Annual Report and Accounts
2021
www.crimsontide.co.uk
Contents
Strategic Review
2021 Highlights
Company Overview
Chairman's Statement
Chief Executive's Statement
Financial Review
Case Studies
Strategic Report
Corporate Governance
Board of Directors
Directors’ Report
Corporate Governance Statement
Independent Auditor’s Report
Financial Statements
Consolidated Financial Statements
Notes to the Financial Statements
Company Financial Statements
Officers and Professional Advisors
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WHAT OUR CUSTOMERS SAY
I just wanted to say thank you to the whole team at mpro5
– they covered more ground in the six weeks than our old
system did in three years. This was the first step in realising
my vision for the Estates Department at CWPT.
Sat Padda
Senior Compliance Manager
CWPT NHS Trust
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BARRIE WHIPP, EXECUTIVE
CHAIRMAN OF CRIMSON TIDE,
COMMENTED:
“The year was transformational
for Crimson Tide as, for the first
time in our history, we completed
an institutional and private
investor fund raise to support
the next chapter in our growth.
mpro5 continued to perform
well with strong revenue growth,
and we reached annualised
recurring revenue of c£4m just
after year-end. Our focus is
now on sector and international
growth, particularly in the United
States and Northern Europe.
The new versions of mpro5 for
tradespeople and healthcare
will certainly expand our market
and we are excited to develop
our “one platform, many apps”
strategy with the new hires and
investments afforded by the
fresh capital. Our key target
is to double Annual Recurring
Revenue in the medium term.
Partnerships with organisations
such as Cisco will assist us
domestically and internationally
to achieve our goal.”
2021 Highlights
Financial
REVENUE
£4.1m
17%
FY2020: £3.5m
ANNUAL RECURRING REVENUE
£3.8m
24%
FY2020: £3.1m
CAPITAL FUND RAISE YIELDED
CASH AT YEAR-END
£5.6m NET
£5.7m
FY2020: £1.2m
GROSS PROFIT MARGIN
84.7%
FY2020: £80.9m
Operational
• Continued sector expansion for mpro5
• Master Services Agreement with Compass Group
• Cisco Meraki partnership
• Project wrkrz development
• Talent acquisition in development, marketing and international
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WHAT OUR CUSTOMERS SAY
As a large food retailer with
thousands of sites and with many
health and safety checks to
perform, you can see how doing
this on paper caused plenty of
headaches. This new digitised
system for our logbooks is
great because it’s easier to use,
harder to get wrong and gives
us much more useful information
than a paper system backed
by an excel spreadsheet ever
could.
John Lamont
Head of Capacity and Legal Operations
Tesco
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Company Overview
Crimson Tide provides mpro5, the mobile enterprise app WITH a service. We
are trusted by businesses across industries in over 260,000 sites ranging from
hospitals to train stations to your local supermarket. We help clients overcome
inefficiencies to unlock substantial cost savings and productivity gains.
FACILITIES MANAGEMENT
TRANSPORTATION
CATERING SERVICES
RETAIL
HEALTHCARE ESTATES
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Chairman’s
Statement
The year saw a
fundraise of £5.6m net
of expenses which was
transformational for
the Company.
Barrie R. J. Whipp
Founder & Chairman
15 June 2022
The year saw a fundraise of £5.6m net of expenses
which was transformational for the Company. It
has provided us with the ability to invest in human
resources, to continue with tech development plans
and marketing activity as well as allowing us the
freedom to add tradespeople (project wrkrz) and
healthcare (mpro5rx) to our offering. We are refining
and upgrading our mpro5 platform to deal with the
requirements of our existing and potential clients.
We have also been able to add appropriate marketing activities for
the first time in our history which the team is confident will add to our
exposure, both nationally and internationally.
Our annual recurring revenue (ARR) has increased to over £4m post
year-end and this KPI is our focus to drive the business forward.
Our aim is to grow ARR through a range of methods: -
• Increasing our footprint in existing verticals
• Introducing our trade version of mpro5
• Monetising our patient healthcare version of mpro5
• International expansion
• Future vertical market versions of mpro5
As can be implied from the above we have ambitious targets through
which we are looking to grow this key metric and we are targeting an
overall doubling in ARR over the medium term. Our market knowledge
and research tell us the above mechanisms are available to us and
underpin our confidence in the achievability of this target. Margin
remains at c80% and churn has been low.
Diversification of the revenue model across our three brands will
accommodate more dynamic growth as we also look to cement our
traditional long-term enterprise revenue.
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mpro5’s cash generation tempered our cash burn, however larger
investments in software and marketing are planned during 2022. Our
Balance sheet is strong, and we have taken the decision to shorten
our amortisation profile on Intangible software assets to seven years.
Current expenditure is focused on development (£2m in the coming
months on platform and apps) and a further £1m on marketing in the
UK and US. Development expenditure will vary later in the year as we
balance the requirements for apps and the platform, however the single
platform upgrade should be largely complete by the end of 2022.
We aim to invest in the opportunity with our new Cisco Meraki
partnership, however our planned spend of c£1m is dependent on a
reliably functioning sensor supply chain.
Developments internationally included new contracts in Scandinavia
as part of our Master Services Agreement with Compass Group.
Food quality is at the heart of Compass’ offering, and we are pleased
to continue to expand across their international footprint. Compass
trades in forty-five countries and mpro5 is only currently used in four
of them; it is pleasing to note that mpro5 now processes school meal
data and advises Compass on performance across the UK.
We continued to expand our contracted revenues further with
existing customers, thanks to our excellent service and relationships.
Our office in Raleigh, North Carolina is operational, and we are
building a pipeline including the World Federation of Haemophilia in
Canada for our healthcare version of mpro5.
Project wrkrz has made progress and we have a working app with
many of the features we designed, with further versions to come.
Our branding and go to market campaigns are undergoing their final
iterations and we will announce a new brand for the application in the
coming weeks. Market research has helped us refine the application
and we are combining the engine of this product with mpro5’s existing
technologies. 10% of UK employment is provided in the trades and
increasingly this skill base is become smarter and more professional
in terms of the use of technology. Of course, our tradespeople
application will evolve internationally, however our focus is currently
only on the UK & Ireland.
Our partnership ambitions have expanded due to our nascent
marketing relationship with Cisco Meraki. We are the solution to the
“what happens now?” data endpoints of Meraki cameras and sensors
and this gives us the opportunity to attach ourselves to Cisco’s global
name and marketing engine. Our IoT offering continues to be piloted
in rail and it is only the speed of client decision making that is holding
us up. We are developing our sensor offering further in anticipation
of demand from the Cisco Meraki community. Cisco has over 270
locations in eighty-eight countries. From our group marketing efforts,
we are seeing wider demand for our core mpro5 solutions.
With an expanded marketing team and budget, we are optimistic that
more MQLs (marketing qualified leads) will convert to SQLs (sales
qualified leads). Challenges have included recruitment and we are
not alone in seeing the effects of competition for technical staff and
wage inflation. As expected, in seeing our team grow to forty-seven
staff members we have been bedding in new staff as well as tasking
external contractors and outsource firms.
In summary we are extremely busy with development and marketing, while
our operational infrastructure is well set, save for a few extra hires.
Our product focus has aided us in a “one platform, many apps”
strategy and we are pursuing this with optimism and determination.
Underpinning our ambition is a growing and stable customer base
which provides high levels of profitable, recurring revenue.
Our goals and investment decisions are based on areas where we
know there is demand for our solutions and feedback to date supports
this. We are expanding marketing and deploying capital and 2022 will
see a full year of a Company accelerating its growth. The Board looks
to the future with confidence.
Barrie RJ Whipp, Founder & Chairman
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Chief Executive’s
Statement
Fresh capital allowed us to
proceed with investments
in our technical, marketing,
and international
departments.
Luke Jeffrey
CEO
15 June 2022
Fresh capital allowed us to proceed with
investments in our technical, marketing, and
international departments. We have remained
pragmatic in an ever-changing talent acquisition
landscape, attracting the right talent to deliver
our three year strategy and beyond. We have also
leveraged our partner and contractor networks
to accelerate the implementation of our strategic
objectives – namely investing in new product
offerings, partner marketing, and growing
internationally.
Our combined software and service offering continues to be
unrivalled within our competitive landscape. Our multi-year SaaS
agreements and minimal churn rate demonstrate the long term
commitment our customers have to their usage of mpro5 and continue
to give the business great visibility of future contracted revenues.
With user testing of our new consumer (Project Wrkrz) and healthcare
(mpro5rx) offerings complete and third party research positioning
us as a disruptor in these spaces, we begin to target the new revenue
streams they offer. These opportunities, coupled with the growing
mpro5 enterprise pipeline gives the Board reason for optimism.
Our partner strategy with Cisco places us uniquely within their Meraki
marketplace, and I believe mpro5’s unrivalled ability to provide
digital workflow and a “single pane of glass” will lead to exciting
opportunities in the coming months across Europe and the Americas.
Our international revenue acquisition is underpinned by our Master
Service Agreement with Compass Group leading to a number of
mpro5 rollouts across Northern Europe. Having provided mpro5 to
Compass UK for many years culminating in them becoming the largest
mpro5 customer, we remain excited as these opportunities mature and
subscriptions grow.
This year in particular has been transformational for our organisation.
Despite the recruitment struggles slightly delaying the deployment of
capital caused by the digital skills shortage already widely publicised,
I remain excited for the years ahead. We will continue to invest and
accelerate on all fronts, without forgetting our founding principles
– long term contracted revenue on one unified mpro5 platform.
It’s our time.
Luke Jeffrey, CEO
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Financial Review
Financial indicator
Revenue
Gross profit margin
EBITDA
(Loss)/Profit before tax
Annual recurring revenue (ARR)
Cash
Year ended
December
2021
£’000
Year ended
December
2020
£’000
4,114
84.7%
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(575)
3,804
5,736
3,542
80.9%
946
532
3,060
1,175
Revenue
The Company’s sustained focus of delivering long-term revenue at
a high margin contributed to revenue growth of 16% (2020: 21%) of
which 85% was recurring revenue. Annual recurring revenue (ARR)
as at 31 December 2021 of £3.8 million (2020: £3.06 million) increased
by 24%. During a challenging period of national lockdowns, this was
achieved by upselling additional modules to existing customers, while
also adding new clients at entry level price points. Revenue churn
during 2021 was negligible at 2.4% (2020: 4.9%), continuing the trend
of churn amongst small legacy customers. The gross profit margin of
84.7% (2020: 80.9%) remained above the Board’s 80% target rate.
Cashflow and liquidity
Cash at year-end amounted to £5.74m (2020: £1.17m), following a
fund raise during April 2021 that yielded a net £5.64m. In the light
of investments in sales and marketing, platform improvements and
establishing an office in the USA, cash generated by operations
remained positive at £0.16m (2020: £1.39m).
Loss before taxation
The Company made a loss before taxation of £575k (2020: £532k
profit). The loss was in line with management expectations and arose
due to the investments in sales and marketing and establishing an
office in the USA as mentioned above.
Trade receivables
Trade receivables at year-end amounted to £888k (2020: £576k).
The increase predominantly relates to two large customers that
migrated to new procurement platforms during the year, which
caused some delay in payment, which has unwound since the year
end. The Company did not experience a noticeable increase in trade
receivables or bad debt related to the pandemic.
Debt and finance costs
Loans and leases decreased to £103k (2019: £288k). Finance charges
amounted to £10k (2020: £29k).
Capitalisation of intangible asset
Software development costs of £485k (2020: £539k) relating to
the core mpro5 product was capitalised during the year, while an
additional £479k (2020: £nil) were capitalised relating to the new
project wrkrz product. Amortisation and impairment of enterprise
development expenditure during 2021 amounted to £388k (2020:
£216k). The value of the capitalised software intangible asset at year-
end was £2.2m (2020: £1.64m). The amortisation period of the mpro5
intangible asset will be reduced from 10 to 7 years in 2022.
Tax
A deferred tax asset of £32k (2020: £nil) was expensed due to timing
differences between the tax base and net book value of certain
assets. No corporation tax charge has been included (2020: £nil) due
to the availability of historic tax losses.
Earnings per share
The average number of ordinary shares in issue during the year was
596.1m (2020 457.5m). Basic and diluted loss per share was 0.10p
(2020: 0.16p – earnings per share).
Subsidiary company in USA
A subsidiary company was incorporated during May 2021. This
company is based in Raleigh, North Carolina and is 100% held by
Crimson Tide (IE) Ltd, which in turn is 100% held by Crimson Tide plc.
8
Case Study
Compass Group
Cleaning on demand with
Compass Group Denmark
How mpro5 facilitated innovative, agile
cleaning for Compass Group
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Innovation and Dynamic Cleaning
Facilities Management (FM) companies are finding
new ways to bring innovative services to their
customers and get ahead of the competition.
Changes to working patterns and higher
expectations of cleanliness mean that FM providers
are increasingly expected to deliver more value
using the resources they already have.
Covid has highlighted the idea that customers are assured by tangible
evidence of cleaning in action, that closing the gap between the users
of the building and the facilities staff can improve the level of service.
We are working with Compass Group Denmark to develop and
iterate on just this: using the Internet of Things, call buttons and our
smart workflow management platform to improve service, increase
attentiveness to user needs and still meet day-to-day requirements for
their customer, Total Energies.
The mpro5 platform was configured specifically for Compass and their
service objectives. Workflows and automated alerts guide staff through
their processes, which are informed by IoT data via the platform.
“Developing a new concept from the ground up has been
an inspiration and a tough journey, going all the way
from the first idea to using it in our daily operations. The
flexible mpro5 software and great cooperation with the
innovation team, has reinforced our strong on-site team
spirit, service excellence and our engaging relationship
with the client and guests.”
Elsie Reitzel
Team Manager, Eurest Services, Total CPH
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“In Compass Group we consider this project to be a stepping-stone towards
shaping the future of our service. mpro5 have stepped up as a key partner for
this journey. The mpro5 platform has enabled our innovation team to carefully
design digital workflows in a way that matches preferred ways of working, as
defined by our operational co-workers. The team also went out of their way
to meet our demands in terms of data availability, which has allowed us to
shape the insights we need and make them an integrated part of our business
operations rather than a separate entity to our core service.”
Jonathan Hentze
Head of Innovation & Digital Development
Results
Compass have elevated the quality of their service significantly since
installing call buttons and implementing smart workflows through the
mpro5 platform. Customers can indicate their immediate needs and
teams can react rapidly to resolve an issue.
visibility and data limits the effectiveness of any output-based model
– without data a focus on demand-led work can only be guided by
informed guesswork.
From the user’s perspective, it could take hours or even days to get a
problem dealt with as it wasn’t clear who to notify or how to.
The average response time to a call button being pressed is just 49
minutes. Prior to this, it may have taken hours or even days to rectify
an issue.
It’s widely accepted that digitalisation in FM is the next logical step,
but it can be a daunting project both in terms of implementation as
well as making a compelling business case with a significant ROI.
Total employees have been impressed by the added level of service
that call buttons provide and the speed of response to jobs such as
fixing a faulty coffee machine. Compass can offer an exceptional
service, beyond a standard FM offering, by providing dynamic
cleaning and reactive service.
Introducing novel ways of engaging directly with the customers has
helped shape a stronger service culture in the on-site service team.
Refined workflows that guide them through their duties via the mpro5
app provide clarity and accountability, making their shifts frictionless
and demonstrating their hard work.
By involving ground teams with the development and configuration
of mpro5 from the start, Compass have received enthusiastic buy-in
from their teams. This grass-roots adoption means that mpro5 has
offered employees a stake in changing their working patterns and the
opportunity to embrace innovation.
Problem
The pandemic has had a significant impact on the FM industry.
Cleanliness is now a matter of health and safety in all public spaces,
and many customers have moved towards flexible working patterns,
reducing demand and footfall on sites. This means that cleaners need
to be agile enough to prepare rooms for varying numbers of users, as
well as responding visibly to changes in demand for these spaces.
There are also more traditional challenges for Compass. It has long
been recognised that cleaning by routine is inefficient, but a lack of
Solution
There were two key objectives for implementation. The first was to
bring substantial ROI on the new IoT network and the second was
to target cleaning in the areas it was needed most and, through
saved hours and more targeted responses, add value to the service
provided.
The first component of Compass’ IoT network is call buttons, which
were installed across five floors in kitchens and copy rooms. Users
can press a call button to report a fault with a coffee machine for
example, and this will send an alert directly to the relevant team.
A team can then action this alert by going to the kitchen in question
and scanning a QR tag, which loads the correct workflow to guide
them through any processes and give proof of task completion,
closing the feedback loop.
The mpro5 platform was configured specifically for Compass’
needs and adoption was aided by live configuration calls and user
walkthroughs.
The configurability of the platform makes adjusting thresholds or rules
straightforward and fast, allowing Compass to adjust their system easily.
With the success of the initial implementation of mpro5, the group
plan to rollout more features, including sensors (which are currently
being tested to measure footfall in copy rooms and bathrooms).
Moving in stages, Compass can rigorously test each use case and then
adapt the model based on its utility.
2021 ANNUAL REPORT & ACCOUNTS | STRATEGIC REVIEW 10
Case Study
Tesco
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From Paper To
Platform
mpro5 transitions logbooks
from paper to platform for one
of Britain’s biggest retailers.
63%
REDUCTION IN CHECKS NEEDED
£1MILLION
ANNUAL PRINT
COST REDUCTION
TIME SAVED
ON DATA
ENTRY
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As a large food retailer with thousands of sites and with many health and
safety checks to perform, you can see how doing this on paper caused plenty
of headaches. This new digitised system for our logbooks is great because it’s
easier to use, harder to get wrong and gives us much more useful information
than a paper system backed by an excel spreadsheet ever could.
John Lamont
Head of Capacity and Legal Operations
Smart Supermarket Technology
Logbooks are an essential part of many businesses,
particularly those in retail. They are used to record
all operations and evidence compliance, playing a
central part in most audits and reports.
Despite the importance of logbooks, many businesses still persist with a
mixture of paper records and legacy systems. These are unreliable and
limited in their usefulness beyond slowly extracting the data for audits.
For the past 10 years we have worked with one of Britain’s biggest
retailers to develop a specifically tailored mpro5 platform. The client
now has fully digitised logbooks, an enhanced operational process and
can evidence compliance quickly and effectively.
Results
Our client now has effective and agile processes with full visibility of
compliance. They have also generated significant productivity gains
and cost savings, including reductions in data entry and over £1million
in print costs. This has also helped our client in their commitment to
more sustainable practices.
Management can now spot trends, identify pain points and change
cultural behaviour, to proactively improve their processes rather than
simply passively recording compliance. mpro5 has helped our client to
streamline operations, reducing the total amount of checks by 63%.
They have also found themselves less susceptible to false insurance
claims and better positioned to recognise problems and resolve them
quickly. Employees complete tasks by simply and correctly filling in their
smart logbooks. Employees have also said that the transition to this new
way of working has been surprisingly smooth and that they appreciate
the clear guidance and accountability provided by workflows.
Problem
Our client’s logbooks were paper based prior to using mpro5. This
meant that the veracity of the data was questionable, and it was
tempting for employees to fill them out ‘as and when’ without properly
following the process.
All this data was siloed into more than 160 paper logbooks across the
company, making it difficult to navigate and impossible to visualise.
It was no exaggeration to say that our client had limited visibility of
their compliance data. Prompt and timely follow-up actions were
difficult to implement and even harder to track.
Solution
Our client already used our software to manage housekeeping,
cleaning health checks and auditing, but they decided they could
leverage the flexibility of the platform for their logbook requirements.
All logbooks were digitised and integrated into their back-office
analytics solution to view data in a way that was most useful to them.
The platform creates remedial actions for failures or incidences
where they have not met standards, to ensure the proper response.
The status of logbooks and remedial actions can be monitored in
realtime on the app by management – from store managers to the
Managing Director. All employees can log in to mpro5 using their
credentials via SSO (Single Sign On), meaning the implementation
was simple and intuitive for users.
2021 ANNUAL REPORT & ACCOUNTS | STRATEGIC REVIEW 12
Case Study
Northern Trains
Presenting Northern Trains
Digital Train Cleaning Solution
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Leveraging TP and SQRs
Train Presentation (TP) is a crucial aspect of any
rail franchise’s operations. How clean the train is
affects the passenger experience significantly and
will be a cornerstone of the new Service Quality
Regimes (SQRs).
Northern Trains have leveraged our platform to drastically improve the
presentation of all their trains. This has helped to drive their SQR scores
up. TP encompasses all aspects of cleaning including seats, floors, touch
points and brightwork, as well as making sure the bins are emptied and
that the toilets are clean and hygienic to use.
Covid has also made it necessary to disinfect all touch points regularly.
Staff use their devices to follow instructions, record their work and
conduct audits via the mpro5 app. This data is captured in real-time and
sent straight to their cloud-based platform. The platform automates
remedial actions and collates data in a structured way that makes it
easy to create reports, identify pain points and drive improvements.
Results
Jobs and data collection have been intrinsically linked by using
workflows to carry out train cleans. This fully joined-up system stops
things falling through the cracks and ensures staff carry out all their
duties. TP has been improved by a large degree and consequently
pushed an uplift in Northern’s SQR scores.
Real visibility of their data has empowered management to spot trends
and change cultural behaviour. Data is now used proactively to improve
their processes rather than simply passively recording compliance.
A digitised process has also made a real difference for TP teams on
the ground. It makes their daily tasks easier and helps to raise the
profile of their work. It allows them to prove what a good job they’re
doing and prevents them from feeling like the easy scapegoat when
customers complain about cleanliness. It also gives them the data –
and the voice – to request extra support from their managers when
they need it.
Problem
A TP team might have just a few minutes to achieve an acceptable
clean. The number of people in a team or the amount of time a
carriage is available can vary massively, which makes delivering a
consistent result exceedingly difficult.
Northern often had to take customer accusations of uncleanliness at
face value because they had no unquestionable evidence of work
carried out.
The franchise was using a paper system to record their TP processes.
Unreliable, inefficient and ineffectual, this system was barely held
together by manual intervention. There was no accurate record of
tasks carried out and it was impossible to make real improvements
because there was no useful data to inform management on how to
best deploy their resources.
They lacked visibility of cleaning processes and had no real feedback
mechanism for performance. Data was being gathered but it was not
reliable, to the point that it became completely untrustworthy, causing
further conflict inside the business. This is made even more challenging
by the lack of control – a toilet could be cleaned and then used as
soon as the train leaves the platform, and the cleaners could then be
blamed for not having cleaned the toilet.
Solution
We configured Northern’s mpro5 platform to help them carry out
their cleaning and maintenance procedures. Jobs are carried out
using the app every step of the way, and workers can raise alerts that
trigger remedial actions. The data collected by staff completing jobs
can also trigger remedial actions, and this is all fed into the platform
to provide actionable data. Managers can monitor this using dynamic
data visuals that give them useful, granular detail to make meaningful
decisions to improve their train presentation.
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Since using mpro5 we have
enjoyed productivity gains
of up to 25%, with no drop
off in quality of service.
Joanna Simmons
Head of Train Presentation
25%
PRODUCTIVITY GAINS
INCREASED
VISIBILITY
INCREASED
PRODUCTIVITY
EMPOWERED
STAFF
2021 ANNUAL REPORT & ACCOUNTS | STRATEGIC REVIEW I
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Case Study
Chartwells
The right food
every time
Chartwells develops a new
audit that ensures they serve
the right food every time.
THOROUGH
SAFETY AND
QUALITY CHECKS
PROCESSES
IMPROVED AND
SIMPLIFIED
EMPOWERED
STAFF AND
MANAGEMENT
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Compliance is of course a priority
for us and part of that is completing
audits. Now we have mpro5 it is so
much easier to do these quickly and,
crucially, do them right.
Lorraine Foyle
Operations Director
Compliant Food Service, Every Time
For food service company Chartwells, the Daily
Food Quality Audit ensures that they meet customer
expectations safely, consistently and to the same
high standard every time.
Getting this wrong could have serious consequences for the health
of their customers, as well as reputational, legal and financial
repercussions. We worked with Chartwells to develop an audit solution
that is reliable and makes best practice easy to follow.
Problem
Chartwells manage over two thousand sites across the education
sector, from primary and secondary schools to colleges and
universities. Historically, there was no system for ensuring that the
right ingredients, menus and medical diets were served.
There was also no reliable way for managers to check that kitchen
staff were following procedures correctly and senior management
had no visibility of this.
Staff use their mpro5 app to carry out Daily Food Quality Audits at
individual units. This surfaces the data in two ways: firstly, for Regional
Managers to track food compliance on a live basis and secondly, in
structured visualisations that allow management to spot trends and issues,
allowing for more effective intervention. We also help Chartwells to
maintain consistent brand standards through a separate audit.
Results
Chartwells now have a reliable and simple system for guaranteeing
that they meet customer expectations for safety and quality. This
includes checking if the correct medical diets are served to the right
customers, if the right ingredients are being used and confirming food
safety practice is being followed.
Staff perform this audit, as well as a brand standards audit, easily and
thoroughly thanks to a detailed workflow that can only be completed
by filling in all the appropriate information. This means that staff can
no longer abandon jobs in the “to do” pile. Answers to questions
can trigger remedial actions which generate their own data so that
managers can check the progress of outstanding jobs.
Staff have appreciated the change, saying that it makes these
important processes easier to follow and provides better
accountability. Real visibility of their data has empowered
management to spot trends and change cultural behaviour. Chartwells
can now proactively improve their processes in an agile manner.
Remedial or corrective actions were completed either by spreadsheet
or email, resulting in poor consistency and no real audit trail. This was
especially concerning with regards to food safety, which could have
serious health implications for customers. It was a struggle to meet
customer expectations consistently.
Solution
Using the mpro5 platform, we worked with Chartwells to create and
digitise their Daily Food Quality Audit. Kitchen staff perform these
checks using the app, which guide them through every necessary step.
Workflows can trigger remedial actions and managers can see
live status updates on any that are outstanding or completed. We
were also able break this audit into smaller sections to make it more
manageable and easier to verify.
Devices send audit data to the mpro5 platform, where users can see
useful visualisations of data and drill down into anything they need
more detail on. Staff are also given detailed instructions on how to
best carry out any procedure, including food preparation, ensuring
the offering stays consistently high in quality.
2021 ANNUAL REPORT & ACCOUNTS | STRATEGIC REVIEW 16
Case Study
NHS
Keeping Coventry and
Warwickshire NHS Trust
Properties Safe
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Safety First For NHS Trust
NHS Mental Health trusts often have a large estate
to manage including multiple sites, buildings and
clinics that require maintenance and compliance
checks, as well as handling large numbers of
reactive issues. These verification checks are often
the source of the reactive tasks, which need to be
tracked and closed effectively.
The safety of sites in a trust is of paramount importance as getting
it wrong can have profound consequences for medical staff,
operational teams and patients. Managing this process is complex as
it requires cross-departmental coordination that would normally be
time-consuming and costly.
Results
The mpro5 configuration for this trust gives them unprecedented
visibility across their estate and a new Works Management System
(WMS) that can handle the reactive tasks raised with the Trust’s
Estates Management helpdesk. Their platform also monitors the status
of compliance for all statutory risk types, both holistically and on a
site-by-site basis.
This allowed them to switch off the obsolete system and provided a
solid foundation to start expanding the use of our software across the
Estates department. The first addition was a more detailed fire door
check process, and the trust will soon be using the platform as their
National Standards of Cleaning Auditing solution, allowing them to
retire a system that they struggled with for years.
Next on the list is a building condition survey and asset tagging across
the estate, widening the digital footprint, and enabling yet more
processes to come within the remit of the mpro5 platform.
Problem
Managing 110 varied buildings under a variety of freehold and
leasehold arrangements in a healthcare setting, where safety is
paramount, is a sprawling challenge. The trust’s previous system
was becoming out-dated and failing to keep pace with their
requirements, but CWPT had just six weeks remaining on their
existing supplier’s contract and would have been forced to renew
for a full 12 months. They needed us to configure a solution, with
171 functional requirements, to replace the existing system before
they were forced to renew.
Solution
With an urgent deadline of six weeks before their existing system
was switched off, we fully configured and deployed mpro5 within
four, allowing two weeks for refining and testing before “Go Live”.
The system carries out maintenance schedules as well as allowing
the real-time allocation of reactive tasks, providing feedback to
the Estates team and the responsible persons from the buildings.
Managing SLAs, Statutory PPM tasks and handling external work
tasks that are passed out to a wide network of sub-contractors,
mpro5 ensures compliance and the timely completion of jobs and
reporting.
The platform also provides overviews of any building and the
reactive tasks which have taken place.
17
I just wanted to say thank you to
the whole team at mpro5 – they
covered more ground in the six
weeks than our old system did in
three years. This was the first step
in realising my vision for the Estates
Department at CWPT.
Sat Padda
Senior Compliance Manager
INCREASED
OPERATIONAL
EFFECTIVENESS
IMPROVED
PROCESS
COMPLIANCE
DRIVING
PRODUCTIVITY
GAINS
2021 ANNUAL REPORT & ACCOUNTS | STRATEGIC REVIEW 18
Strategic Report
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:
•
Increased contracted revenues
• Strengthened cashflows
• Geographical expansion
•
Increased profitability
• Higher returns for stakeholders will be achieved.
Business Model
The Crimson Tide group provides its mpro5 software, 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 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 4, 6
and 7 respectively.
At 31 December 2021 Crimson Tide had a total of 47 employees and directors analysed as follows:
Directors
Senior Managers
Other employees
Male
5
3
31
Female
1
2
5
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.
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 Hubspot as its customer relationship management system to record and monitor dealings with customers and potential
new clients.
Principal Risks and Uncertainties
The company faces a number of business risks and uncertainties due to macro-economic trading conditions. In view of this , the directors are
looking carefully at both existing and potential new markets. The table below sets out the key risks that have been identified, with the company’s
approach to mitigating those risks.
Risk
Covid-19
Exposure to foreign economies
Impact on company
Covid-19 has not had a significant impact on the
company, however there is an increased risk of wider
economic disruption that may impact customer demand
and margins in the future.
The company has limited overseas markets at present,
but even these limited operations give rise to foreign
exchange risks.
Product obsolescence
The technology industry is fast moving and there is a
reputational risk with being associated with out of date
products.
Mitigation
The company has a loyal but diverse customer base,
both in terms of revenue and concentration, reducing its
exposure to a temporary downturn in trade.
Foreign exchange currency is mitigated by careful use
of foreign currency contracts. The directors are taking a
cautious approach to expansion into overseas markets
and focus on markets where domestic customers have
overseas operations.
Funds raised during a capital fund raise in 2021 will be
partially invested in improving the product platform.
A consumer version of the company’s enterprise
application, focused on trades people, is also being
developed.
19
Strategic Report CONTINUED
Future developments
The directors anticipate that the business environment will remain competitive. They believe that the company is in a good financial position
and that the risks that have been identified are being well managed. With careful focus on appropriate geographical diversification and
development of a new product, as well as continuous review of the state of the market and the activities of competitors, the directors are
confident in the company’s ability to maintain and build on this position.
Research and development
The company is currently undertaking research and development to improve the performance of its mobile applications and integrated reporting
platform. A consumer focused version of the company’s enterprise application is also in development.
Signed on behalf of the Directors
Barrie Whipp
Founder & Chairman
15 June 2022
2021 ANNUAL REPORT & ACCOUNTS | STRATEGIC REVIEW 20
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Board of Directors
Directors’ Report
Corporate Governance Statement
Independent Auditor’s Report
22
24
27
30
2021 ANNUAL REPORT & ACCOUNTS | CORPORATE GOVERNANCE
22
Board of Directors
The Board of Directors supervises
the management of Crimson Tide
and looks after the interests
of Shareholders. The re-election
of Directors is sought annually at
the Annual General Meeting.
Barrie Reginald John Whipp
(aged 61, Executive Chairman)
Barrie founded Crimson Tide in 1996 and he formulated the ideas
behind the Group’s mobile data solutions in 2003, recruiting the current
management team in 2004. After a career in finance, he founded the
financial services arm of Tiphook plc. He later became Group Managing
Director of IAF Group plc which was subsequently admitted to the
Official List in 1994. He has served as a non-executive director of Wills
Group plc as well as a number of private companies. He is responsible
for setting the Group’s vision and strategy as well as setting goals and
targets for the Board.
Shares held:
29,810,213*
Annual Remuneration:
£173,861
*Mr Whipp’s wife holds an additional 38,000,000 ordinary shares
Tobias ‘Toby’ James Turness Hawkins
(aged 41, Group Sales and Marketing Director)
Toby Joined Crimson Tide in October 2017, having held numerous
sales and account management roles in his career, most recently, since
November 2015, as Enterprise Account Director for the OpenText
Corporation, a global leader of global enterprise information
management solutions. Prior to that Mr Hawkins worked as a sector
account manager for TestPlant Limited, a UK technology company which
delivers service assurance to digital businesses. Between 2008 and 2014
Mr Hawkins was the Commercial Director for Stevens Group Limited
which develops enterprise and SaaS software solutions.
Shares held:
Annual Remuneration:
333,333
£167,576
23
Stephen Keith Goodwin
(aged 63, Non-Executive Director)
Luke Anthony Jeffrey
(aged 39, CEO)
Steve was appointed as Crimson Tide’s Chief Executive in April 2004
but has subsequently changed role within the company to be Finance
Director, and now Non-Executive Director. Steve is a Certified
Accountant with over 20 years experience at Board level, 18 years as
a CEO. After training as an accountant working for Shell International
plc, he joined Tiphook plc in 1988 where he became Group Financial
Controller and later Finance Director of the trailer division. In 1993
Steve was appointed Managing Director of the rail division and in 1996
led the management team in a £30m management buyout working with
Prudential’s venture capital arm and HSBC. 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.
Shares held:
25,871,509*
Annual Remuneration:
£24,000
*Mr Goodwin also had an interest as a trustee in 9,150,000 Ordinary Shares of
0.1p each as at 31 December 2021 and 31 December 2020
Luke joined Crimson Tide from university in July 2005 having achieved
a Masters in Advance Computing Science and has been regularly
promoted since. He has made an invaluable contribution to the
development of our mobility solutions and has been fully involved in
many other software developments delivered to customers. Luke joined
the Board in July 2012 as Technical Director, progressing to Deputy
CEO and in 2018 becoming CEO. Luke is responsible for the continuing
evolution and implementation of our software products, services and
the business.
Shares held:
2,333,333
Annual Remuneration:
£125,706
Jacqueline Daniell
(aged 60, Non-Executive Director
and Deputy Chairperson)
Jacqueline was appointed as a non-executive director of Crimson Tide
in January 2021. She has over 16 years’ experience as founder, director
and CEO of education businesses that use digital technology to drive
positive change for young learners and the wider education sector.
Jacqueline’s previous background in marketing has demonstrated how
she has developed excellent relationships with key clients, stakeholders,
government, and corporate institutions. She also has a track record of an
ability to analyse trends, data, demographics, pricing models, and other
strategies for improvement.
Shares held:
1,672,240
Annual Remuneration:
£22,500
Pieter (‘Peter’) Maree Hurter
(aged 44, Finance Director)
Peter joined Crimson Tide in November 2018 as the Financial Controller
and was appointed to the Board as Finance Director and Company
Secretary on 1 July 2019. Peter is a Chartered Accountant and served
his articles with Deloitte. He has subsequently been a director of Moore
Stephens Chartered Accountants in South Africa, a Specialist with the
South African Revenue Service and Finance Director of a large agri-
processing group.
Shares held:
Annual Remuneration:
333,333
£117,142
2021 ANNUAL REPORT & ACCOUNTS | CORPORATE GOVERNANCE 24
Directors’ Report
The Directors present their report and the audited financial statements of the Group for the year ended 31 December 2021.
Principal Activities and Review of the Business
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 and the Company’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 2021 was £4,114,000 (2020: £3,542,000) and the total loss before tax was £579,000 (2020: profit
£532,000). The directors do not recommend payment of a final dividend.
Directors
The following directors held office during the year:
BRJ Whipp
GB Ashley (resigned 30 November 2021)
SK Goodwin
LA Jeffrey
TJT Hawkins
PM Hurter
JK Daniell
Directors’ Interest in Shares
Directors’ interests in the share capital of the Company, including family and pension scheme interests, were as follows:
Director
BRJ Whipp*
SK Goodwin***
GB Ashley**
JK Daniell
TJT Hawkins
PM Hurter
LA Jeffrey
Ordinary shares of £0.1p
2021
2020
29,810,213
25,871,509
18,354,718
1,672,240
333,333
333,333
2,333,333
82,820,132
30,611,484
18,354,718
-
-
-
2,000,000
*
Mr. Whipp’s wife holds an additional 38,000,000 Ordinary shares of £0.01 each as at 31 December 2021.
** Mr Ashley resigned as Director on 30 November 2021. Ms. Daniell was appointed as Director on 28 January 2021.
***
Mr. Goodwin also had an interest as a trustee in 9,150,000 Ordinary Shares of 0.1p each as at 31 December 2021 and 31 December 2020.
Directors’ interests in the share options, issued under the Group’s Enterprise Management Incentive Scheme, were as follows:
Director
SK Goodwin
LA Jeffrey
TH Hawkins
PM Hurter
Number of share options
2021
-
7,500,000
4,600,000
4,600,000
2020
2,500,000
1,000,000
-
-
25
Total
2021
£
18,000
24,000
22,500
173,861
167,576
125,706
117,142
Total
2020
£
15,000
12,000
-
177,083
251,025
121,400
90,050
Directors’ Report CONTINUED
Directors’ Remuneration
The remuneration of the Directors during the period is summarised below:
Non-executive
G B Ashley
S K Goodwin
J K Daniell
Executive
B R J Whipp
T J T Hawkins
L A Jeffrey
P M Hurter
Total
Fees and
salaries
£
18,000
24,000
22,500
143,861
109,467
105,298
92,271
515,397
Bonus
£
Pension
£
-
-
-
-
54,608
-
15,000
69,608
-
-
-
30,000
3,502
20,408
9,871
63,781
648,785
663,558
Mr. Ashley resigned as Director on 30 November 2021. Ms. Daniell was appointed as Director on 28 January 2021.
Significant Shareholdings
As at 18 May 2022 the shareholders’ register showed that the following shareholders had interests in 3% or more of the share capital of the
Company:
Shareholder
Canaccord Genuity Group Inc
Helen and Barrie Whipp
Gresham House Asset Management Limited
Lion Trust Investment Partners LLP
Herald Investment Management
Octopus Aim VCT plc
J W F Roth
S K Goodwin*
S J M Morris
No.
90,500,00
67,810,213
42,000,000
37,982,885
32,333,333
31,500,000
26,131,159
25,871,509
21,707,817
%
13.8
10.3
6.4
5.8
4.9
4.8
4.0
3.9
3.3
*
Mr. Goodwin also had an interest as a trustee in 9,150,000 Ordinary Shares of 0.1p each as at 31 December 2021 and 31 December 2020.
Strategic report
The company has chosen, in accordance with Companies Act 2006, s. 414C(11), to set out in the company’s strategic report information required
by Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008, Sch. 7 to be contained in the directors’ report. It
has done so in respect of future developments, research and development and financial instruments.
Financial Risk Management
The Company’s exposure to financial risk is set out in note 20 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 39 days (2018: 26 days). The Company is a holding
company and has no significant trade creditors.
2021 ANNUAL REPORT & ACCOUNTS | CORPORATE GOVERNANCE 26
Directors’ Report CONTINUED
Health, Safety and the Environment
The company operates responsibly with regard to its shareholders, employees, other stakeholders, the environment and the wider community.
The company is committed to the wellbeing 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 arms-length,
commercial basis.
Political and Charitable Contributions
No political or significant charitable donations were made during the period.
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 financial statements for each financial year. Under that law the Directors have elected to
prepare the financial statements in accordance with International Financial Reporting Standards (“IFRSs”) as adopted by the UK. Under company
law the Directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of
the Company and of the profit or loss of the Company 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;
•
state whether they have been prepared in accordance with IFRSs as adopted by the UK, 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 Company will continue in business.
The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Company’s transactions and
disclose with reasonable accuracy at any time the financial position of the Company and enable them to ensure that the financial statements
comply with the Companies Act 2006. Legislation in the United Kingdom governing the preparation and dissemination of financial statements
may differ from legislation in other jurisdictions. 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.
Adequacy of Information Supplied to 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.
Website Publication
The Directors are responsible for the maintenance and integrity of the information included on the Company’s website. Legislation in the United
Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.
Auditor
Shipleys LLP will be deemed to continue in office under the Companies Act 2006, S.487(2).
Signed by order of the board
Peter Hurter
Company Secretary
15 June 2022
Corporate Governance Statement
27
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 changes
to the AIM Rules requiring all AIM-listed companies to adopt and
comply with a recognised corporate governance code.
Compliance
The Board is aware of the need to protect the interests of all
shareholders. It seeks to balance the interests of small shareholders
with those of more substantial shareholders. The Board comprises
Directors with substantial holdings and small holdings.
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.
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.
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
shareholders 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 committees. 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
The Board should understand the views of the Company’s other key
stakeholders and describe in the annual report how their interest and
the matters set out in section 172 of the companies Act 2006 have
been considered in board discussions and decision-making. 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.
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.
2021 ANNUAL REPORT & ACCOUNTS | CORPORATE GOVERNANCE 28
Corporate Governance Statement CONTINUED
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, full
details of which are contained in the Corporate Governance section.
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 Directors’ period of service in isolation to determine
their independence.
Crimson Tide has appointed two non-executive directors who
provide an independent view of the company’s activities. Mr Stephen
Goodwin and Ms Jacqueline Daniell are non-executive directors.
By his length of tenure, Mr Goodwin does not fulfil the technical
definition of “independent” as he has served as Director for longer
than the prescribed 9 years. The Board unanimously supports the
retention of Mr Goodwin given his experience and wise counsel. Mr
Goodwin is a shareholder 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.
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, 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.
Corporate Governance Statement CONTINUED
29
•
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
this 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; and
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.
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 a Chairman and CEO. 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 Chairman
retains responsibility for product vision, corporate finance and city
matters in line with his experience. 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;
2021 ANNUAL REPORT & ACCOUNTS | CORPORATE GOVERNANCE 30
Independent Auditor’s Report to the
Shareholders of Crimson Tide plc
Conclusions Relating to Going Concern
In auditing the financial statements, we have concluded that the
directors’ use of the going concern basis of accounting in the
preparation of the financial statements is appropriate.
Based on the work we have performed, we have not identified
any material uncertainties relating to events or conditions that,
individually or collectively, may cast significant doubt on the
company’s ability to continue as a going concern for a period of at
least twelve months from when the financial statements are authorised
for issue.
Our responsibilities and the responsibilities of the directors with
respect to going concern are described in the relevant sections of this
report.
Our Approach to the Audit
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 2021 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 UK 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
2021 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 UK;
the Parent Company financial statements have been properly
prepared in accordance with IFRSs as adopted by the UK and as
applied in accordance with the provisions of the Companies Act
2006; and
•
the financial statements have been prepared in accordance with
the requirements of the Companies Act 2006.
Basis for Opinion
We conducted our audit in accordance with International
Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our
responsibilities under those standards are further described in
the Auditor’s Responsibilities for the audit of the group 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.
31
Independent Auditor’s Report to the
Shareholders of Crimson Tide plc CONTINUED
Key audit matter
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.
Fraud in Revenue Recognition
There is a risk that revenue is materially
understated due to fraud.
Risk that intercompany amounts may be
misstated
There is the risk that related party transactions are
potentially incomplete or materially misstated.
Risk that the group is not up to date with AIM
compliance requirements
There is the risk of censure and fines due to non-
compliance.
Risk of material overstatement of investments
There is a risk of impairment in investments
We tested the appropriateness of journal entries recorded in the general ledger and
other adjustments made in the preparation of the financial statements.
In addition, we reviewed accounting estimates for biases that could result in material
misstatement due to fraud.
We obtained an understanding of the business rationale of significant transactions that
we became aware of that were outside of the normal course of business for the group,
or that otherwise appeared to be unusual given our understanding of the entity and its
environment.
We considered the group’s immediately available assets, as well as the level of any
available committed facilities.
We considered the impact of the Coronavirus on the company’s operations and whether
the relevant disclosures have been included in the financial statements.
We reconciled the group records and contracts and ensured that no trading activity
went through the plc.
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.
We confirmed intercompany balances through an inspection of accounting records of
the other group companies. Where the subsidiary showed a deficit on the balance sheet,
we considered the need to provide against the investment.
We performed the following work:
-
-
Discussed with management the controls in place to ensure that the group is up to
date with requirements
Reviewed media announcements to ensure there were no breaches of AIM
compliance
We performed a disclosure checklist to ensure that the financial statements are AIM
compliant.
We performed the following work:
-
-
Discussed with management the carrying value of investments with management in
order to see if there is any indication of impairment
Inspected draft accounts of subsidiaries nothing both net asset position and
underlying performance of the companies.
2021 ANNUAL REPORT & ACCOUNTS | CORPORATE GOVERNANCE 32
Independent Auditor’s Report to the
Shareholders of Crimson Tide plc CONTINUED
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 £170,116 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 other information comprises the information included in the
annual report other than the financial statements and our auditor’s
report thereon. The directors are responsible for the other
information contained within the annual report. Our opinion on
the financial statements does not cover the other information and,
except to the extent otherwise explicitly stated in our report, we
do not express any form of assurance conclusion thereon. Our
responsibility is to read the other information and, in doing so,
consider whether the other information is materially inconsistent
with the financial statements or our knowledge obtained in
the course of the audit, or otherwise appears to be materially
misstated. If we identify such material inconsistencies or apparent
material misstatements, we are required to determine whether this
gives rise to a material misstatement in the financial statements
themselves. If, based on the work we have performed, we conclude
that there is a material misstatement of this other information, we
are required to report that fact.
We have nothing to report in this regard.
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 Strategic Report and the Directors
Report for the financial year for which the financial statements are
prepared is consistent with the financial statements; and
the Strategic Report and the Directors Report have been
prepared in accordance with applicable legal requirements.
Matters on Which we are Required to Report by
Exception
In the light of the knowledge and understanding of the Group and the
Parent Company and its environment obtained in the course of the
audit, we have not identified material misstatements in the Strategic
Report or the Directors Report.
We have nothing to report in respect of the following matters
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 26 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 an auditor’s
report that includes our opinion. Reasonable assurance is a high
level of assurance but is not a guarantee that an audit conducted in
accordance with ISAs (UK) will always detect a material misstatement
when it exists. Misstatements can arise from fraud or error and are
considered material if, individually or in the aggregate, they could
reasonably be expected to influence the economic decisions of
users taken on the basis of these financial statements. Irregularities,
including fraud, are instances of non-compliance with laws and
regulations. We design procedures in line with our responsibilities,
outlined above, to detect material misstatements in respect of
irregularities, including fraud. The extent to which our procedures are
capable of detecting irregularities, including fraud is detailed below:
Independent Auditor’s Report to the
Shareholders of Crimson Tide plc CONTINUED
33
Use of our Report
This report is made solely to the Company’s members, as a body, in
accordance with Chapter 3 of Part 16 of the Companies Act 2006.
Our audit work has been undertaken so that we might state to the
Company’s members those matters we are required to state to them
in 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.
Joseph Kinton (Senior Statutory Auditor)
For and on behalf of Shipleys LLP
Chartered Accountants & Statutory Auditor
10 Orange Street
Haymarket
London
WC2H 7DQ
Date: 15 June 2022
•
•
•
We obtained an understanding of the legal and regulatory
frameworks that are applicable to the Group and determined
the most significant are those that relate to the reporting
framework ((International Financial Reporting Standards (IFRSs)
as adopted by the UK and, as regards the Parent Company
financial statements, as applied in accordance with the provisions
of the Companies Act 2006)) and the relevant tax compliance
regulations in which the Group operates.
We understood how the Group is complying with those
frameworks by making enquiries on the management and
those responsible for legal and compliance procedures. We
corroborated our enquiries through our review of board minutes
and any correspondence received from regulatory bodies.
We assessed the susceptibility of the Group’s financial statements
to material misstatement, including how fraud might occur by
enquiring with management during the planning, fieldwork and
completion phase of our audit. We considered the controls that
the Group has established to address risks identified, or that
otherwise prevent, deter and detect fraud and how management
monitors those controls. Where the risk was considered to
be higher, we performed audit procedures to address each
identified fraud risk including revenue recognition. These
procedures included making enquiries on the management;
journal entry testing; review of bank letters, board minutes and
any correspondence received from regulatory bodies; reviewing
financial statement disclosures and testing to supporting
documentation to assess compliance with applicable laws
and regulations. These procedures were designed to provide
reasonable assurance that the financial statements were free from
fraud or error.
•
Based on this understanding we designed our audit procedures
to identify non-compliance with such laws and regulations. Our
procedures involved journal entry testing, with a focus on manual
journals and journals indicating large or unusual transactions
based on our understanding of the business; enquiries of the
management and focus testing.
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.
2021 ANNUAL REPORT & ACCOUNTS | CORPORATE GOVERNANCE 34
F i n a n c i a l
S t a t e m e n t s
Consolidated Statement of Profit or Loss and Comprehensive Income
Consolidated Statement of Financial Position
Consolidated Statement of Changes in Equity
Consolidated Statement of Cash Flows
Notes to the Financial Statements
Company Statement of Financial Position
Company Statement of Changes in Equity
Company Statement of Cash Flows
Officers and Professional Advisors
35
36
37
38
39
53
54
55
56
Consolidated Statement of Profit or
Loss and Comprehensive Income
FOR THE YEAR ENDED 31 DECEMBER 2021 2021
Revenue
Cost of Sales
Gross Profit
Other income
Administrative expenses
Finance costs
(Loss)/Profit before income tax expense
Income tax expense
(Loss)/Profit after income tax
(Loss)/Earnings per share
Basic
Diluted
Consolidated Statement of Comprehensive Income
(Loss)/Profit for the year
Items that may be classified subsequently to profit and loss
Exchange differences on translating foreign operations
Total comprehensive income/(loss) for the year
Note
3
4
4
6
7
7
2021
£000
4,114
(631)
3,483
142
(4,197)
(10)
(582)
(32)
(614)
(0.10)
(0.10)
(614)
2
(612)
35
2020
£000
3,542
(677)
2,865
5
(2,309)
(29)
532
202
734
0.16
0.16
734
4
738
2021 ANNUAL REPORT & ACCOUNTS | FINANCIAL STATEMENTS
36
Consolidated Statement of
Financial Position
AT 31 DECEMBER 20212021
Assets
Non-current assets
Intangible assets
Property, plant and equipment
Right-of-use asset
Deferred tax asset
Total non-current assets
Current assets
Inventories
Trade and other receivables
Cash and cash equivalents
Total current assets
Total assets
Liabilities
Current liabilities
Trade and other payables
Borrowings
Lease liabilities
Total current liabilities
Non-current liabilities
Borrowings
Lease liabilities
Total non-current liabilities
Total liabilities
Net assets
Equity
Issued capital
Share premium
Other reserves
Reverse acquisition reserve
Retained profits
Total equity
Note
8
9
10
11
12
13
14
15
16
15
16
17
18
18
18
18
2021
£000
3,282
167
36
-
3,485
-
1,079
5,736
6,815
10,300
1,160
5
98
1,263
-
-
-
1,263
9,037
657
5,590
481
(5,244)
7,553
9,037
Restated
2020
£000
2,798
235
92
32
3,157
6
864
1,175
2,045
5,202
907
8
181
1,096
5
94
99
1,195
4,007
457
148
479
(5,244)
8,167
4,007
The financial statements were approved by the board of directors on 15 June 2022 and signed on its behalf by:
BRJ Whipp
Director
LA Jeffrey
Director
Company Registration Number 00113845
Consolidated Statement of
Changes in Equity
AT 31 DECEMBER 2021 2021
Issued
capital
£000
Share
premium
£000
Other
Reserves
£000
Consolidated
Balance at 1 January 2020
Profit after income tax expense for the year
Translation movement
Share options exercised
Balance at 31 December 2020
Issue of shares
Loss after income tax expense for the year
Translation movement
Balance at 31 December 2021
457
-
-
-
457
200
-
-
657
148
-
-
-
148
5,442
-
-
475
-
4
-
479
-
-
2
37
Reserves
£000
(5,244)
-
-
-
(5,244)
-
-
-
Retained
earnings
£000
7,433
734
-
-
8,167
-
(614)
-
Total
equity
£000
3,269
734
4
-
4,007
5,642
(614)
2
5,590
481
(5,244)
7,553
9,037
2021 ANNUAL REPORT & ACCOUNTS | FINANCIAL STATEMENTS 38
Consolidated Statement of Cash Flows
FOR THE YEAR ENDED 31 DECEMBER 2021021
Note
Profit before taxation
Adjustments for:
Amortisation of intangibles
Depreciation of property, plant and equipment
Depreciation of right-of-use assets
Unrealised currency translation gains
Interest paid
Operating cash flows before movements in working capital
Decrease in inventories
Increase in trade and other receivables
Increase in trade and other payables
Cash generated by operations
Income taxes received
Interest paid in cash
Net cash from operating activities
Cash flows from investing activities
Purchases of property, plant and equipment
Purchases of other intangible assets
Development expenditure capitalised
Net cash used in investing activities
Cash flows from financing activities
Net proceeds from share issues
Repayments of borrowings
Repayments of lease liability
Net cash used in financing activities
Net Increase/(decrease) in cash and cash equivalents
Cash and cash equivalents at the beginning of the financial year
Cash and cash equivalents at the end of the financial year
13
2021
£000
(582)
570
129
56
2
10
185
6
(215)
253
229
-
(10)
219
(61)
(90)
(964)
(1,115)
5,642
(8)
(177)
5,457
4,561
1,175
5,736
Restated
2020
£000
532
216
111
57
4
29
949
6
356
433
1,744
202
(27)
1,919
(21)
-
(896)
(917)
-
(21)
(126)
(147)
855
320
1,175
39
Notes to the Financial Statements
AT 31 DECEMBER 2021
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 Brockbourne 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).
1. Significant accounting policies
The principal accounting policies adopted in the preparation of the
financial statements are set out below. These policies have been
consistently applied to all the years presented, unless otherwise stated.
New or amended Accounting Standards and
Interpretations adopted
The company has adopted all of the new or amended Accounting
Standards and Interpretations issued by the International Accounting
Standards Board (‘IASB’) that are mandatory for the current
reporting period.
Any new or amended Accounting Standards or Interpretations that
are not yet mandatory have not been early adopted.
The following Accounting Standards and Interpretations are most
relevant to the company.
Basis of preparation
These general purpose financial statements have been prepared in
accordance with International Financial Reporting Standards (‘IFRS’),
as appropriate for profit oriented entities.
As a result of the UK leaving the EU, the International Accounting
Standards and European Public Limited-Liability Company
(Amendment etc.) (EU Exit) Regulations 2019 (SI 2019/685) require all
companies with accounting periods beginning on or after 1 January
2021 to apply UK-adopted IAS. In the previous year the company
applied International Financial Reporting Standards as adopted in the
European Union (EU-adopted IFRS). Prior year comparatives have not
been restated for this change. On 1 January 2021 UK-adopted IAS
and EU-adopted IFRS were identical. Since this date timing differences
in endorsement have arisen, however no amendments would be
required to these financial statements if they were to be prepared in
accordance with EU-adopted IFRS as at 31 December 2021.
Historical cost convention
The financial statements have been prepared under the historical cost
convention, except for, where applicable, the revaluation of financial
assets and liabilities at fair value through profit or loss, financial
assets at fair value through other comprehensive income, investment
properties, certain classes of property, plant and equipment and
derivative financial instruments.
Critical accounting estimates
The preparation of the financial statements requires the use of certain
critical accounting estimates. It also requires management to exercise
its judgement in the process of applying the company’s accounting
policies. The areas involving a higher degree of judgement or
complexity, or areas where assumptions and estimates are significant
to the financial statements, are disclosed in note 2.
Foreign currency translation
The financial statements are presented in UK Sterling, which is
Crimson Tide mpro Limited’s functional and presentation currency.
Foreign currency transactions
Foreign currency transactions are translated into UK Sterling using
the exchange rates prevailing at the dates of the transactions. Foreign
exchange gains and losses resulting from the settlement of such
transactions and from the translation at financial year-end exchange
rates of monetary assets and liabilities denominated in foreign
currencies are recognised in profit or loss.
Revenue from contracts with customers
Revenue is recognised at an amount that reflects the consideration to
which the consolidated entity is expected to be entitled in exchange
for transferring goods or services to a customer. For each contract
with a customer, the consolidated entity: identifies the contract with
a customer; identifies the performance obligations in the contract;
determines the transaction price which takes into account the time
value of money; allocates the transaction price to the separate
performance obligations on the basis of the relative stand-alone
selling price of each distinct good or service to be delivered; and
recognises revenue when or as each performance obligation is
satisfied in a manner that depicts the transfer to the customer of the
goods or services promised.
Rendering of services
Revenue from a contract to provide services is recognised over time
as the services are rendered based on either a fixed price or an
hourly rate.
Interest
Interest revenue is recognised as interest accrues using the effective
interest method. This is a method of calculating the amortised cost of
a financial asset and allocating the interest income over the relevant
period using the effective interest rate, which is the rate that exactly
discounts estimated future cash receipts through the expected life of
the financial asset to the net carrying amount of the financial asset.
Other revenue
Other revenue is recognised when it is received or when the right to
receive payment is established.
Going concern
The directors have carefully considered the company’s financial
position, liquidity and future performance. As set out in the strategic
report, the directors believe the company and group are well placed
to manage its business risks successfully. Accordingly they have a
reasonable expectation that the company and group have adequate
resources to continue in operational existence for the foreseeable
future and they believe it is appropriate to apply the going concern
basis of accounting in preparing the financial statements.
Income tax
The income tax expense or benefit for the period is the tax payable on
that period’s taxable income based on the applicable income tax rate
for each jurisdiction, adjusted by the changes in deferred tax assets and
liabilities attributable to temporary differences, unused tax losses and
the adjustment recognised for prior periods, where applicable.
2021 ANNUAL REPORT & ACCOUNTS | FINANCIAL STATEMENTS 40
Notes to the Financial Statements CONTINUED
AT 31 DECEMBER 2021
Deferred tax assets and liabilities are recognised for temporary
differences at the tax rates expected to be applied when the assets
are recovered or liabilities are settled, based on those tax rates that
are enacted or substantively enacted, except for:
•
•
When the deferred income tax asset or liability arises from
the initial recognition of goodwill or an asset or liability in a
transaction that is not a business combination and that, at the time
of the transaction, affects neither the accounting nor taxable
profits; or
When the taxable temporary difference is associated with
interests in subsidiaries, associates or joint ventures, and the
timing of the reversal can be controlled and it is probable that the
temporary difference will not reverse in the foreseeable future.
Deferred tax assets are recognised for deductible temporary
differences and unused tax losses only if it is probable that future
taxable amounts will be available to utilise those temporary
differences and losses.
The carrying amount of recognised and unrecognised deferred tax
assets are reviewed at each reporting date. Deferred tax assets
recognised are reduced to the extent that it is no longer probable
that future taxable profits will be available for the carrying amount
to be recovered. Previously unrecognised deferred tax assets are
recognised to the extent that it is probable that there are future
taxable profits available to recover the asset.
Deferred tax assets and liabilities are offset only where there is a
legally enforceable right to offset current tax assets against current
tax liabilities and deferred tax assets against deferred tax liabilities;
and they relate to the same taxable authority on either the same
taxable entity or different taxable entities which intend to settle
simultaneously.
Current and non-current classification
Assets and liabilities are presented in the statement of financial
position based on current and non-current classification.
An asset is classified as current when: it is either expected to be
realised or intended to be sold or consumed in the company’s normal
operating cycle; it is held primarily for the purpose of trading; it is
expected to be realised within 12 months after the reporting period;
or the asset is cash or cash equivalent unless restricted from being
exchanged or used to settle a liability for at least 12 months after the
reporting period. All other assets are classified as non-current.
A liability is classified as current when: it is either expected to be
settled in the company’s normal operating cycle; it is held primarily
for the purpose of trading; it is due to be settled within 12 months after
the reporting period; or there is no unconditional right to defer the
settlement of the liability for at least 12 months after the reporting
period. All other liabilities are classified as non-current.
Deferred tax assets and liabilities are always classified as non- current.
Cash and cash equivalents
Cash and cash equivalents includes cash on hand, deposits held at call
with financial institutions, other short-term, highly liquid investments
with original maturities of three months or less that are readily
convertible to known amounts of cash and which are subject to an
insignificant risk of changes in value. For the statement of cash flows
presentation purposes, cash and cash equivalents also includes bank
overdrafts, which are shown within borrowings in current liabilities on
the statement of financial position.
Trade and other receivables
Trade receivables are initially recognised at fair value and
subsequently measured at amortised cost using the effective interest
method, less any allowance for expected credit losses. Trade
receivables are generally due for settlement within 30 days.
The company has applied the simplified approach to measuring
expected credit losses, which uses a lifetime expected loss allowance.
To measure the expected credit losses, trade receivables have been
grouped based on days overdue.
Other receivables are recognised at amortised cost, less any
allowance for expected credit losses.
Investments and other financial assets
Investments and other financial assets, other than investments in
associates, are initially measured at fair value. Transaction costs
are included as part of the initial measurement, except for financial
assets at fair value through profit or loss. Such assets are subsequently
measured at either amortised cost or fair value depending on their
classification. Classification is determined based on both the business
model within which such assets are held and the contractual cash flow
characteristics of the financial asset unless an accounting mismatch is
being avoided.
Financial assets are derecognised when the rights to receive cash
flows have expired or have been transferred and the company has
transferred substantially all the risks and rewards of ownership. When
there is no reasonable expectation of recovering part or all of a
financial asset, its carrying value is written off.
Financial assets at fair value through profit or loss
Financial assets not measured at amortised cost or at fair value
through other comprehensive income are classified as financial
assets at fair value through profit or loss. Typically, such financial
assets will be either: (i) held for trading, where they are acquired
for the purpose of selling in the short-term with an intention of
making a profit, or a derivative; or (ii) designated as such upon initial
recognition where permitted. Fair value movements are recognised in
profit or loss.
Financial assets at fair value through other comprehensive income
Financial assets at fair value through other comprehensive income
include equity investments which the company intends to hold for the
foreseeable future and has irrevocably elected to classify them as
such upon initial recognition.
41
Notes to the Financial Statements CONTINUED
AT 31 DECEMBER 2021
Impairment of financial assets
The company recognises a loss allowance for expected credit losses
on financial assets which are either measured at amortised cost or
fair value through other comprehensive income. The measurement of
the loss allowance depends upon the company’s assessment at the
end of each reporting period as to whether the financial instrument’s
credit risk has increased significantly since initial recognition, based
on reasonable and supportable information that is available, without
undue cost or effort to obtain.
Property, plant and equipment
Plant and equipment is stated at historical cost less accumulated
depreciation and impairment. Historical cost includes expenditure
that is directly attributable to the acquisition of the items.
Depreciation is calculated as follows to write off the net cost of each
item of property, plant and equipment (excluding land) over their
expected useful lives:
Office and computer equipment
PDA and smartphone equipment
Fixtures and fittings
5 years straight line
3 years straight line
4 years reducing balance
The residual values, useful lives and depreciation methods are
reviewed, and adjusted if appropriate, at each reporting date.
An item of property, plant and equipment is derecognised upon disposal
or when there is no future economic benefit to the company. Gains and
losses between the carrying amount and the disposal proceeds are
taken to profit or loss. Any revaluation surplus reserve relating to the
item disposed of is transferred directly to retained profits.
Right-of-use assets
A right-of-use asset is recognised at the commencement date of a
lease. The right-of-use asset is measured at cost, which comprises the
initial amount of the lease liability, adjusted for, as applicable, any
lease payments made at or before the commencement date net of any
lease incentives received, any initial direct costs incurred, and, except
where included in the cost of inventories, an estimate of costs expected
to be incurred for dismantling and removing the underlying asset, and
restoring the site or asset.
Right-of-use assets are depreciated on a straight-line basis over
the unexpired period of the lease or the estimated useful life of
the asset, whichever is the shorter. Where the company expects to
obtain ownership of the leased asset at the end of the lease term, the
depreciation is over its estimated useful life. Right-of use assets are
subject to impairment or adjusted for any remeasurement of lease
liabilities.
The company has elected not to recognise a right-of-use asset and
corresponding lease liability for short-term leases with terms of
12 months or less and leases of low-value assets. Lease payments on
these assets are expensed to profit or loss as incurred.
Except for short-term leases and leases of low-value assets, right-of-
use assets and corresponding lease liabilities are recognised in the
statement of financial position. For classification within the statement
of cash flows, the interest portion is disclosed in operating activities
and the principal portion of the lease payments are separately
disclosed in financing activities. For lessor accounting, the standard
does not substantially change how a lessor accounts for leases.
Intangible assets
Intangible assets acquired as part of a business combination, other
than goodwill, are initially measured at their fair value at the date
of the acquisition. Intangible assets acquired separately are initially
recognised at cost. Indefinite life intangible assets are not amortised
and are subsequently measured at cost less any impairment. Finite life
intangible assets are subsequently measured at cost less amortisation
and any impairment. The gains or losses recognised in profit or loss
arising from the derecognition of intangible assets are measured
as the difference between net disposal proceeds and the carrying
amount of the intangible asset. The method and useful lives of finite
life intangible assets are reviewed annually. Changes in the expected
pattern of consumption or useful life are accounted for prospectively
by changing the amortisation method or period.
Amortisation is calculated on a straight line basis to write off the
net cost of each item of intangible asset over its expected useful life
as follows:
Enterprise Development Expenditure
10 years straight line
Consumer Focused Development Expenditure 5 years straight line
3 years straight line
Website Development costs
Incremental contract costs
3 years straight line
Research and development
Research costs are expensed in the period in which they are incurred.
Development costs are capitalised when it is probable that the
project will be a success considering its commercial and technical
feasibility; the company is able to use or sell the asset; the company
has sufficient resources and intent to complete the development; and
its costs can be measured reliably. Capitalised development costs are
amortised on a straight-line basis over the period of their expected
benefit, being their finite life of 10 years.
Impairment of non-financial assets
Non-financial assets are reviewed for impairment whenever events or
changes in circumstances indicate that the carrying amount may not
be recoverable. An impairment loss is recognised for the amount by
which the asset’s carrying amount exceeds its recoverable amount.
Recoverable amount is the higher of an asset’s fair value less costs
of disposal and value-in-use. The value-in-use is the present value of
the estimated future cash flows relating to the asset using a pre-tax
discount rate specific to the asset or cash- generating unit to which
the asset belongs. Assets that do not have independent cash flows are
grouped together to form a cash-generating unit.
Trade and other payables
These amounts represent liabilities for goods and services provided
to the company prior to the end of the financial year and which are
unpaid. Due to their short-term nature they are measured at amortised
cost and are not discounted. The amounts are unsecured and are
usually paid within 30 days of recognition.
Borrowings
Loans and borrowings are initially recognised at the fair value
of the consideration received, net of transaction costs. They are
subsequently measured at amortised cost using the effective interest
method.
2021 ANNUAL REPORT & ACCOUNTS | FINANCIAL STATEMENTS 42
Notes to the Financial Statements CONTINUED
AT 31 DECEMBER 2021
Lease liabilities
A lease liability is recognised at the commencement date of a lease.
The lease liability is initially recognised at the present value of the
lease payments to be made over the term of the lease, discounted
using the interest rate implicit in the lease or, if that rate cannot be
readily determined, the company’s incremental borrowing rate.
Lease payments comprise of fixed payments less any lease incentives
receivable, variable lease payments that depend on an index or a
rate, amounts expected to be paid under residual value guarantees,
exercise price of a purchase option when the exercise of the option
is reasonably certain to occur, and any anticipated termination
penalties. The variable lease payments that do not depend on an
index or a rate are expensed in the period in which they are incurred.
Lease liabilities are measured at amortised cost using the effective
interest method. The carrying amounts are remeasured if there is a
change in the following: future lease payments arising from a change
in an index or a rate used; residual guarantee; lease term; certainty
of a purchase option and termination penalties. When a lease liability
is remeasured, an adjustment is made to the corresponding right-of
use asset, or to profit or loss if the carrying amount of the right-of-use
asset is fully written down.
Finance costs
Finance costs attributable to qualifying assets are capitalised as part
of the asset. All other finance costs are expensed in the period in
which they are incurred.
Provisions
Provisions are recognised when the company has a present (legal
or constructive) obligation as a result of a past event, it is probable
the company will be required to settle the obligation, and a reliable
estimate can be made of the amount of the obligation. The amount
recognised as a provision is the best estimate of the consideration
required to settle the present obligation at the reporting date, taking
into account the risks and uncertainties surrounding the obligation.
If the time value of money is material, provisions are discounted using a
current pre-tax rate specific to the liability. The increase in the provision
resulting from the passage of time is recognised as a finance cost.
Employee benefits
Short-term employee benefits
Liabilities for wages and salaries, including non-monetary benefits,
annual leave and long service leave expected to be settled wholly
within 12 months of the reporting date are measured at the amounts
expected to be paid when the liabilities are settled.
Fair value measurement
When an asset or liability, financial or non-financial, is measured
at fair value for recognition or disclosure purposes, the fair value
is based on the price that would be received to sell an asset or
paid to transfer a liability in an orderly transaction between
market participants at the measurement date; and assumes that the
transaction will take place either: in the principal market; or in the
absence of a principal market, in the most advantageous market.
Fair value is measured using the assumptions that market participants
would use when pricing the asset or liability, assuming they act in
their economic best interests. For non- financial assets, the fair value
measurement is based on its highest and best use. Valuation techniques
that are appropriate in the circumstances and for which sufficient data are
available to measure fair value, are used, maximising the use of relevant
observable inputs and minimising the use of unobservable inputs.
Assets and liabilities measured at fair value are classified into three
levels, using a fair value hierarchy that reflects the significance of the
inputs used in making the measurements. Classifications are reviewed
at each reporting date and transfers between levels are determined
based on a reassessment of the lowest level of input that is significant
to the fair value measurement.
For recurring and non-recurring fair value measurements, external
valuers may be used when internal expertise is either not available or
when the valuation is deemed to be significant.
External valuers are selected based on market knowledge and
reputation. Where there is a significant change in fair value of an asset
or liability from one period to another, an analysis is undertaken, which
includes a verification of the major inputs applied in the latest valuation
and a comparison, where applicable, with external sources of data.
Issued capital
Ordinary shares are classified as equity.
Incremental costs directly attributable to the issue of new shares
or options are shown in equity as a deduction, net of tax, from the
proceeds.
New Accounting Standards and Interpretations not
yet mandatory or early adopted
Accounting Standards that have recently been issued or amended but
are not yet mandatory, have not been early adopted by the company
for the annual reporting period ended 31 December 2021. The
company has not yet assessed the impact of these new or amended
Accounting Standards and Interpretations.
2. Critical accounting judgements, estimates and
assumptions
The preparation of the financial statements requires management to
make judgements, estimates and assumptions that affect the reported
amounts in the financial statements.
Management continually evaluates its judgements and estimates in
relation to assets, liabilities, contingent liabilities, revenue and expenses.
Management bases its judgements, estimates and assumptions on
historical experience and on other various factors, including expectations
of future events, management believes to be reasonable under the
circumstances. The resulting accounting judgements and estimates will
seldom equal the related actual results. The judgements, estimates and
assumptions that have a significant risk of causing a material adjustment
to the carrying amounts of assets and liabilities (refer to the respective
notes) within the next financial year are discussed below.
43
Notes to the Financial Statements CONTINUED
AT 31 DECEMBER 2021
Capitalisation of internally generated R&D:
There is a degree of estimation and judgement on the capitalisation of payroll costs relating to the creation of a new asset which will generate additional
revenues. It is based on the amount of time spent on this on-going improvement and direct related materials and overheads, and makes assumptions
regarding the functionality of competitor products and accurate logging of time for development costs. There work is research or maintenance in nature,
this is expensed.
Allowance for expected credit losses
The allowance for expected credit losses assessment requires a degree of estimation and judgement. It is based on the lifetime expected credit
loss, grouped based on days overdue, and makes assumptions to allocate an overall expected credit loss rate for each group. These assumptions
include recent sales experience and historical collection rates.
Estimation of useful lives of assets
The company determines the estimated useful lives and related depreciation and amortisation charges for its property, plant and equipment and finite life
intangible assets. The useful lives could change significantly as a result of technical innovations or some other event. The depreciation and amortisation
charge will increase where the useful lives are less than previously estimated lives, or technically obsolete or non-strategic assets that have been
abandoned or sold will be written off or written down.
Impairment of non-financial assets other than goodwill and other indefinite life intangible assets
The company assesses impairment of non-financial assets other than goodwill and other indefinite life intangible assets at each reporting date by
evaluating conditions specific to the company and to the particular asset that may lead to impairment. If an impairment trigger exists, the recoverable
amount of the asset is determined. This involves fair value less costs of disposal or value-in-use calculations, which incorporate a number of key
estimates and assumptions.
Recovery of deferred tax assets
Deferred tax assets are recognised for deductible temporary differences only if the company considers it is probable that future taxable amounts
will be available to utilise those temporary differences and losses.
3. Revenue
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:
Revenue by business activity
Mobility solutions and related development services
Software development & support
Revenue can be further analysed by geographic region as follows:
2021
£000
3,766
348
4,114
Geographical regions
UK
Ireland
Turnover
Operating profit
Non-current assets
2021
£000
3,735
379
4,114
2020
£000
3,267
275
3,542
2021
£000
(698)
84
(614)
2020
£000
670
64
734
2021
£000
3,485
-
3,485
2020
£000
3,212
330
3,542
2020
£000
3,157
-
3,157
2021 ANNUAL REPORT & ACCOUNTS | FINANCIAL STATEMENTS 44
Notes to the Financial Statements CONTINUED
AT 31 DECEMBER 2021
4. Expenses
Profit before income tax includes the following specific expenses:
Depreciation
Plant and equipment
Buildings right-of-use assets
Total depreciation
Amortisation
Development software
Total depreciation and amortisation
Finance costs
Interest and finance charges paid/payable on lease liabilities
Finance costs expensed
Auditors remuneration for:
Audit services
Auditing of accounts of associates of the Company
Other services supplied pursuant to such legislation
5. Employees
Staff costs (including executive directors) were as follows:
Wages and salaries
Non-executive directors’ fees
Compulsory social security contributions
Pension costs
Directors emoluments included in the above:
Wages and salaries
Non-executive directors’ fees
Compulsory social security contributions
Pension costs
Key management personnel are considered to be the same as the Board of Directors.
A detailed breakdown of the remuneration of the Directors is shown on page 44.
Average monthly staff numbers in the period were as follows:
Sales and marketing
Technical and operations
Management, finance, and administration
2021
£000
135
56
191
388
579
10
10
12
29
6
2021
£000
2,056
65
253
104
2,478
2021
£000
521
65
83
65
734
2021
No.
8
23
7
38
2020
£000
111
57
168
216
384
29
4
11
14
6
2020
£000
1,475
40
184
111
1,810
2020
£000
475
24
78
84
661
2020
No.
4
22
7
33
Notes to the Financial Statements CONTINUED
45
AT 31 DECEMBER 2021
6. Income tax expense
Numerical reconciliation of income tax expense and tax at the statutory rate
(Loss)/Profit before income tax expense
Tax at the statutory tax rate of 19%
Effects of:
Expenses not deductible for taxation purposes
Utilisation of tax losses brought forward
Release of deferred tax asset
R&D tax claim
Income tax expense
2021
£000
(582)
(111)
-
111
(32)
-
(32)
2020
£000
532
101
-
(101)
-
202
202
The Group has an unrecognised deferred tax asset relating to carried forward taxable losses of approximately £150,000 (2020: £199,000).
7. (Loss)/Earnings per share
The calculation of basic (loss)/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 (loss)/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 (loss)/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
2021
£
(614)
(0.10)
(0.10)
2021
No.
457,486,234
138,630,137
596,116,371
-
596,116,371
2020
£
734
0.16
0.16
2020
No.
457,486,234
-
457,486,234
2,938,478
460,424,712
At 31 December 2021 there were 16,700,000 share options outstanding. These share options were not included in the calculation of diluted
earnings per share because they are antidilutive in terms of IAS 33.
2021 ANNUAL REPORT & ACCOUNTS | FINANCIAL STATEMENTS 46
Notes to the Financial Statements CONTINUED
AT 31 DECEMBER 2021
8. Intangible assets
Group
Cost
At 1 January 2021
Additions
At 31 December 2021
Amortisation and Impairment
At 1 January 2021
Charge for year
Impairment loss
At 31 December 2021
Enterprise
Development
Expenditure
£000
Consumer
Focused
Development
Expenditure
£000
Website
Development
Costs
£000
Incremental
Contract Costs
£000
Restated
Goodwill
£000
2,452
485
2,937
(810)
(197)
(190)
(1,197)
-
479
479
-
-
-
-
-
-
18
18
-
-
-
-
-
670
72
742
(313)
(183)
-
(496)
357
246
799
-
799
-
-
-
-
799
799
Total
£000
3,921
1,054
4,975
(1,123)
(380)
(190)
(1,693)
2,798
3,282
Carrying amount at 31 December 2020
1,642
Carrying amount at 31 December 2021
1,740
479
18
Goodwill can further be 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
400
-
400
280
-
280
Callog Ltd
(Telecoms)
£000
308
(189)
119
Total
£000
988
(189)
799
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 at 8% p.a.
Notes to the Financial Statements CONTINUED
AT 31 DECEMBER 2021
9. Property, plant, and equipment
Group Fixed Assets
Cost
At 1 January 2020
Additions
At 31 December 2020
Depreciation
At 1 January 2020
Depreciation charge
At 31 December 2020
Carrying amount at 31 December 2020
Cost
At 1 January 2021
Additions
Disposals/Scrapped
At 31 December 2021
Depreciation
At 1 January 2021
Depreciation charge
Elimination on disposal
At 31 December 2021
Carrying amount at 31 December 2021
Office and computer
equipment
£000
PDA and smartphone
equipment
£000
Fixtures
and fittings
£000
153
18
171
(108)
(25)
(133)
38
171
56
(49)
178
(133)
(19)
49
(103)
75
1,203
-
1,203
(946)
(76)
(1,022)
181
1,203
-
(593)
610
(1,022)
(96)
593
(525)
85
61
2
63
(38)
(9)
(47)
16
63
5
-
68
(47)
(14)
-
(61)
7
47
Total
£000
1,417
20
1,437
(1,092)
(110)
(1,202)
235
1,437
61
(642)
856
(1,202)
(129)
642
(689)
167
Included within the net book value of £167,000 is £66,175 (2020: £151,427) 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 £85,252 (2020: £ 60,572). There is no material difference between the value of the minimum lease payments and their net
present value.
10. Right-of-use assets
Group
Land and buildings - right-of-use
Less: Accumulated depreciation
2021
£000
207
(171)
36
2020
£000
207
(115)
92
The company leases land and buildings for its offices under agreement for up to five years. On renewal, the terms of the leases are renegotiated.
11. Deferred tax
Group
Movements:
Opening balance
Credited to profit or loss
Closing balance
2021
£000
32
(32)
-
2020
£000
32
-
32
2021 ANNUAL REPORT & ACCOUNTS | FINANCIAL STATEMENTS 48
Notes to the Financial Statements CONTINUED
AT 31 DECEMBER 2021
12. Trade and other receivables
Group
Trade receivables
Other receivables
Prepayments and accrued income
2021
£000
888
-
191
1,079
2020
£000
576
1
287
864
The average credit period to customers is typically 30 days. No interest is charged on outstanding trade receivables. The company does not
hold any collateral. The carrying amount of trade and other receivables approximates the fair value.
As there is no significant increase in credit losses in the year, the loss allowance is remeasured to the 12 month expected credit loss as at the year
end date.
As at 31 December 2021, trade receivables of £81,203 (2020: £81,458) were impaired and fully provided for. The ageing of trade receivables not
impaired are as follows:
Age analysis of trade receivables
Age from invoice date
< 30 days
30 – 60 days
60 – 90 days
> 90 days
Movement of the Group provision for impairment of trade receivables are as follows:
Opening balance
Receivables collected in year previously provided for
Receivables written off during the year as uncollectable
Provision for receivables impairment for the year
Company
Amounts recoverable from Group undertakings
Other receivables
Prepayments and accrued income
2021
£000
555
180
121
32
888
2021
£000
81
12
-
(12)
81
2021
£000
1,800
4
1
1,805
2020
£000
454
49
30
43
576
2020
£000
104
-
-
(23)
81
2020
£000
1,331
41
47
1,419
13. Cash and cash equivalents
Cash and cash equivalents comprise cash at bank and short-term deposits held by Group companies. The carrying amount of these assets
approximate their fair value.
Notes to the Financial Statements CONTINUED
AT 31 DECEMBER 2021
14. Trade and other payables
Group
Trade payables
PAYE and social security
VAT
Accruals and deferred income
Company
Trade payables
Amounts owed to Group undertakings
Accruals
15. Borrowings
Group
Secured bank loans – current
Secured bank loans – non-current
Secured bank loans
16. Lease liabilities
Group
Maturity analysis:
Year 1
Years 2 – 5
After five years
Lease liability
17. Share capital
Authorised
Ordinary shares of 0.1p each
Issued, called up
Ordinary shares - fully paid
2021
Shares
711,950,842
2021
Shares
657,486,234
2020
Shares
711,950,842
2020
Shares
457,486,234
2021
£000
428
83
39
610
1,160
2021
£000
5
-
36
41
2021
£000
5
-
5
2021
£000
98
-
-
98
2021
£’000
712
2021
£’000
657
49
2020
£000
83
128
359
337
907
2020
£000
29
423
23
475
2020
£000
8
5
13
2020
£000
181
94
-
275
2020
£’000
712
2020
£’000
457
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). The share options may not be exercised for three years from date of issue and thereafter, only if the target share price is
achieved.
2021 ANNUAL REPORT & ACCOUNTS | FINANCIAL STATEMENTS 50
Notes to the Financial Statements CONTINUED
AT 31 DECEMBER 2021
At 31 December 2021 the following options were outstanding in respect of ordinary shares.
Date of grant
Issued under EMI scheme
22 December 2020*
Expiry
date
Number
issued
Expired/
cancelled
Exercised
in 2020
Outstanding at
31 December
2021
22 December 2030
16,700,000
-
-
16,700,000
Expense charged to the income statement
The total expense recognised for the year arising from equity compensation plans was as follows:
Equity-settled expense
2021
£
11,133
2020
£
-
Fair value of options and awards granted
The weighted average fair values of options granted, estimated by using the Black Scholes Option pricing model, were £0.007 (2020: £0.007).
Share options
The fair value of the options was estimated on the date of grant, based on the following weighted average assumptions:
Weighted average assumption
Share price
Exercise price
Expected volatility
Expected life
Risk-free interest rate
2021
£0.034
£0.0335
30%
3 years
0.296%
2020
£0.034
£0.0335
30%
3 years
0.296%
The expected volatility used was based on the historical volatility of the share price over a period equivalent to the expected life of the option
prior to its date of grant. The risk-free interest rate was based on the yields available on UK government bonds as at the date of grant. The bonds
chosen were those with a similar remaining term to the expected life of the options.
18. Reserves
Balance as at 1 January 2020
Retained profit for the year
Translation movement
Balance as at 31 December 2020
Loss after income tax expense for the year
Issue of shares
Translation movement
Balance as at 31 December 2021
Balance as at 1 January 2020
Loss after income tax expense for the year
Balance as at 31 December 2020
Loss after income tax expense for the year
Share option expense
Issue of shares
Balance as at 31 December 2021
Share premium
£000
Other reserves
£000
Reverse acquisition
reserve
£000
Retained earnings
£000
148
148
5,442
5,590
475
4
479
2
481
(5,244)
(5,244)
7,433
734
8,167
(614)
(5,244)
7,553
Share premium
£000
Other reserves
£000
Retained earnings
£000
148
148
5,442
5,590
337
337
11
348
3,582
(198)
3,384
(214)
3,170
51
Notes to the Financial Statements CONTINUED
AT 31 DECEMBER 2021
19. Investments
The Company is the holding company of the Group. The following table shows details of the Company’s subsidiary undertakings at
31 December 2021. 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
Owned by Crimson Tide (IE) Limited
mpro5 Inc (13 May 2021)
Owned by Crimson Tide mpro Limited
Moneymotive Limited (100%)
Owned by Moneymotive Limited
Callog Limited (100%)
Company
Shares in subsidiary undertakings - at cost
Less: Impairment
Activity
Mobile data solutions
Mobile data solutions
Non-trading
Country of incorporation or
registration and operations
England and Wales
England and Wales
England and Wales
Mobile data solutions
Ireland
Mobile data solutions
Delaware, USA
Non-trading
England and Wales
Telecoms Software
England and Wales
2021
£000
5,297
(1,929)
3,368
2020
£000
5,297
(1,929)
3,368
20. Financial instruments
Financial risk management objectives
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
Secured loans
Finance leases
2021
£000
5,736
5
98
2020
£000
1,175
9
189
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.
Foreign currency risk
The company undertakes certain transactions denominated in foreign currency and is exposed to foreign currency risk through foreign exchange
rate fluctuations.
Foreign exchange risk arises from future commercial transactions and recognised financial assets and financial liabilities denominated in a
currency that is not the entity’s functional currency. The risk is measured using sensitivity analysis and cash flow forecasting.
2021 ANNUAL REPORT & ACCOUNTS | FINANCIAL STATEMENTS 52
Notes to the Financial Statements CONTINUED
AT 31 DECEMBER 2021
Credit risk
Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the company. The company
has a strict code of credit, including obtaining agency credit information, confirming references and setting appropriate credit limits. The
company obtains guarantees where appropriate to mitigate credit risk. The maximum exposure to credit risk at the reporting date to recognised
financial assets is the carrying amount, net of any provisions for impairment of those assets, as disclosed in the statement of financial position and
notes to the financial statements. The company does not hold any collateral.
Generally, trade receivables are written off when there is no reasonable expectation of recovery. Indicators of this include the failure of a debtor to
engage in a repayment plan, no active enforcement activity and a failure to make contractual payments for a period greater than 1 year.
Liquidity risk
Vigilant liquidity risk management requires the company to maintain sufficient liquid assets (mainly cash and cash equivalents) and available
borrowing facilities to be able to pay debts as and when they become due and payable.
The company manages liquidity risk by maintaining adequate cash reserves and available borrowing facilities by continuously monitoring actual
and forecast cash flows and matching the maturity profiles of financial assets and liabilities.
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.
Fair value risk factors
The net fair value of intangible assets approximate to their carrying value as disclosed in Note 8 is 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 the 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.
21. Related party transactions
The interests of the Directors in share options are shown on page 24.
Other than the above, no transactions with related parties were undertaken such as are required to be disclosed under International Accounting
Standard 24.
22. Prior period restatement
During the year, it was identified that under IFRS 15, costs that are incremental to obtaining a contract should be capitalised. There was therefore
a reclassification applied from prepayments to intangible assets of £246,218 (2020: £357,138). The impact of this has £nil impact on reserves and
£nil impact on total assets.
Company Statement of Financial Position
AT 31 DECEMBER 2021
Assets
Non-current assets
Investments
Total non-current assets
Current assets
Trade and other receivables
Cash and cash equivalents
Total current assets
Total assets
Liabilities
Current liabilities
Trade and other payables
Total current liabilities
Total liabilities
Net assets
Equity
Issued capital
Share premium
Other reserves
Retained profits
Total equity
Note
19
12
13
14
17
18
18
18
2021
£000
3,368
3,368
1,805
4,633
6,438
9,806
41
41
41
9,765
657
5,590
348
3,170
9,765
53
2020
£000
3,368
3,368
1,419
14
1,433
4,801
475
475
475
4,326
457
148
337
3,384
4,326
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 £214,259 (2020 loss: £198,076).
The financial statements were approved by the board of directors on 15 June 2022 and signed on its behalf by:
BRJ Whipp
Director
LA Jeffrey
Director
Company Registration Number 00113845
2021 ANNUAL REPORT & ACCOUNTS | FINANCIAL STATEMENTS
54
Company Statement of Changes in Equity
AT 31 DECEMBER 2021
Issued
capital
£000
Share
premium
£000
Reserves
£000
Retained
earnings
£000
Company
Balance at 1 January 2020
Loss after income tax expense for the year
Balance at 31 December 2020
Shares issued
Share option expense
Loss after income tax expense for the year
457
-
457
200
-
-
148
-
148
5,442
-
-
Balance at 31 December 2021
657
5,590
337
-
337
-
11
-
348
3,582
(198)
3,384
-
-
(214)
3,170 9,765
Total
equity
£000
4,524
(198)
4,326
5,642
11
(214)
Company Statement of Cash Flows
AT 31 DECEMBER 2021
Note
Loss before taxation
Adjustments for:
Share option expense
(Increase)/decrease in trade and other receivables
(Decrease)/increase in trade and other payables
Net cash from operating activities
Cash flows from financing activities
Net proceeds from share issues
Net cash used in financing activities
Net increase/(decrease) in cash and cash equivalents
Cash and cash equivalents at the beginning of the financial year
Cash and cash equivalents at the end of the financial year
13
2021
£000
(214)
11
(386)
(434)
(1,023)
5,642
-
4,619
14
4,633
55
2020
£000
(198)
-
18
160
(20)
-
-
(20)
34
14
2021 ANNUAL REPORT & ACCOUNTS | FINANCIAL STATEMENTS 56
Officers and Professional Advisors
Board of Directors
Secretary
Registered office
BRJ Whipp (Chairman)
SK Goodwin
TJT Hawkins
LA Jeffrey
PM Hurter
JK Daniell
PM Hurter
Brockbourne House
77 Mount Ephraim
Tunbridge Wells
Kent TN4 8BS
Registered number
00113845
Bankers
Auditors
Nominated Adviser and Broker
Solicitors
NatWest Bank
19 Mount Ephraim
Tunbridge Wells
Kent TN1 1EN
Shipleys LLP
10 Orange Street
Haymarket
London
WC2H 7DQ
finnCap
60 New Broad Street
London
EC2M 1JJ
DMH Stallard LLP
135 High Street
Crawley
RH10 1DQ
Website
www.crimsontide.co.uk
www.crimsontide.co.uk