financial Position at 31 December 2018
39
Company Statement of Changes in Equity at 31 December 2018
40 Company Statement of Cash Flows for the year ended 31 December 2018
41 Officers and Professional Advisors
42
Notice of Annual General Meeting
43

Consolidated Statement of Cash Flows for the year ended 31 December 2018

Notes to the Consolidated Financial Statements at 31 December 2018

Form of Proxy

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Chairman’s Statement

2018 was a year when the Board of Crimson Tide plc took the decision to increase the
Company’s sales and marketing effort quite dramatically, to allow us to create a platform for
increased growth in the future. We asked stakeholders to recognise that such investment
would be reflected in the bottom line profitability but that it would stand us well in the future.
Management expectations were for a break even result for the year. I am very pleased that, in
the light of adding some very senior sales people and their associated costs, as well as
increasing our marketing, we were not only profitable but exceeded market expectations.

We are very confident in our new sales team, consisting of director level appointments in
Partner sales, Enterprise sales and Solution sales and the team has already increased our
pipeline. Our first partner sales were reflected in a new sector to Crimson Tide, the rail industry,
where we completed transactions with Northern Rail and Chiltern Rail.

We have ambitious plans for growth with both IT channel and OEM partners, where we are
now recognised as a Solution Partner for Samsung. In Enterprise sales, we are focused on
larger transactions, including international opportunities. We have secured further business
from existing clients and are hopeful that our new offerings in solution sales, such as Mobile
Device Management, data SIMs and the Internet of Things (IOT) will open opportunities with
new and existing clients.

Our marketing efforts are seeing very positive results in terms of pipeline and the gearing that
these opportunities give us for 2019 and beyond are in excess of at any time in the past.

Internationally, we have restructured our Middle East efforts by appointing a partner to
manage the transactions that we have completed and to employ our sales representative in
the region. Our partner will manage existing contracts, first line support and will also market
mpro5 for us to its own client base. We continue to see interest in Northern Europe for mpro5
including some new interest in Scandinavia.

Our efforts in healthcare have been part of a longer strategy and we continue to see a wide
range of opportunity. We are currently enhancing mpro5 for people with autism and our pilots
for a global regulatory organisation have been a success, with a substantial increase in
reported cases of falsified medicines. We have also completed further work in the reporting of
clinical usage of a drug for the treatment of high cholesterol with a large American pharma
company. Healthcare business takes some time to come to fruition.

In terms of mpro5, our upgrade to the mobile application with our Apollo release has seen
further enhancements in terms of a Time & Attendance module, which has already been sold
to a number of clients and a significant upgrade in the underlying codebase allows even more
features and improved performance. This has now been followed by an upgrade to our web
infrastructure with Project 13, where we have modernised some of our core technologies on
Microsoft Azure.

mpro5 is continually improved by client feedback and our two major investments at present
are in location-based services and facial and fingerprint recognition. We continue to increase
our development staff to ensure that we remain at the cutting edge of both mobile and web
technologies.

Barrie Whipp
Executive Chairman
5 June 2019

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In many ways, the most exciting addition to mpro5 has been our Internet of Things module
and the certification of related sensors, gateways and network technologies. IOT is now
available with mpro5 with approved sensors for temperature, humidity, lux, CO2 and motion
sensors, which can trigger mpro5 Jobs and Flows automatically. We are experiencing high
levels of interest in mpro5 with IOT and now have a dedicated sales resource and presales
consultant.

Crimson Tide’s organogram now shows 34 members of staff. I recall that not more than a few
years ago this figure was 14. It shows that we have invested short term profits into growth;
mpro5 has never been more widely used, with over 260,000 sites benefitting from our
technology.

Financially, we grew at the turnover level, and increased the number of software only contracts.
Additions to base subscribers were good in the second half of 2018, a trend that has continued
into 2019. As I mentioned at the start of my statement, we took controlled risks in terms of
growth at the sales level with a view to a breakeven result and overachieved with a small profit.
Our cash position improved even in the light of over £250k of device finance repaid.

Operationally the day to day running of the business is now in the hands of Luke Jeffrey who,
with over a year in the role is now putting his own stamp on the organisation. In 2018 we
recruited Peter Hurter as Financial Controller and Peter will succeed Steve Goodwin as Finance
Director in 2019. Steve has agreed to remain as a Non-Executive Director.

During 2018, we recognised that we had the capacity to set a strategy for more investments
in the Company and that the investment in increased sales and marketing resource was going
to be an investment for the future, with associated costs now. The Board believes we took
the right decision. We have an enviable pipeline and our sales team is focused on delivery.
The Company is set well for the future.

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Chief Executive’s Review

Performance Overview

2018 was a year of significant investment and restructuring within our Sales & Marketing team,
both domestically and internationally.

I am incredibly excited with the opportunities created over the last year which has seen our
pipeline grow to a larger number of opportunities than ever before.

Although unexpected, and not forecast, I am pleased to confirm a PBT ahead of market
expectation despite this investment. This clearly illustrates both the robustness of our mpro5
SaaS platform offering, as well as the performance of the management team to manage that
investment carefully.

Investing for Growth

I am very pleased to welcome our new Solutions Sales Director and Enterprise Sales Director to
the fold, complementing our SME Sales Director, International Strategic Director, and Partner
Channel Director accordingly.

We are optimistic as to these additions opening new verticals and subscription offerings across
our entire customer base, whilst ensuring churn remains at its historical low point.

Lead generation has seen the introduction of automated marketing platforms alongside
the largest presence at industry-specific tradeshows that we have ever had. This has led to
the introductions of new customers and more importantly, partners for our Partner Channel
Director.

The Partner Channel is already bearing fruit despite its relative infancy after Q4 inception.
Partners are being recruited targeting both the SME and Enterprise, with the potential for
strategic partners at an even higher level.

Investing in Product

The mpro5 platform continues to be at the cutting-edge of mobile technology, with new
modules being added to mpro5 for Internet of Things (IoT) and Biometric Time and
Attendance accordingly.

The IoT offering, now mature, allows for any sensor to be connected to mpro5 directly or via
an API to automate the mpro5 mobile workflow platform. This has seen widespread interest
within the IoT community at the aforementioned trade shows and has led to a number of new
routes to market both for direct customers, and IoT sensor providers as partners.

The Biometric Time and Attendance module was our first foray into the world of biometrics,
and allows our mpro5 subscribers to use fingerprint scanning and facial recognition to prove
attendance at their locations. The mpro5 Time and Attendance module is also backed with
machine learning, allowing the system to ‘learn’ to better recognise users as their appearances
change over time. In this regard I believe this offering to be completely unique.

Summary

2018 has been a transitional year for the Company, we now have the building blocks in place
for future success and I look forward to growing our SaaS revenues accordingly over the
coming years.

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Our three core values are the driving force behind our business

Partnership Teamwork Dynamism

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Financial Review

Stephen Goodwin
Finance Director
5 June 2019

Financial Review

I am very pleased to comment on our results for the year to 31 December 2018.

As previously communicated, the Company’s strategy is one of continuing investment in the
growth of the business. In 2018 the Company re-invested the vast majority of its profits
generated from long term subscription contracts to achieve this aim. Human resources,
focused particularly on software development and future sales, were added throughout the
year along with targeted marketing expenditure. The Company has maintained a profit before
tax for the year of £69k (2017: £309k), better than the market’s expectation of breakeven, on
turnover up 5% to £2.40m (2017: £2.28m), reflecting more software-only contracts.

International subscribers are beginning to be added. To ensure the Company is positioned
to take full advantage of the opportunities that are emerging, further investment in the
Company’s international operations was made during 2018. This expenditure, along with the
higher other operating expenses noted above, have added over £300k more costs than in
2017, excluding amortisation and depreciation. The Company’s management keep close track
on this spend to ensure these investments are wisely targeted with the aim of achieving faster
growth in future years. Notwithstanding this expenditure, the Company has largely maintained
its cash balances, which totalled over £600k at the year end, whilst continuing to repay debt
used to finance mobile devices for subscribers. Borrowings decreased by over 40% to £376k
(2017: £639k) and net funds finished the year at £237k (2017: £118k).

Crimson Tide’s balance sheet remains healthy. Intangible fixed assets includes goodwill of
£0.8m (2017: £0.8m) and the cost of our mpro5 software, £1.1m at the 2018 year end (2017:
£0.9m). During the year, the underlying platform on which our mpro5 software operates
was upgraded and “Internet of Things” technology incorporated to further add to users’
capabilities. The Company believes this additional investment has already created new
opportunities including the ability to utilise sensor-based functionality.

The Group has previously not made fair value adjustments to intra-group loans denominated
in currencies other than Sterling as the amounts were considered immaterial. Due to the
decline in the value of Sterling to Euro in 2016, an adjustment to the fair value of intra-group
loans denominated in Euro has become necessary. The adjustment did not impact Earnings
per Share or Diluted Earnings per Share as reported in the prior year.

Future Prospects

Cash generation from organic business continues to be strong. Additional functionality and
international expansion is expected to accelerate long term contracted revenue growth.
Margins close to 90% and high operational gearing leads the Directors to believe that the
majority of these increased revenues will positively impact profit before tax. The market for
cloud, mobility and Internet of Things is undoubted and mpro5 provides clients with these fully
inclusive services on a subscription basis. With the planned addition of a new biometric time
and attendance module to mpro5 and an opportunity pipeline higher than ever before, the
Board is excited about the continuing development of the Company and its future prospects.

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Board of Directors

Barrie Reginald John Whipp (58)

Tobias ‘Toby’ James Turness Hawkins (38)

Executive Chairman
Barrie founded Crimson Tide in 1996 and he formulated the

Group Sales & Marketing Director
Toby joined Crimson Tide in October 2017 having held numerous

ideas behind the Group’s mobile data solutions in 2003. He is

sales roles in his career, most recently, Enterprise Account Director

responsible for setting the Group’s vision and strategy as well

for the OpenText Corporation. Previously he was Commercial

as setting goals and targets for the business. After an early career

Director for Stevens Group Ltd. which develops enterprise and

in finance and business administration with Dowell Schlumberger

SaaS software solutions. Toby is responsible for leading the sales

S.A. and UDS Group plc, Barrie joined Tiphook plc where he

and marketing teams and achieving the Group’s sales and growth

founded the financial services arm in 1986. He became Group

targets.

Managing Director of IAF Group plc, which was admitted to the

Official List in April 1994. He has served as a non-executive

Graham Basil Ashley (72)

Director of pump distributor Wills Group plc as well as a number

of private companies. Barrie is currently a non-executive Director

Non-Executive Director
Graham has over 40 years’ experience in stockbroking and

of Wey Education plc.

Luke Anthony Jeffrey (36)

corporate finance and was a founding Director and shareholder

of stockbrokers Greig Middleton Holdings Limited. Graham has

advised on acquisitions and disposals and fund-raisings across

Chief Executive Officer and Technical Director
Luke joined Crimson Tide from university in July 2005 having

a wide range of sectors and industries. Graham became a

Non-Executive Director of Crimson Tide Limited in April 2004.

achieved a Masters in Advanced Computing Science and has

Graham was appointed as a Director of A. Cohen & Co. Plc on

been regularly promoted since. He has made an invaluable

20 October 2004 and was Chairman from February 2005 until

contribution to the development of our mobility solutions and

the reverse acquisition of Crimson Tide Limited in August 2006.

been fully involved in many other software developments

Graham is Chairman of the Audit Committee.

delivered to customers. Luke joined the Board in July 2012

as Technical Director responsible for the continuing evolution

Robert Kenneth Todd (53)

and implementation of our software products and services.

In December 2016, Luke was promoted to Deputy Chief Executive

Non-Executive Director
Robert was appointed a Director of the Company in March 2015.

and became Chief Executive Officer in March 2018 responsible

He founded Todd Meat Trading Co Ltd in 1989 and is a Director

for the day to day management of the Group.

of that Company and a Director of United Foods Direct Limited

since 2012. Robert is Chairman of the Remuneration Committee.

Stephen Keith Goodwin (60)

Finance Director and Company Secretary
Steve served as Crimson Tide’s Chief Executive from April

2004 to August 2013 and is now the Group’s Finance Director

responsible for all financial matters. Steve is a Certified

Accountant with 30 years’ experience at Board level. After

training as an accountant working for Shell International, he

joined Tiphook plc in 1988 where he became Group Financial

Controller and later Finance Director of the trailer division.

In 1994 Steve was appointed Managing Director of the rail

division and in 1996 led the management team in a £30m

management buyout. The business was sold two years later to

GE Capital where he stayed on as Managing Director of GE’s

European rail business and gained further experience in

negotiating and integrating acquisitions.

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Directors’ Report

The Directors present their report and the audited financial statements of the Group for the year ended 31 December 2018.

Principal Activities
The principal activity of the Group during the period was the provision of mobility solutions and related software development.
The principal activity of the Company was to provide management and support to other Group companies.

Results and Dividends
The trading results for the year ended 31 December 2018 and the Group’s financial position at the end of the financial period are shown
in the attached financial statements. The statements have been prepared under International Financial Reporting Standards (“IFRS”).

Turnover for the year ended 31 December 2018 was £2,398,484 (2017: £2,275,326) and the total profit for the period after exceptional
items of £nil (2017: £44,000) and before taxation was £68,717 (2017: £315,179). The Directors do not recommend payment of a final
dividend.

Directors
The following Directors have held office during the year:

Name
B R J Whipp
L A Jeffrey
S K Goodwin
T J T Hawkins
G B Ashley
R K Todd

Position
Executive Chairman
Chief Executive Officer and Technical Director
Finance Director and Company Secretary
Group Sales and Marketing Director
Non-Executive Director
Non-Executive Director

Directors’ Interests in Shares
Directors’ interests in the share capital of the Company, including family and pension scheme interests, were as follows:

Director
B R J Whipp
S K Goodwin*
G B Ashley
R K Todd**
L A Jeffrey

Ordinary shares of £0.1p

31 December 2018
102,820,132
30,611,484
18,354,718
8,450,000
2,000,000

31 December 2017
102,820,132
30,611,484
18,354,718
8,450,000
2,000,000

* Mr. Goodwin also had an interest as a trustee in 9,150,000 Ordinary Shares of 0.1p each as at 31 December 2018 and 31 December 2017.

** Mr. Todd’s shareholding includes shares held in the Todd Meat Pension Fund of which Mr Todd is a beneficiary.

Directors’ interests in the share options, issued under the Group’s Enterprise Management Incentive Scheme, were as follows:

Director
S K Goodwin
L A Jeffrey

Number of Share options

31 December 2018
2,500,000
1,000,000

31 December 2017
2,500,000
1,000,000

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Directors’ Report CONTINUED

Directors’ interests in unapproved share options were as follows:

Director
B R J Whipp

Directors’ Remuneration
The remuneration of the Directors during the period is summarised below:

Number of Share Options

31 December 2018
2,500,000

31 December 2017
2,500,000

Fees and
salaries
£

6,000
-

131,750
26,000
97,724
95,000
-
356,474

Non-Executive
G B Ashley
R K Todd
Executive
B R J Whipp
S K Goodwin
T J T Hawkins
L A Jeffrey
S J Roberts
Total

Benefits
£

-
-

16,731
-
6,281
-
-
23,012

Pension
£

-
-

45,000
-
867
1,700
-
47,567

Total
2018
£

6,000
-

193,481
26,000
104,872
96,700
-
427,053

Total
2017
£

12,000
-

109,569
29,500
31,826
88,747
84,254
355,896

Mr Roberts resigned as Director on 30 September 2017. Mr Hawkins was appointed a Director on 17 October 2017.

Significant Shareholdings
As at 24 May 2019 the shareholders’ register showed that the following shareholders had interests in 3% or more of the share capital of
the Company:

Shareholder
B R J Whipp
Helium Special Situations Fund
S K Goodwin
J W F Roth
Lion Trust Investment Partners LLP
S J M Morris
G B Ashley

Financial Risk and Capital Management
The Company’s exposure to financial risk is set out in note 17
to the accounts.

Crimson Tide maintains a strong focus on working capital
management.

Policy on Payments to Suppliers
It is the policy of the Company in respect of all its suppliers, where
reasonably practicable, to settle the terms of payment
with those suppliers when agreeing the terms of each transaction,
to ensure that those suppliers are made aware of the terms of
payment, and to abide by those terms. The number of trade
creditor days outstanding at the period end for the Group was
26 days (2017: 48 days). The Company is a holding company
and has no significant trade creditors.

Ordinary shares currently
held as at 24 May, 2019
102,820,132
86,600,106
30,611,484
26,131,159
22,942,885
21,707,817
18,354,718

Percentage of
issued share capital
22.6%
18.9%
6.7%
5.7%
5.0%
4.8%
4.0%

Health, Safety and the Environment
Crimson Tide operates responsibly with regard to its shareholders,
the environment and the wider community. The Group and
Company are committed to the well-being of all employees and
ensure that their health, safety and general welfare is paramount at
all times. We also maintain open and fair relationships with all clients
and suppliers while ensuring that all transactions are operated on
an arm’s length, commercial basis.

Political and Charitable Contributions
No political or significant charitable donations were made during
the period.

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Directors’ Report CONTINUED

Statement of Directors’ responsibilities
The Directors are responsible for preparing the Annual Report and
the financial statements in accordance with applicable law and
regulations.

UK Company law requires the Directors to prepare Group and
Parent Company financial statements for each financial year.
Under that law the Directors are required to prepare the Group
financial statements in accordance with International Financial
Reporting Standards (“IFRS”) as adopted by the European Union
and applicable law and have also elected to prepare the Company
financial statements in accordance with IFRSs as adopted by the
European Union and applicable law. 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 Group and Parent Company and of the profit or loss of the
Group for that period.

In preparing these financial statements, the Directors are required
to:

• select suitable accounting policies and then apply them

consistently;

• make judgements and estimates that are reasonable and

prudent;

Website publication
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.

Disclosure of information to the auditors
In the case of each of the persons who were Directors of the
Company at the date when this report was approved:

- so far as each of the Directors is aware, there is no relevant audit
information (as defined in the Companies Act 2006) of which the
Company’s Auditors are unaware; and

- each of the Directors has taken all the steps that he/she ought to
have taken as a Director to make himself/herself aware of any
relevant audit information (as defined) and to establish that the
Company’s Auditors are aware of that information.

Independent auditors
Shipleys LLP has indicated its willingness to remain in office and a
resolution to reappoint Shipleys LLP as auditors will be proposed at
the Annual General Meeting.

• state whether they have been prepared in accordance with IFRSs

Signed by order of the Board

as adopted by the European Union, subject to any material
departures disclosed and explained in the financial statements;
and

• prepare the financial statement on the going concern basis
unless it is inappropriate to presume that the Group and the
Parent Company will continue in business.

The Directors are responsible for keeping adequate accounting
records that are sufficient to show and explain the Parent
Company’s transactions and disclose with reasonable accuracy at
any time the financial position of the Parent Company and enable
them to ensure that the financial statements comply with the
Companies Act 2006. They are also responsible for safeguarding
the assets of the Company and hence for taking reasonable steps
for the prevention and detection of fraud and other irregularities.

Stephen Goodwin
Company Secretary
5 June 2019

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Strategic Report
FOR THE YEAR ENDED 31 DECEMBER 2018

Strategy and objectives
The Company’s strategy is to continue to develop its mobility
solutions and grow the contracted number of subscribers
currently using its mpro5 service. In doing so, the targeted
objectives of:

Key performance indicators
Crimson Tide management use a number of KPIs to measure
the performance of the business and to assess current trends.
These statistics are regularly reviewed and action is taken by
management as appropriate.

• Increased contracted revenues

• Strengthened cashflows

• Geographical expansion

• Increased profitability

• Higher returns for stakeholders

will be achieved. The Company plans to continue to re-invest its
profits in 2019 to grow the Company more significantly in the
coming years.

Business model
The Crimson Tide group provides its mpro5 software, sometimes
with a handheld mobile device or tablet, to subscribers who
typically contract for three or more years. Crimson Tide incurs
the up-front costs of software development and investment in
equipment, such as smartphones, sensors, tags, etc. and recovers
these costs as quickly as possible over the contract term.

The group is operationally geared with relatively fixed overheads
so an increasing proportion of turnover growth favourably
impacts profitability and net cashflow.

Review of the business
A review of the year and future developments are given in the
Chairman’s Statement, Chief Executive’s Review and Financial
Review on pages 2, 4 and 6 respectively.

At 31 December 2018 Crimson Tide had a total of 28 directors
and employees analysed as follows:

Directors
Senior Managers
Other employees

Male
6
3
15

Female
-
-
4

Other measures used by management to ensure the Group is
likely to perform as forecast include; expected contract wins,
renewal rates and losses, and sales opportunity pipeline.
The Group uses Microsoft Dynamics as its customer relationship
management system to record and monitor dealings with
customers and potential new clients.

Principal risks and uncertainties
The Board of Directors and management team continually review
key performance indicators and business trends, as well as
regular financial information, to help identify future risks and
uncertainties in the business.

The principal risks and uncertainties facing the business remain
unchanged as they potentially stem from attempts to accelerate
growth, for example by increasing spending on marketing and
people. However, operating cashflows generated by our growing
contracted subscriber book, provide increasing amounts of cash
to re-invest in the business. Furthermore, the finance facilities
offered by NatWest and Lombard provide additional means to
fund new devices if required, and accelerate growth

Signed on behalf of the Directors

Barrie Whipp
Executive Chairman
5 June 2019

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Corporate Governance Statement

This statement has been written by Chairman of the Board of
Directors of Crimson Tide plc.

The Board is committed to sound Corporate Governance and
have adopted the Quoted Companies Alliance (QCA) Corporate
Governance Code in line with the London Stock Exchange’s
recent changes to the AIM Rules requiring all AIM-listed
companies to adopt and comply with a recognised corporate
governance code.

The Company believes the code is essential to foster business
integrity and shareholders trust in the Board. High standards of
Corporate Governance are a key priority of the Board and details
of how the Company addresses key governance issues are set
out here by reference to the 10 principles of Corporate
Governance developed by the Quoted Companies Alliance.

1. Establish a Strategy and Business Model
The Board should express a shared view of the Company’s vision
and strategy, including detail of:
• what the Company is working to achieve;
• the period in which its objectives are to be achieved; and
• what is required to achieve these objectives.

This view should be well communicated, both internally and
externally.

Compliance
Crimson Tide’s vision is to invest in and develop mpro5 to
deliver long term, sustainable growth in revenues, profits and
shareholder value. The Company places particular focus on
the quality of mpro5, its relationships with clients, staff and
stakeholders. The Directors believe that mpro5 can improve
operations and efficiency for a broad range of organisations,
particularly in logistics, facilities management and healthcare.
The Company seeks to grow its revenues consistently, taking
advantage of the high margin it achieves. The Company has a
three-year business plan reflecting expansion including in its
home territory and overseas.

Crimson Tide has sufficient resources to grow the business
further. The retention of existing staff is an area of high focus and
recruitment of further employees will occur as the Company grows.

The Boards strategy and business model is set out each year in
the Company’s annual report, with updates provided in the full
year and half year financial results

2. Meeting the needs and objectives of our Shareholders
Directors should develop a good understanding of the needs
and expectations of the Company’s shareholders, as well as the
motivations behind shareholder voting decisions. No Board ever
wants to find itself in a position where it is voted down by
shareholders. Accordingly, it is in the interests of the Company
to understand the view of shareholders before a potentially

controversial or unusual proposal is put to them. Companies with
a dominant shareholder must be particularly aware of the need
to hear the voices of and protect the interests of minority
shareholders and must therefore consider whether it is necessary
to put in place contractual arrangements such as a relationship
agreement.

Compliance
The Board is aware of the need to protect the interests of all
shareholders. It seeks to balance the interests of small share-
holders with those of more substantial shareholders. The Board
comprises Directors with substantial holdings and small holdings.

The Board consists of the Chairman, three executive directors and
two non-executive directors. Board meetings are held at least
four times a year.

Crimson Tide plc publishes all relevant material, according to
QCA definitions, on its website. This includes annual reports and
shareholder circulars.

Shareholder Communication
The Group seeks to ensure that all shareholders are kept
informed about the Group and its activities. A comprehensive
annual report and accounts and an interim report are made
available to share-holders on the Group’s website and sent to
those shareholders requesting a paper copy. The Annual General
Meeting is a forum for shareholders’ participation with the
opportunity to meet and question Board members including the
non-executive members and the Chairmen of the Board commit-
tees. Additionally, the Group operates an investors’ section on its
website to provide further details of the Group’s activities.

3. Taking into account wider Stakeholder and social
responsibilities
Good governance includes the Board considering the Company’s
impact on society, the community and the environment. Every
company should consider its corporate social responsibilities
(CSR). Any CSR policy should include narrative on social and
environmental issues and should show how these are integrated
into the Company’s strategy. Integrating CSR into strategy will
help create long term value and reduce risk to shareholders and
other stakeholders.

Compliance
The Directors are aware of the impact the business activities have
on the communities in which the Group's businesses operate.
The Company does not discriminate based upon race, religion,
age or gender.

The Group's responsibilities to stakeholders including staff,
suppliers and customers and wider society are also recognised.
The Company is a respected employer and member of the
community.

6216mpro report for 2018_6216EBB Annual Report for 2018 10/06/2019 10:15 Page 15

The environmental impact of the Group's activities is carefully
considered, and the maintenance of high environmental
standards applied. The Company operates a low paper strategy,
recycles where possible and aims to be Carbon neutral.

4. Embed effective risk management, considering both
opportunities and threats
The Board is responsible for putting in place and communicating
a sound system to manage risk and implement internal control.
The management of risk is an essential business practice. Boards
are expected to balance risk and return, threat and opportunity.
Setting strategy includes determining the extent of exposure to
the critical risks the Company is willing and able to bear.

Compliance
The Board has established Audit and Remuneration Committees.
Given the current size of the Company and the Board, the Board
do not consider it necessary yet to create either a Nominations
Committee or a Legal Matters Committee with relevant matters
either dealt with by the Board or delegated accordingly.
The annual budget setting process examines all areas of the
Company’s operations both operationally and financially.
Crimson Tide plc receives regular feedback from its external
auditors on the state of its internal controls.

The Board regularly reviews potential risks at Board Meetings and
the Executive Directors regularly monitor KPIs.

5. Maintain the Board as a well-functioning, balanced Team
led by The Chair
The Board should not be dominated by one person or a group of
people. The Board must not be so large as to prevent efficient
operation but must not be too small to be ineffective. The Board
should be balanced between executive and non-executive directors
and should have at least two independent non-executive directors.

Compliance
The Board is comprised of the Chairman, three executive
Directors and two non-executive Directors.

Whilst the Company is guided by the provisions of the Combined
Code in respect of the independence of directors, it gives regard
to the overall effectiveness and independence of the contribution
made by directors to the Board in considering their
independence and does not consider a director’s period of
service in isolation to determine their independence.

Crimson Tide plc has appointed two non-executive directors who
provide an independent view of the Company's activities. Mr
Robert Todd is the Senior Independent Non-Executive Director.
Mr Graham Ashley is a Non-Executive Director. By his length of
tenure, Mr Ashley does not fulfil the technical definition of
“Independent” as he has served as a director for longer than the
prescribed nine years. The Board unanimously supports the

retention of Mr Ashley given his experience and wise counsel.
Both Mr Todd and Mr Ashley are shareholders in the Company.

In exceptional cases a non-executive may also be appointed to
represent the interests of a major shareholder where the Board is
satisfied that he or she has the requisite experience and is fully
aware of his or her fiduciary duty to act in the wider interests of
shareholders as a whole.

The Board do not consider that the Company currently has a
dominant shareholder where special contractual arrangements
would be necessary to protect the interests of minority
shareholders.

Appointments continue subject to re-election by shareholders at
the Annual General Meeting. Non-executive directors must stand
for election at the first Annual General Meeting after appointment
and then every third anniversary, for nine years. After nine years
service, each independent director must be re-elected every year.
If not re-elected, the appointment is terminated automatically
with immediate effect. If appointment is terminated for any
reason, there is no entitlement to redundancy or compensation
for unfair dismissal.

6. Ensuring that between them the Directors have the
necessary up-to-date experience, skills and capabilities
The Board must have an appropriate balance of functional and
sector skills and experience. The Board should be supported by
committees (audit, remuneration, nomination and others) that
have the necessary character, skills and knowledge to discharge
their duties and responsibilities effectively.

Compliance
Directors who have been appointed to Crimson Tide plc have
been chosen because of the skills and experience they offer. Full
biographical details of the Directors are included within the
website.

As noted above, Crimson Tide plc has put in place Audit and
Remuneration committees.

Formal terms of reference have been agreed for all Board
Committees and can be found on the Company’s website and
the Annual Report.

7. Evaluate Board Performance Based On Clear And Relevant
Objectives, Seeking Continuous Improvement
The Board should periodically review its performance, as well as
the performance of its Board committees and the performance of
individual Board members. Performance appraisal may include
external review and may also identify development needs.

The Board should ensure that it possesses the skills and
experience to meet present and future business needs. Ineffective
directors (whether executive or non-executive) must be identified,
supported to become effective and, if that is not possible,

6216mpro report for 2018_6216EBB Annual Report for 2018 10/06/2019 10:15 Page 16

Corporate Governance Statement CONTINUED

replaced. Review, development and mentoring of directors and
the wider management team are very important.

It is healthy for membership of the Board to be periodically
refreshed, regardless of performance issues.

Succession planning is a vital task for Boards. No member of the
Board should become indispensable. How well succession is
managed (particularly of the chairman and the chief executive)
represents a key measure of the effectiveness of a Board.

Compliance
Crimson Tide plc undertakes regular monitoring of personal and
corporate performance using agreed key performance indicators
and detailed financial reports. Responsibility for assessing and
monitoring the performance of the executive directors lies with
the independent non-executive directors.

Key performance indicators (KPIs) include, underlying pre-tax
profit, cash generation, return on investment and earnings per
share. Agreed personal objectives and targets including financial
and non-financial metrics are set each year for the executive
directors and performance measured against these metrics.

New executive and non-executive directors, taking into account
succession planning, are appointed when deemed appropriate by
the Board.

Crimson Tide has an Executive Chairman and CEO. During 2018
the CEO was promoted to the role and took over responsibility
for managing and executing the Board’s plan and is in charge of
all day to day management of the business, supported by a
management team. The Executive Chairman retains responsibility
for product vision, corporate finance and City matters in line with
his experience. It is anticipated that the Chairman position will
become Non-Executive in a timescale appropriate to the CEO’s
development. As the CEO has only recently been appointed and
is in his thirties, further succession planning has not been
undertaken at this time.

8. Promote a corporate culture that is based on ethical
values and behaviours
Crimson Tide plc operates responsibly with regard to its
shareholders, employees, other stakeholders, the environment
and the wider community.

The Group is committed to the wellbeing of all employees and
ensures that their health, safety and general welfare is paramount
at all times.

We also maintain open and fair relationships with all clients and
suppliers while ensuring that all transactions are operated on an
arm’s length, commercial basis.

As part of this culture, the Group ensures that all suppliers are
paid in a timely fashion, unless there are sound commercial
reasons why payment should not be made.

9. Maintain governance structures and processes that are fit
for purpose and support good decision-making by the
Board
Crimson Tide plc should determine governance structures and
processes appropriate to it, based on:
• corporate culture;
• size;
• the capacity and appetite for risk and the tolerances of the
Company;
• business complexity
There should be a clear statement as to how the Company
intends to fulfil its objectives. The Company’s governance
structures should evolve in parallel with the Company’s strategy
and business.

Compliance
Details of the Company's corporate governance arrangements
are provided on this page and in the Corporate Governance
section of its website.

10. Communicate how the Company is governed and is
performing by maintaining a dialogue with Shareholders
and other relevant Stakeholders
A healthy dialogue should exist between the Board and all of its
shareholders to enable shareholders to come to informed
decisions about the company.

Appropriate communication and reporting structures should exist
between the Board and all constituent parts of its shareholder
body.

This will assist:

• the communication of shareholders’ views to the Board;

• shareholders’ understanding of the unique circumstances and
constraints faced by that company.

Compliance
The Board attaches great importance to providing shareholders
with clear and transparent information on the Group's activities,
strategy and financial position. Details of all shareholder
communications are provided on the Company’s website.

The Board holds regular meetings with larger shareholders and
regards the annual general meeting as a good opportunity to
communicate directly with shareholders via an open question
and answer session.

Crimson Tide plc lists contact details on its website and on all
announcements released via RNS, should shareholders wish to
communicate with the Board.

6216mpro report for 2018_6216EBB Annual Report for 2018 10/06/2019 10:15 Page 17

Independent Auditor’s Report to the Shareholders of Crimson Tide plc

WHO WE ARE REPORTING TO
This report is made solely to the Company’s members, as a body,
in accordance with Chapter 3 of Part 16 of the Companies Act
2006. Our audit work has been undertaken so that we might state
to the Company’s members those matters we are required to state
to them in a Report of the Auditor and for no other purpose. To
the fullest extent permitted by law, we do not accept or assume
responsibility to anyone other than the Company and the
Company’s members as a body, for our audit work, for this report,
or for the opinions we have formed.

CONCLuSIONS RELATING TO GOING CONCERN
We have nothing to report in respect of the following matters in
relation to which the ISAs (UK) require us to report to you where:

• the Directors’ use of the going concern basis of accounting in

the preparation of the financial statements is not appropriate; or

• the Directors have not disclosed in the financial statements any
identified material uncertainties that may cast significant doubt
about the Group’s ability to continue to adopt the going
concern basis of accounting for a period of at least twelve
months from the date when the financial statements are
authorised for issue.

OuR ASSESSMENT OF RISKS OF MATERIAL MISSTATEMENT
The assessed risks of material misstatement described below
are those that had the greatest effect on our audit strategy, the
allocation of resources in the audit and directing the efforts of
the engagement team.

OPINION
We have audited the financial statements of Crimson Tide plc
(the ‘Parent Company’) and its subsidiaries (the ‘Group’) for the
year ended 31 December 2018 which comprise the Consolidated
Income Statement, Consolidated Statement of Comprehensive
Income, Consolidated and Company Statement of Financial
Position, Consolidated and Company Statement of Changes in
Equity, Consolidated and Company Cash Flow Statement and
related notes including a summary of significant accounting
policies. The financial reporting framework that has been applied in
their preparation is applicable law and International Financial
Reporting Standards (IFRSs) as adopted by the European Union and,
as regards the Parent Company financial statements, as applied in
accordance with the provisions of the Companies Act 2006.

In our opinion:

• the financial statements give a true and fair view of the state
of the Group’s and of the Parent Company’s affairs as at
31 December 2018 and of the Group’s profit for the year then
ended;

• the Group financial statements have been properly prepared in
accordance with IFRSs as adopted by the European Union;

• the Parent Company financial statements have been properly

prepared in accordance with IFRSs as adopted by the European
Union and as applied in accordance with the provisions of the
Companies Act 2006; and

• the financial statements have been prepared in accordance with

the requirements of the Companies Act 2006.

BASIS FOR OPINION
We conducted our audit in accordance with International
Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our
responsibilities under those standards are further described in the
Auditors’ responsibilities for the audit of the financial statements
section of our report. We are independent of the Group in
accordance with the ethical requirements that are relevant to our
audit of the financial statements in the UK, including the FRC’s
Ethical Standard as applied to listed entities, and we have fulfilled
our other ethical responsibilities in accordance with these
requirements. We believe that the audit evidence we have obtained
is sufficient and appropriate to provide a basis for our opinion.

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Independent Auditor’s Report to the Shareholders of Crimson Tide plc
CONTINUED

Risk

How the scope of our audit responded to the risk

Management override of controls

Journals can be posted that significantly alter the Financial
Statements.

Going Concern

There is a risk that the company may hold insufficient working
capital to allow it to meet its financial obligations as they fall due
thus giving rise to a going concern risk.

We examined journals posted around the year end, specifically focusing
on areas which are more easily manipulated such as accruals,
prepayments, bank reconciliations and tax.

Existing cash reserves have been evidenced and future cashflow forecasts
have been reviewed to ensure sufficient cash headroom exists for a period
of at least one year from the date of approving these financial statements.
The Group is committed to investing in new opportunities to grow the
business.

Fraud in Revenue Recognition

There is a risk that revenue is materially understated due to
fraud.

Income was tested on a sample basis and we concluded that no evidence
of fraud or other understatement was identified.

Risk of material misstatement within related party transactions

There is the risk that related party transactions are potentially
incomplete or materially misstated.

Correspondence, including Board Minutes, and accounting records were
reviewed for evidence of material related party transactions and it is
considered that all relevant items have been disclosed. Intercompany
balances were tested and found to be recorded correctly.

Our audit procedures relating to these matters were designed in
the context of our audit of the Financial Statements as a whole,
and not to express an opinion on individual accounts or
disclosures. Our opinion on the Financial Statements is not
modified with respect to any of the risks described above, and
we do not express an opinion on these individual matters.

OuR APPLICATION OF MATERIALITY
We define materiality as the magnitude of misstatement in the
Financial Statements that makes it probable that the economic
decisions of a reasonably knowledgeable person would be
changed or influenced. We use materiality both in planning and
in the scope of our audit work and in evaluating the results of
our work.

We determine materiality for the Group to be £64,190 and this
financial benchmark, which has been used throughout the audit,
was determined by way of a standard formula being applied to
key financial results and balances presented in the Financial
Statements. Where considered relevant the materiality is adjusted
to suit the specific area risk profile of the Group.

OTHER INFORMATION
The Directors are responsible for the other information. The other
information comprises the information in the Group Strategic
Report and the Directors Report, but does not include the
financial statements and our Report of the Auditors thereon.

Our opinion on the financial statements does not cover the other
information and we do not express any form of assurance
conclusion thereon.

In connection with our audit of the financial statements, our
responsibility is to read the other information and, in doing so,
consider whether the other information is materially inconsistent
with the financial statements or our knowledge obtained in the
audit or otherwise appears to be materially misstated. If we
identify such material inconsistencies or apparent material
misstatements, we are required to determine whether there is a
material misstatement in the financial statements or a material
misstatement of the other information. If, based on the work we
have performed, we conclude that there is a material misstatement
of this other information, we are required to report that fact.
We have nothing to report in this regard.

OPINION 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 Group 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 Group 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 its environment obtained in the course
of the audit, we have not identified material misstatements in the
Group Strategic Report or the Directors Report.

6216mpro report for 2018_6216EBB Annual Report for 2018 10/06/2019 10:15 Page 19

We have nothing to report in respect of the following matters
where 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 Statement of Directors’
Responsibilities set out on page 11 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 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.

OuR 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 a
Report of the Auditors that includes our opinion. Reasonable
assurance is a high level of assurance, but is not a guarantee that
an audit conducted in accordance with ISAs (UK) will always detect
a material misstatement when it exists. Misstatements can arise
from fraud or error and are considered material if, individually or
in the aggregate, they could reasonably be expected to influence
the economic decisions of users taken on the basis of these
financial statements.

A further description of our responsibilities for the audit of the
financial statements is located on the Financial Reporting Council’s
website at www.frc.org.uk/auditorsresponsibilities. This description
forms part of our Report of the Auditors.

JOSEPH KINTON (Senior Statutory Auditor)
For and on behalf of SHIPLEYS LLP Chartered Accountants and
Statutory Auditor
10 Orange Street Haymarket London WC2H 7DQ
5 June 2019

6216mpro report for 2018_6216EBB Annual Report for 2018 10/06/2019 10:15 Page 20

Consolidated Income Statement
FOR THE YEAR ENDED 31 DECEMBER 2018

Total Revenue
Cost of sales

Gross Profit
Total operating expenses
Exceptional item

Profit from operations

Interest Income

Interest payable and similar charges

Profit before taxation

Taxation

Profit for the year available to
equity holder of parent

Notes

Earnings per share
Basic earnings per
ordinary share (pence)

Diluted earnings per

ordinary share (pence)

Year ended
31 December
2018

£000
2,398
(324)

2,074
(1,965)
-

109

(40)

Year ended
31 December
2017
As restated - Note 19
£000
2,275
(231)

2,044
(1,640)
(44)

360

(51)

309

(5)

304

Year ended
31 December
2018

Year ended
31 December
2017

0.02

0.01

0.07

Consolidated Statement of Comprehensive Income
FOR THE YEAR ENDED 31 DECEMBER 2018

Net Profit for the year

Other comprehensive income/(loss) for the year:

Exchange differences on translating foreign operations

Total comprehensive profit for the year

Year ended
31 December
2018

Year ended
31 December
2017
As restated - Note 19

Notes

£000

£000
304

309

6216mpro report for 2018_6216EBB Annual Report for 2018 10/06/2019 10:15 Page 21

Consolidated Statement of Financial Position
AT 31 DECEMBER 2018

Notes

Assets

Intangible assets

Equipment, fixtures & fittings

Total non-current assets

Inventories

Trade and other receivables

Cash and cash equivalents

Total current assets

Total Assets

Equity and liabilities

Share capital

Share premium

Other Reserves

Reverse acquisition reserve

Retained earnings

Total equity

Trade and other payables

Amounts falling due within one year

Amounts falling after more than one year

Total liabilities

Total equity and liabilities

As at
31 December

2018

As at
31 December

2017

As at
1 January

2017

As restated - Note 19

£000

1,904

401

2,305

935

613

1,563

3,868

457

148

478

(5,244)

7,081

2,920

723

225

948

3,868

£000

1,698

611

2,309

974

757

1,739

4,048

454

121

478

(5,244)

7,012

2,821

868

359

1,227

4,048

£000

1,522

750

2,272

636

878

1,521

3,793

453

112

473

(5,244)

6,708

2,502

769

522

1,291

3,793

The financial statements were approved by the board of directors on 5 June 2019 and are subject to the approval of the shareholders
at the Annual General Meeting on 28 June 2019 and signed on its behalf by:

B R J Whipp
Director

S K Goodwin
Director

Company registration number: 00113845

6216mpro report for 2018_6216EBB Annual Report for 2018 10/06/2019 10:15 Page 22

Consolidated Statement of Changes in Equity
AT 31 DECEMBER 2018

Group

£000

Share
capital

Share
premium

Other
reserves

Reserve
acquisition
reserve

Retained
earnings

Total

Balance as at 1 January 2017 as previously stated

Prior year adjustment - Note 19

Balance as at 1 January 2017 as restated

Retained profit for the year

Share options exercised
Translation movement
Prior year adjustment - Note 19

453

Balance as at 31 December 2017 as restated

454

Retained profit for the year

Share options exercised

Balance as at 31 December 2018

457

112

121

422

473

(1)
6

478

(5,244)

6,759

(51)

6,708

310

(6)

7,012

2,502

310

10
(1)
-

2,821

148

478

(5,244)

7,081

2,920

6216mpro report for 2018_6216EBB Annual Report for 2018 10/06/2019 10:15 Page 23

Consolidated Statement of Cash Flows
FOR THE YEAR ENDED 31 DECEMBER 2018

Year ended
31 December
2018

Year ended
31 December
2017
As restated - Note 19

Cash flows from operating activities
Profit before taxation

Adjusted for:
Amortisation of intangibles

Depreciation of equipment, fixtures and fittings
Unrealised currency translation losses
Net interest expense

Operating cash flows before movement in working capital

Increase in inventories

Decrease / (increase) in trade and other receivables

(Decrease) / increase in trade and other payables

Cash generated from operating activities

Taxes paid

Net cash generated from operating activities

Cash flows used in investing activities

Purchases of fixed assets

Development expenditure capitalised

Net cash used in investing activities

Cash flows from financing activities

Net proceeds from share issues
Interest paid

Net decrease in borrowings

Net cash from financing activities

Net decrease in cash and cash equivalents

Net cash and cash equivalents at beginning of period

Net cash and cash equivalents at end of period

Analysis of net funds:

Cash and cash equivalents

Bank overdraft

Other borrowing due within one year

Borrowings due after one year

Net funds

£000

141

243
-
40

493

(7)

(15)

541

(32)

509

(33)

(347)

(380)

30
(40)

(263)

(273)

(144)

757

613

(151)

(225)

237

£000
309

120

274
6
51

760

(1)

(338)

143

564

(5)

559

(136)

(295)

(431)

10
(51)

(189)

(230)

(102)

859

757

(280)

(359)

118

6216mpro report for 2018_6216EBB Annual Report for 2018 10/06/2019 10:15 Page 24

Notes to the Consolidated Financial Statements
AT 31 DECEMBER 2018

A) Corporate information
Crimson Tide plc (the “Company”) is a public limited company
incorporated and domicile in the United Kingdom. The address
of the registered office is Oakhurst House, 77 Mount Ephraim,
Tunbridge Wells, Kent TN4 8BS. Crimson Tide plc’s shares are
publicly traded on the Alternative Investment Market of the
London Stock Exchange (AIM).

B) Basis of consolidation
The consolidated financial statements of the Company for the
year ended 31 December 2018 comprise the Company and its
subsidiaries (together referred to as the “Group”).

On an acquisition, fair values are attributed to the Group’s share
of net assets. Where the cost of acquisition exceeds the values
attributable to such net assets, the difference is treated as
purchased goodwill, which is capitalised and subjected to annual
impairment reviews. The results of acquired companies are
brought in from the date of their acquisition.

C) Basis of preparation
The consolidated financial statements of Crimson Tide plc
have been prepared in accordance with applicable law and
International Financial Reporting Standards incorporating
International Accounting Standards and Interpretations
(collectively “IFRS”) as endorsed by the European Union.

The financial statements have been prepared on the historical
cost basis except for certain assets and liabilities which have been
measured at fair value. Non-current assets are stated at the lower
of carrying amount and fair value less costs to sell.

The financial statements are presented in UK sterling and have
been prepared on a going concern basis.

The preparation of financial statements in conformity with
generally accepted accounting principles requires the use of
estimates and assumptions that affect the reported amounts
of assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the
reporting period. Although these estimates are based on
management’s best knowledge of the amount, event or actions,
actual results ultimately may differ from those estimates.

The estimates and underlying assumptions are reviewed on an
ongoing basis. Revisions to accounting estimates are recognised
in the period in which the estimate is revised if the revision affects
only that period, or in a period of the revision and future periods
if the revision affects both current and future periods.

The accounting policies set out below have been applied
consistently by Group entities to all periods presented in these
consolidated financial statements, except where noted.

D) Significant judgements and major causes of estimation

uncertainty

As noted above, the Group makes estimates and assumptions
concerning the future. Those that have a significant risk of
causing a material adjustment to the carrying amounts of assets
and liabilities within the next financial year are addressed below.

i) Estimated impairment of goodwill

The Group tests semi-annually whether goodwill has suffered
any impairment in accordance with the accounting policies
stated in Notes G ii) and H) below. The recoverable amounts
of cash generating units have been determined based on
value-in-use calculations requiring the use of estimates.

ii) Fair value of development costs

Research costs are not capitalised. Development costs,
however, are capitalised from the point that it is sufficiently
certain that future economic benefits to the Group will cover
all selling, administration and support costs as well as the
development costs themselves. The Board will continue to
review the nature of the Group’s development activities on an
ongoing basis and consider whether the conditions are being
satisfied. Development costs include work completed on
mobility software applications.

E) Changes in accounting policy
The accounting policies are the same as those applied in the
Group’s consolidated financial statements as at and for the year
ended 31 December 2017 with the exception of new accounting
policies in respect of IFRS 9 Financial Instruments and IFRS 15
Revenue from Contracts with Customers, both of which were
adopted on 1 January 2018. The effect of initially applying these
standards is noted below.

IFRS 9 Financial Instruments

IFRS 9 replaces IAS 39 Financial Instruments: Recognition and
Measurement. The standard applies a forward-looking impairment
model that replaces the current applicable incurred loss model. In
contrast to the complex and rules-based approach of IAS 39, the
new hedge accounting requirements provide an improved link to
risk management and treasury operations and will be simpler to
apply. The adoption of IFRS 9 did not have a material impact on
the Group’s consolidated results or financial position and does not
require a restatement of comparative figures.

New impairment requirements use an 'expected credit loss' ('ECL')
model to recognise an allowance.

Impairment is measured using a 12-month ECL method unless the
credit risk on a financial instrument has increased significantly since
initial recognition in which case the lifetime ECL method is
adopted. For receivables, a simplified approach to measuring
expected credit losses using a lifetime expected loss allowance is
available.

6216mpro report for 2018_6216EBB Annual Report for 2018 10/06/2019 10:15 Page 25

Notes to the Consolidated Financial Statements
AT 31 DECEMBER 2018

IFRS 15 Revenue from Contracts with Customers

IFRS 15 replaces IAS 18 Revenue, IAS 11 Construction Contracts and
related interpretations. It describes the principles an entity must
follow to measure and recognise revenue using a five step
approach. The standard requires revenue to be recognised when
goods or services are transferred to customers and the entity has
satisfied its performance obligations under the contract, and at an
amount that reflects the consideration to which an entity expects to
be entitled in exchanged for those goods or services. The adoption
of IFRS 15 did not have a material impact on the Group’s
consolidated results or financial position and does not require a
restatement of comparative figures.

Effective for periods beginning on or after 1 January 2019:

IFRS 16 Leases

The adoption of this standard is not expected to have a material
impact on the Company’s profit for the year or equity.
Application of this standard may result in some changes to
presentation of information within the Company’s financial
statements in future years.

F) Equipment, fixtures and fittings
i) Owned assets

Items of equipment, fixtures and fittings are stated at historic
cost less accumulated depreciation with different useful lives
(see below).

ii) Leased assets

Leases in terms of which the Group assumes substantially all
the risks and rewards of ownership are classified as finance
leases. Assets acquired in terms of finance leases are
capitalised at their fair value at inception of the lease, and
depreciated over the estimated useful life of the asset.
The capital element of future obligations under the leases is
included as a liability in the balance sheet.

iii) Depreciation

Depreciation is charged to the income statement over the
estimated useful lives of each part of an item of equipment,
fixtures and fittings. The depreciation rates are as follows:

- Office and computer equipment: 20% on cost on a

straight-line basis

- PDA, tablet and smartphone equipment: cost spread over

useful life of 3 to 5 years

- Fixtures and fittings: 25% on a reducing balance basis.

G) Intangible assets
i) Development Expenditure

The costs of developing software for commercial resale are
capitalised and amortised on a straight line basis over the
expected ten year useful life of the product. This takes into
account current contracts, renewal rates and ongoing
development. Amortisation commences when revenues

from the product begin to be received. The carrying value
of development costs is reassessed semi-annually.

ii) Goodwill

Goodwill represents the excess of the fair value of the
consideration given for investments in subsidiary undertakings
over the fair value of the underlying assets at the date of their
acquisition. The carrying value of goodwill is reassessed semi-
annually.

H) Impairment
The carrying amounts of the Group’s assets are reviewed at each
balance sheet date to determine whether there is any indication
of impairment. If any such indication exists, the asset’s recoverable
amount is estimated. The recoverable amount is the higher of its
net selling price and its value in use. For intangible assets that are
not yet available for use, goodwill or intangible assets with an
indefinite useful life, an impairment test is performed at each
balance sheet date.

In assessing value in use, the expected future cash flows from
the asset are discounted to their present value using a pre-tax
discount rate that reflects current market assessments of the time
value of money and the risks specific to the asset.

An impairment loss is recognised in the income statement
whenever the carrying amount of an asset or its cash generating
unit exceeds its recoverable amount.

A previously recognised impairment loss is reversed if the
recoverable amount increases as a result of a change in the
estimates used to determine the recoverable amount, but not
to an amount higher than the carrying amount that would have
been determined (net of depreciation) had no impairment loss
been recognised in prior years. For goodwill, a recognised
impairment loss is not reversed.

I) Inventories
Inventories consist entirely of mobile devices held not for re-sale
but as spares and trial equipment. All are individually stated at
the lower of their cost or net realisable value.

J) Turnover and revenue recognition
The turnover shown in the profit and loss account represents
amounts receivable for services provided to customers, exclusive
of Value Added Tax. Subscription income and support and
maintenance income is credited to turnover in equal monthly
instalments over the period of the related agreement. There is
no recognition in the Consolidated Income Statement of the
contracted values of future revenues.

6216mpro report for 2018_6216EBB Annual Report for 2018 10/06/2019 10:15 Page 26

Notes to the Consolidated Financial Statements CONTINUED
AT 31 DECEMBER 2018

N) Financial instruments
Financial liabilities and equity instruments are classified according
to the substance of the contractual arrangements entered into.
An equity instrument is any contract that evidences a residual
interest in the assets of the entity after deducting all of its
financial liabilities.

Where the contractual obligations of the 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 the Income
Statement. 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 financial liability then this is
classed as an equity instrument. Dividends and distributions
relating to equity instruments are debited to equity.

K) Expenses
i) Operating lease payments

Payments made under operating leases are recognised in
the income statement on a straight-line basis over the term of
the lease.

ii) Finance lease payments

The capital element of finance lease repayments is treated
as a reduction in the balance sheet liability and the interest
element is charged to the profit and loss account on a “sum of
digits” basis.

L) Deferred taxation
Deferred tax is recognised on all timing differences where the
transactions or events that give the Company an obligation to
pay more tax in the future, or a right to pay less tax in the future,
have occurred by the balance sheet date. Deferred tax assets
are recognised when it is more likely than not that they will be
recovered. Deferred tax is measured using rates of tax that have
been enacted or substantially enacted by the balance sheet date.

M) Government grants
Government grants are recognised at their fair value where there
is a reasonable assurance that the grant will be received and the
Group will comply with all attached conditions. Government
grants relating to capital expenditure are deducted in calculating
the carrying amount of the asset. The grant is recognised in profit
or loss over the life of the asset as a reduced amortisation
expense. Revenue related grants are credited to the income
statement when the related expenditure is expensed.

The Group has benefitted in the past from small research and
development grants in recent years that have contributed to
meeting the costs of new software development.

6216mpro report for 2018_6216EBB Annual Report for 2018 10/06/2019 10:15 Page 27

Notes to the Consolidated Financial Statements
AT 31 DECEMBER 2018

1. Segmental reporting
The Group has two main regional centres of operation; one in the UK, the other in Ireland but the Group’s resources, including capital,
human and non-current assets are utilised across the Group irrespective of where they are based or originate from. The Board via the
management team, allocate these resources based on revenue generation, which due to its high margin nature and the Group’s
reasonably fixed overheads, in turn drives profitability and cashflow generation. The Board consider it most meaningful to monitor
financial results and KPIs for the consolidated Group, and decisions are made by the Board accordingly.

In due consideration of the requirements of IFRS 8 Operating Segments, the Board consider segmental reporting by (i) region, including
turnover, operating profit and non-current assets and (ii) business activity, by turnover, to be appropriate. Business activity is best split
between (i) the strategic focus of the business, i.e. mobility solutions and the resulting development services that emanate from that,
and (ii) non-core software solutions, including reselling third party software and related development and support services.

The analysis of each follows:

Turnover
Year ended
31 December

Operating profit / loss
Year ended
31 December

Non current assets
Year ended
31 December

Region:

Ireland

Switzerland

USA

Total

2018

£000

2,047

351

2,398

2017

£000

1,901

284

2,275

2018

£000

109

2017

£000

392

(32)

360

2018

£000

2,303

2017

£000

2,303

2,305

2,309

Turnover can be analysed by business activity as follows:

Business activity:

Mobility solutions and related development services

Software solutions reselling, development and support

Total Turnover

Year ended
31 December
2018
£000

2,203

195

2,398

Year ended
31 December
2017
£000

2,165

110

2,275

6216mpro report for 2018_6216EBB Annual Report for 2018 10/06/2019 10:15 Page 28

Notes to the Consolidated Financial Statements CONTINUED
AT 31 DECEMBER 2018

2. Profit from operations

Amortisation of intangible assets

Depreciation on equipment, and fixtures and fittings

Operating lease costs

Auditors remuneration for:

- Audit services

- Other services:

- The auditing of accounts of associates of

the Company pursuant to legislation

- Other services supplied pursuant to such legislation

Year ended

31 December
2018
£000

Year ended
31 December
2017
£000

141

243

120

274

The exceptional item of £44,000 in 2017 represents one-off legal fees and accounting due
diligence costs incurred in preparation of an acquisition that was subsequently aborted by the Company.

3. Finance income and costs

Loan interest

Finance lease interest

Other interest costs

Interest receivable

Net finance costs

Year ended
31 December
2018
£000

Year ended
31 December
2017
£000

6216mpro report for 2018_6216EBB Annual Report for 2018 10/06/2019 10:15 Page 29

Notes to the Consolidated Financial Statements
AT 31 DECEMBER 2018

4. Employees

Staff costs (including Directors) were as follows:

Wages and salaries

Non-Executive Directors' fees

Compulsory social security contributions

Other pension costs

Personnel costs

The following amounts are included above in relation to Directors:

Wages and salaries

Non-Executive Directors' fees

Compulsory social security contributions
Pension costs

Directors' costs

A detailed breakdown of the remuneration of the Directors is shown on page 9.

Average monthly staff numbers in the period were as follows:

Sales and marketing

Technical

Management, finance and administration

Year ended
31 December
2018
£000

Year ended
31 December
2017
£000

747

133

939

648

103

768

Year ended
31 December
2018
£000

Year ended
31 December
2017
£000

373

60
48

487

343

40
1

396

Year ended
31 December
2018
No.

Year ended
31 December
2017
No.

6216mpro report for 2018_6216EBB Annual Report for 2018 10/06/2019 10:15 Page 30

Notes to the Consolidated Financial Statements CONTINUED
AT 31 DECEMBER 2018

5. Taxation
The tax charge for the period ending 31 December 2018 and 31 December 2017 reflects the availability of tax losses in the Group and
the utilisation of capital allowances.

Profit on ordinary activities before tax

Profit on ordinary activities by rate of tax

Effects of:

Expenses not deductible for taxation purposes

Excess capital allowances over depreciation

Utilisation of brought forward tax losses

Tax on profit on ordinary activities

Year ended
31 December
2018

£000

(23)

Year ended
31 December
2017
As restated - Note 19
£000

309

(5)

(83)

Deferred tax asset
The Group has an unprovided deferred tax asset relating to carried forward taxable losses of approximately £477,000
(2017: £400,000).

6. Earnings per share
The calculation of basic earnings per share is based on the profit attributable to ordinary shareholders and the weighted average
number of ordinary shares in issue during the period.

The calculation of diluted earnings per share is based on profit attributable to ordinary shareholders and the weighted average number
of ordinary shares that would be in issue, assuming conversion of all dilutive potential ordinary shares into ordinary shares.

Reconciliation of the weighted average number of shares used in the calculations are set out below:

Basic earnings per share

Reported profit (£000)

Reported basic earnings per share (pence)

Reported diluted earnings per share (pence)

Weighted average number of ordinary shares:

Opening balance
Effect of share placing during the year

Weighted average number of ordinary shares for basic EPS
Effect of options outstanding

Weighted average number of ordinary shares for diluted EPS

Year ended
31 December
2018

Year ended
31 December
2017

0.02

0.01

Year ended
31 December
2018
No.

454,486,234
493,151

454,979,385
8,580,357

463,559,742

304

0.07

Year ended
31 December
2017
No.

453,486,234
52,055

453,538,289
11,282,258

464,820,457

6216mpro report for 2018_6216EBB Annual Report for 2018 10/06/2019 10:15 Page 31

Notes to the Consolidated Financial Statements
AT 31 DECEMBER 2018

7. Intangible assets

Group

Cost

At 1 January 2017

Additions:

Mobile data applications development cost

At 31 December 2017

Additions:

Mobile data applications development cost

At 31 December 2018

Impairment and amortisation

At 1 January 2017

Charge for year

At 31 December 2017

Charge for year

At 31 December 2018

Carrying amount

At 31 December 2018

At 31 December 2017

At 1 January 2017

Group
development
expenditure
£000

Goodwill
£000

988

(190)

798

1,265

295

1,560

347

1,907

(541)

(120)

(661)

(141)

(802)

1,105

899

724

Total
£000

2,253

295

2,548

347

2,895

(731)

(120)

(851)

(141)

(992)

1,904

1,698

1,522

Goodwill can be further analysed by cash generating unit the recoverable amount of each has been assessed based on estimated value
in use.

Cost

Less impairment

Carrying amount

Crimson Tide
(IE) Ltd
(Healthcare)
£000

Crimson Tide
Mpro Ltd
(Mobile sols.)
£000

Callog
Ltd
(Telecoms)
£000

400

280

308

(190)

118

Total
£000

988

(190)

798

Management prudently assess value in use by estimating the cashflows each unit is expected to generate in the next four years based
on current levels of business activity, reducing over time if appropriate, discounted at 8% p.a.

6216mpro report for 2018_6216EBB Annual Report for 2018 10/06/2019 10:15 Page 32

Notes to the Consolidated Financial Statements CONTINUED
AT 31 DECEMBER 2018

8. Equipment, fixtures and fittings

Group

Cost

At 1 January 2017

Additions
Disposals / revaluation

At 31 December 2017

Additions

Disposals / revaluation

At 31 December 2018

Depreciation

At 1 January 2017

Charge for year
Disposals / revaluation

At 31 December 2017

Charge for year

Disposals / revaluation

At 31 December 2018

Carrying amount

At 31 December 2018

At 31 December 2017

At 1 January 2017

Office and

computer

equipment

£000

125

14
(10)

129

134

(54)

(21)
10

(65)

(21)

(86)

PDA, tablet &
smartphone
equipment

£000

1,332

(235)

1,189

1,210

(657)

(250)

239

(668)

(215)

(1)

(884)

326

521

675

Fixtures and

fittings

£000

26
-

(18)

(4)
-

(22)

(8)

(30)

Total

£000

1,479

132
(245)

1,366

1,401

(729)

(275)
249

(755)

(244)

(1)

(1,000)

401

611

750

Included within the net book value of £401,000 is £335,000 (2017: £486,000) relating to PDA and smartphone equipment, computer
equipment and fixtures and fittings held under finance lease agreements. The depreciation charge to the financial statements in the
year in respect of such equipment amounted to £175,000 (2017: £177,000). There is no material difference between the value of the
minimum lease payments and their net present value.

6216mpro report for 2018_6216EBB Annual Report for 2018 10/06/2019 10:15 Page 33

Notes to the Consolidated Financial Statements
AT 31 DECEMBER 2018

9. Investments

Company

The Company is the holding company of the Group. The following table shows details of the Company’s subsidiary undertakings at
31 December 2018. Each of these companies is wholly owned by Crimson Tide plc, the issued share capital of each is fully paid and each
is included in the consolidated accounts of the Group:

Name of Company

Owned directly by Crimson Tide plc

Crimson Tide Mpro Limited

Crimson Tide Services Limited

A. Cohen & Co. (GB) Limited

Crimson Tide (IE) Limited

A.Cohen (Aust) Pty Limited

Owned by Crimson Tide Mpro Limited

Moneymotive Limited

Owned by Moneymotive Limited

Callog Limited

Company
Cost

At 31 December 2017

Additions

At 31 December 2018
Provisions

At 31 December 2017

Impairment

At 31 December 2018

Carrying amount

At 31 December 2018
At 31 December 2017

Country of incorporation or

Activity

registration and operation

Mobile data solutions

Non-trading

Mobile data solutions

Non-trading

England and Wales

Ireland

Victoria, Australia

Non-trading

England and Wales

Telecoms

England and Wales

Shares in subsidiary
undertakings
£000

Trade
investments
£000

5,297

1,929

3,368
3,368

386

-
-

Total
£000

5,683

2,315

3,368
3,368

6216mpro report for 2018_6216EBB Annual Report for 2018 10/06/2019 10:15 Page 34

Notes to the Consolidated Financial Statements CONTINUED
AT 31 DECEMBER 2018

10. Trade and other receivables

Group
Trade receivables

Other receivables

Prepayments and accrued income

As at
31 December
2018
£000
392

103

440

935

As at
31 December
2017
£000
512

433

974

As at 31 December 2018, trade receivables of £116,000 (2017: £89,000) were impaired and fully provided for.
The ageing of trade receivables not impaired are as follows:

Aged analysis of trade receivables:
Age from invoice date

< 30 days

30 - 60 days

60 - 90 days

> 90 days

Movements of the Group provision for impairment of trade receivables are as follows:

At 1 January 2017

Receivables collected in year previously provided for

Receivables written off during the year as uncollectable

Provision for receivables impairment for the year

At 31 December 2017

Receivables collected in year previously provided for

Receivables written off during the year as uncollectable

Provision for receivables impairment for the year

At 31 December 2018

Company

Amounts recoverable from Group undertakings

Other receivables

Prepayments and accrued income

As at
31 December
2018
£000

As at
31 December
2017
£000

431

512

374

392

£000

136

(31)

(16)

116

As at
31 December
2018
£000

As at
31 December
2017
£000

1,388

1,486

1,405

1,502

6216mpro report for 2018_6216EBB Annual Report for 2018 10/06/2019 10:15 Page 35

Notes to the Consolidated Financial Statements
AT 31 DECEMBER 2018

11. Cash and cash equivalents
Cash and cash equivalents comprise cash and short-term deposits held by Group Companies.
The carrying amount of these assets approximates their fair value.

12. Share capital

Authorised

Ordinary shares: 711,950,842 shares of 0.1p each

(2017: 711,950,842 shares of 0.1p each)

Issued, called up

Ordinary shares: 457,486,234 shares of 0.1p each

(2017: 454,486,234 shares of 0.1p each)

As at
31 December
2018
£000

As at
31 December
2017
£000

712

457

454

Share options

The Company has granted equity-settled options to some of the Directors and employees under the Company’s Enterprise
Management Incentive Scheme (EMI Scheme) and under an unapproved scheme. The share options may not be exercised for two
years from date of issue and thereafter, only if the target share price is achieved.

At 31 December 2018 the following options were outstanding in respect of ordinary shares.

Date of Grant

Target
share
price

Issued under EMI scheme

Exercise
Price

Expiry Date

Number
Issued

Expired/ Exercised
in 2017
cancelled

Exercised
in 2018

5 November 2008

2.5p

1.0p

5 November 2018 7,000,000 3,000,000

1,000,000

3,000,000

5 May 2010

2.5p 1.25p

5 May 2020 17,500,000 4,500,000

Issued under an unapproved scheme

5 May 2010

2.5p

1.25p

5 May 2020

2,500,000

—

Number
outstanding
and
exercisable at
31 December
2018

—

13,000,000

2,500,000

6216mpro report for 2018_6216EBB Annual Report for 2018 10/06/2019 10:15 Page 36

Notes to the Consolidated Financial Statements CONTINUED
AT 31 DECEMBER 2018

13. Reserves

Group

Balance as at 1 January 2017 as previously stated
Prior year adjustment - Note 19
Balance as at 1 January 2017 as previously restated
Retained profit for the year
Share options exercised
Transition movement
Prior year adjustment - Note 19
Balance as at 31 December 2017 as restated
Retained profit for the year
Share options exercised
Balance as at 31 December 2018

Company

Balance as at 1 January 2017

Loss for the year
Share options exercised

Balance as at 31 December 2017

Loss for the year
Share options exercised

Balance as at 31 December 2018

14. Creditors: Amounts falling due within one year

Group

Finance lease agreements

Secured loans

Bank overdraft

Trade creditors

PAYE and social security

VAT

Other creditors

Accruals and deferred income

Company

Trade creditors

Amounts owed to Group undertakings

Accruals

Share
premium
£000

Other
reserves
£000

112

121

148

Reverse
acquisition
reserve
£000

(5,244)

422
51
473

(1)
6
478

Retained
earnings
£000

6,795
(51)
6,708
310

(6)
7,012
69

7,081

478

(5,244)

premium

Other

reserves

Retained

earnings

£000

112

-
9

121

-
27

148

£000

337

-
-

337

-
-

337

£000

3,931

(42)
-

3,889

(156)
-

3,733

As at
31 December
2018
£000

As at
31 December
2017
£000

106

387

723

180

100

364

868

As at
31 December
2018
£000

As at
31 December
2017
£000

188

236

6216mpro report for 2018_6216EBB Annual Report for 2018 10/06/2019 10:15 Page 37

Notes to the Consolidated Financial Statements
AT 31 DECEMBER 2018

15. Creditors: Amounts falling due after more than one year

Group

Finance lease agreements
Secured loans

Maturity of debt

Group

The loans and finance leases are repayable as follows:

Within one year

Between one and two years

Between two and five years

As at
31 December
2018
£000

As at
31 December
2017
£000

196
29

225

As at

31 December
2018
£000

151

122

103

376

284
75

359

As at

31 December
2017
£000

280

163

196

639

The secured loans in the Group are secured by fixed charges over specific PDA and smartphone equipment.

16. Operating lease commitments
At the period end, total future minimum rental commitments under non-cancellable operating leases were:

Group

During next year

After 1 year but not more than 5 years

As at
31 December
2018
£000

As at
31 December
2017
£000

194

258

322

6216mpro report for 2018_6216EBB Annual Report for 2018 10/06/2019 10:15 Page 38

Notes to the Consolidated Financial Statements CONTINUED
AT 31 DECEMBER 2018

17. Financial Instruments and Risk Management
The Group uses a limited number of financial instruments, comprising cash, short-term deposits, finance leases, loans and bank
overdrafts to fund the Group’s operations. The Group has other financial instruments such as trade receivables and payables, that arise
directly from operations. The Group does not trade in financial instruments.

Trade and other short-term debtors/creditors have been excluded from the following disclosures:

Group

Financial Assets

Cash at bank and in hand

Financial Liabilities

Bank overdraft (maturing on demand)

Secured loans

Finance leases

An analysis of the maturity of the loans is given in note 15.

As at
31 December
2018
£000

As at
31 December
2017
£000

613

302

757

174

465

Financial risk factors
Exposure to currency, credit, liquidity and interest rate risk arise in the normal course of the Group’s business.
The Directors review and agree policies for managing each of these risks to minimise potential adverse effects on the Group’s financial
performance. Sensitivity analysis indicates none are likely to have a material impact on the profitability or net assets of the Group.

a) Foreign currency risk

The Group operates internationally and is exposed to foreign exchange risk arising from various currency exposures, primarily with
respect to the euro. At the end of the year the Group held negligible net monetary assets in foreign currencies. Foreign exchange
differences on retranslation of these assets and liabilities are taken to the income statement.

b) Credit risk

The Group has no significant concentrations of credit risk and has policies in place to ensure that sales are made to customers with
an appropriate credit history. Receivables balances are monitored on an ongoing basis and at 31 December 2018 no one customer
owes more than 6% of total revenue. As a result the Group’s exposure to bad debts is not significant.

The Group is exposed to the loss of future subscription revenues if subscriber customers go into liquidation. At 31 December 2018,
no one customer accounted for more than £820,000 (2017: £1,134,000) of future contracted revenue.

c) Liquidity risk

Prudent liquidity risk and capital management implies maintaining a strong focus on working capital management and sufficient cash
and available funding through an adequate amount of committed credit facilities. The Group ensures it has adequate cover through
the availability of bank overdraft, finance leases and loan facilities to satisfy forecast requirements taking into account all known and
forecast factors.

d) Interest rate risk

The Group’s policy is to minimise interest rate risk by regularly reviewing and agreeing actions to limit the Group’s exposure to
adverse movements in interest rates and fixing interest rates where possible.

6216mpro report for 2018_6216EBB Annual Report for 2018 10/06/2019 10:15 Page 39

Notes to the Consolidated Financial Statements
AT 31 DECEMBER 2018

Fair value risk factors
The net fair values of intangible assets approximate to their carrying value as disclosed in Notes H and 7 are regularly assessed.
The aggregate net fair values and carrying amounts of all other assets and liabilities, including financial assets and financial liabilities,
are disclosed in the Statement of Financial Position and Notes.

Operational risk factors
The Board considers the key operating risk to be insufficient working capital to fund the planned growth in subscriber numbers.
Funding is regularly assessed against forecasts and expected growth rates and managed accordingly to minimise this risk.

18. Related party transactions
The interests of the Directors in share options are shown on pages 8 and 9.

Other than the above, no transactions with related parties were undertaken such as are required to be disclosed under International
Accounting Standard 24.

19. Prior year adjustment

Share
capital

Share
premium

Other
reserves

Reserve
acquisition
reserve

Retained
earnings

Total

Group

£000

Balance as at 1 January 2017 as previously stated

453

112

422

(5,244)

6,759

2,502

Effect of intra-group foreign currency fair value
adjustment

Balance as at 1 January 2017 as restated

453

112

473

(5,244)

(51)

6,708

2,502

The Group has previously not made fair value adjustments to intra-group loans denominated in currencies other than Sterling as the
amounts were considered immaterial. Due to the decline in the value of Sterling to Euro in 2016, an adjustment to the fair value of intra-
group loans denominated in Euro has become necessary.

This adjustment has the effect of reducing the Group’s profit for the prior year, while increasing the value of the Group’s Irish subsidiary.
The Irish subsidiary’s value is increased by means of the Cumulative Translation Adjustment, which forms part of “Other Reserves” on
the Consolidated Statement of Financial Position. The increase in the Cumulative Translation Adjustment is reported in the Consolidated
Statement of Comprehensive Income.

The adjustment did not impact Earnings per Share or Diluted Earnings per Share as reported in the prior year. The following table
summarises the impact of the prior period error on the financial statements of the Group.

Consolidated Income Statement

Administration expenses

Decrease in profit for the financial year

Consolidated Statement of Other Comprehensive Income

Other comprehensive income/(loss) for the year:

Increase in exchange differences on translating foreign operations

Year ended
December
2017
£000

(6)

Year ended

December
2017
£000

6216mpro report for 2018_6216EBB Annual Report for 2018 10/06/2019 10:15 Page 40

Company Statement of Financial Position
AT 31 DECEMBER 2018

As at 31 December

Assets

Tangible assets

Investments

Total non-current assets

Trade and other receivables

Cash and cash equivalents

Total current assets

Total assets

Equity and liabilities

Share capital

Share premium

Other Reserves

Retained earnings

Total equity

Trade and other payables

Amounts falling due within one year

Amounts falling after more than one year

Total liabilities

Total equity and liabilities

Notes

2018
£000

3,368

1,486

1,543

4,911

457

148

337

3,733

4,675

236

4,911

2017
£000

3,368

1,502

1,532

4,900

454

121

337

3,889

4,801

4,900

As permitted by Section 408 of the Companies Act, the profit and loss account of the Parent Company is not presented as part of these
accounts. The Parent Company’s loss for the financial year amounted to £156,192 (2017 loss: £42,174).

The financial statements were approved by the Board of Directors on 5 June 2019 and are subject to the approval of the shareholders
at the Annual General Meeting on 28 June 2019 and signed on its behalf by:

B R J Whipp
Director

S K Goodwin
Director

Company registration number: 00113845

6216mpro report for 2018_6216EBB Annual Report for 2018 10/06/2019 10:15 Page 41

Companies Statement of Changes in Equity
AT 31 DECEMBER 2018

Company
Balance as at
1 January 2017

Loss for the year
Share options exercised

Balance as at
31 December 2017

Loss for the year

Share options exercised

Balance as at

31 December 2018

Share
Capital
£000

Share
Premium
£000

Other
Reserves
£000

Retained
Earnings
£000

453

454

112

-
9

121

337

-
-

337

Total
£000

4,833

(42)
10

3,931

(42)
-

3,889

4,801

(156)

457

148

337

3,733

4,675

6216mpro report for 2018_6216EBB Annual Report for 2018 10/06/2019 10:15 Page 42

Company Statement of Cash Flows
FOR THE YEAR ENDED 31 DECEMBER 2018

Year ended
31 December

2018
£000

(156)

137

(3)

2017
£000

(42)

(145)

(120)

(110)

140

Cash flows from operating activities
Loss before taxation

Adjusted for:

Decrease / (increase) in trade and other receivables

Increase in trade and other payables

Interest paid

Net cash (used) / generated from operating activities

Cash flows used in investing activities

Acquisition of subsidiaries

Purchases of fixed assets

Interest received

Net cash used in investing activities

Cashflows from financing activities

Net proceeds from share issues

Interest paid

Net decrease in borrowings

Net cash from financing activities

Net increase / (decrease) in cash and cash equivalents

Net cash and cash equivalents at beginning of period

Net cash and cash equivalents at end of period

Analysis of Net Debt

Cash and cash equivalents

Bank overdraft

Other borrowing due within one year

Borrowings due after one year

Net funds

6216mpro report for 2018_6216EBB Annual Report for 2018 10/06/2019 10:15 Page 43

Officers and Professional Advisors

Board of Directors

B R J Whipp (Executive Chairman)
G B Ashley
S K Goodwin
T J T Hawkins
L A Jeffrey
R K Todd

Secretary

S K Goodwin

Registered office

Oakhurst House
77 Mount Ephraim
Tunbridge Wells
Kent TN4 8BS

Registered Number

00113845

Bankers

Auditors

Nominated Adviser and Broker

Solicitors

NatWest Bank
19 Mount Ephraim Road
Tunbridge Wells
Kent
TN1 1EN

Shipleys LLP
10 Orange Street
Haymarket
London
WC2H 7DQ

Arden Partners plc
125 Old Broad Street
London
EC2N 1AR

DAC Beachcroft LLP
125 Broad Street
London
EC2N 1AR

Website

www.crimsontide.co.uk

6216mpro report for 2018_6216EBB Annual Report for 2018 10/06/2019 10:15 Page 44

Notice of Annual General Meeting

Notes
1 Proxies

Any member of the Company entitled to attend and vote at
the above meeting may appoint one or more proxies to attend
and, on a poll, to vote instead of him. A proxy need not be a
member.

2 Contracts of Service

All Directors’ contracts of service having more than one year’s
unexpired term are available for inspection by members at the
Company’s registered office during business hours and will be
available for inspection at the location of the meeting for the
period commencing 15 minutes prior to the commencement of
the meeting and ending at the conclusion of the meeting.

3 The Company, pursuant to Regulation 41 of the Uncertificated
Securities Regulations 2001, hereby specifies that only those
shareholders registered on the Register of Members of the
Company at 2.30 pm on 26 June 2019 shall be entitled to
attend or vote at the meeting in respect of shares registered
in their name at the time. Changes to entries on the relevant
Register of Members after this time shall be disregarded in
determining the rights of any person to attend or vote at the
meeting, notwithstanding any provisions in any enactment, the
articles of association of the Company or other instrument to
the contrary.

4 The Company, pursuant to Regulation 41(3) of the Uncertificated

Securities Regulations 2001, hereby gives notice of its
determination that only those shareholders registered on the
Register of Members of the Company at the close of business
on the date of this notice shall be entitled to receive notice of
this meeting.

Notice is hereby given that the 2019 Annual General Meeting
of Crimson Tide plc will be convened at Shipleys, 10 Orange
Street, Haymarket, London WC2H 7DQ on 28 June 2019 at
2:30 pm to transact the following business and consider and,
if thought fit, pass the following resolutions, each such resolution
to be considered as an ordinary resolution.

Ordinary Resolutions:
1 To receive the report and accounts of the Company for the

year ended 31 December 2018

2 To re-appoint Messrs Shipleys LLP as Auditor and authorise the

Directors to fix their remuneration

3 To re-appoint G. B. Ashley as a Director of the Company

By order of the Board
Stephen Goodwin
Company Secretary
Registered Office
Oakhurst House
77 Mount Ephraim
Tunbridge Wells
Kent TN4 8BS
5 June 2019

6216mpro report for 2018_6216EBB Annual Report for 2018 10/06/2019 10:15 Page 45

Form of Proxy

Crimson Tide plc
(“Crimson Tide” or “the Company”)
Annual General Meeting on 28 June 2019 at 2.30 pm

I/We (name in full) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

of . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

hereby appoint the Chairman of the Meeting or . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .(delete as appropriate) as my/our proxy to
attend, to speak and to vote in respect of the shares registered in my/our name(s) at the Annual General Meeting of Crimson Tide plc
to be held on 28 June 2019 and at any adjournment thereof. I/we direct my/our proxy to vote on the following resolution as I/we have
indicated by marking the appropriate box with an ‘X’.

RESOLUTION
1 To approve accounts for year ended 31 December 2018
2 To re-appoint Shipleys LLP as auditors
3 To re-appoint G. B. Ashley as director

FOR

AGAINST

ABSTENTION

Signature . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Notes on completion:
1. As a member of the Company you are entitled to appoint a proxy to exercise all or any of your rights to attend, speak and vote at a general

meeting of the Company. You can only appoint a proxy using the procedures set out in these notes.

2. Appointment of a proxy does not preclude you from attending the meeting and voting in person. If you have appointed a proxy and attend

the meeting in person, your proxy appointment will automatically be terminated.

3. A proxy does not need to be a member of the Company but must attend the meeting to represent you. To appoint as your proxy a person
other than the Chairman of the meeting, insert their full name in the space provided. If you sign and return this proxy form with no name
inserted in the space, the Chairman of the meeting will be deemed to be your proxy. Where you appoint as your proxy someone other
than the Chairman, you are responsible for ensuring that they attend the meeting and are aware of your voting intentions. If you wish your
proxy to make any comments on your behalf, you will need to appoint someone other than the Chairman and give them the relevant
instructions directly.

4. You may appoint more than one proxy provided each proxy is appointed to exercise rights attached to different shares. You may not appoint

more than one proxy to exercise rights attached to any one share.

5. To direct your proxy how to vote on the resolutions mark the appropriate box with an ‘X’. If no voting indication is given, your proxy will vote
or abstain from voting at his or her discretion. Your proxy will vote (or abstain from voting) as he or she thinks fit in relation to any other
matter which is put before the meeting.
To appoint a proxy using this form, the form must be:

• completed and signed;
• sent or delivered to Company Secretary; and
• received no later than 26 June 2019 at 2.30 pm.

6.
7.

If your shares are held through CREST, you may use the CREST electronic proxy appointment service.
In the case of a member which is a company, this proxy form must be executed under its common seal or signed on its behalf by an officer
of the company or an attorney for the company.

8. Any power of attorney or any other authority under which this proxy form is signed (or a duly certified copy of such power or authority) must

10.

be included with the proxy form.
In the case of joint holders, where more than one of the joint holders purports to appoint a proxy, only the appointment submitted by the
most senior holder will be accepted. Seniority is determined by the order in which the names of the joint holders appear in the Company’s
register of members in respect of the joint holding (the first-named being the most senior).
If you submit more than one valid proxy appointment, the appointment received last before the latest time for the receipt of proxies will take
precedence.

11. A vote withheld is not a vote in law, which means that the vote will not be counted in the calculation of votes for or against the resolution.
If no voting indication is given, a proxy may vote or abstain from voting at his or her discretion. A proxy may vote (or abstain from voting)
as he or she thinks fit in relation to any other matter which is put before the meeting.

6216mpro report for 2018_6216EBB Annual Report for 2018 10/06/2019 10:15 Page 46

Second fold

The Company Secretary
Crimson Tide plc
Oakhurst House
77 Mount Ephraim
Tunbridge Wells
TN4 8BS

Third fold

Please
Affix
Stamp
Here

d
o
f

t
s
r
i
F

6216mpro report for 2018_6216EBB Annual Report for 2018 10/06/2019 10:15 Page 47

6216mpro report for 2018_6216EBB Annual Report for 2018 10/06/2019 10:15 Page 48

Crimson Tide plc

Registered in England No. 00113845

Our registered office:

Oakhurst House,
77 Mount Ephraim,
Tunbridge Wells,
Kent TN4 8BS

Telephone:
Fax:
General email address:

01892 542444
01892 510441
info@crimsontide.co.uk

Ireland office:

Citywest Business Centre,
3013 Lake Drive,
Citywest Campus,
Dublin 24

Telephone:
Fax:
General email address:

+353 (0) 1 4693728
+353 (0) 1 4693115
info@crimsontide.ie

Web