AUDIOVISUAL INTERACTION
MADE EASY
Products
Industry
Clients
PB / Our product s
2017ANNUAL REPORTAND ACCOUNTS OUR YEAR
Executive Management
About Mirada
Our Products
Investor Insights
2
3
4
8
REVIEW OF THE YEAR
Highlights of the Year
11
CEO Statement
14
Strategic Report
18
CORPORATE GOVERNANCE
Directors´� Report 20
Directors�´ Remuneration Report 22
FINANCIAL STATEMENTS
Statement of Directors´� Responsibilities 23
Independent Auditors´� Report 24
Consolidated Statement of Comprehensive Income 26
Consolidated Statement of Financial Position 27
Company Statement of Financial Position 28
Consolidated Statement of Changes in Equity 29
Company Statement of Changes in Equity 30
Consolidated Statement of Cash Flows 31
Company Statement of Cash Flows 32
Notes to the Consolidated Financial Statements 33
Officers and Professional Advisers 60
1
EXECUTIVE MANAGEMENT
JOSÉ LUIS VÁZQUEZ
CEO
Founder and CEO of Mirada PLC
and the Chairman of Spanish
Association of Interactive
Technology Companies (AEDETI).
He holds a degree in Advanced
Telecommunications
Engineering and an MBA from
IESE Business School.
GONZALO BABÍO
CFO
Prior to joining Mirada in 2015
as the CFO, he worked as
Finance Director for both The
Walt Disney Company (10
years) and Electronic Arts (10
years). He holds an EMBA from
IESE Business School, among
other titles.
NURIA LAHUERTA
HEAD OF HUMAN RESOURCES
In Mirada since 2011, Nuria has
been recently appointed Head
of Human Resources. She is a
double graduate in Human
Resources Management and
History of Art and a skilled
professional.
ANTONIO RODRÍGUEZ
VP BUSINESS DEVELOPMENT
He joined Mirada from Jazztel
PLC, where he held the roles of
Network Engineering Manager
and Telco Platforms and OSS
Manager. He holds a BSc in
Telecommunications
Engineering and an MBA from
IE Business School.
1
2 / Executive Ma nageme nt
JOSÉ GOZALBO
CTO
José has been CTO of Mirada
since its creation. He holds a
degree in Computer Science
and he has in depth
experience in Software
Development and Digital TV
markets.
JAVIER PEÑIN
VP SALES
His previous experience
includes working at AUNA
during the launch of Spain’s first
digital cable TV platform. He
also worked as Senior Sales
Manager in Telefonica and as
Global Sales Manager at ADB.
BSc in Telecoms Engineering
and BMD from IESE.
ROSZANA DALATI
HEAD OF MARKETING
Roszana joined Mirada as
Marketing Manager before
forming part of Executive
Management in 2017. She holds
a degree in International
Relations and a Masters in
Strategic Management of Sales
& Marketing from IE Business
School.
ABOUT MIRADA
Mirada PLC is an AIM-quoted leading provider of products and services for global
Digital TV operators and broadcasters. Founded in 2000 and led by Non-Executive
Chairman Javier Casanueva and Group CEO José Luis Vázquez, Mirada's core focus
is on the ever-growing demand for ”TV Everywhere” for which it offers a range of
software products, notably the Iris multiscreen platform, acclaimed by clients for its
incomparable flexibility and optimal time to market.
Mirada prides itself on being a
global pioneer in Digital TV technology
Since its establishment seventeen years ago, Mirada's
The Company prides itself on being a pioneer in Digital TV
products and solutions have been deployed by some of
technology, and following the success of izzi's platform
the biggest names in broadcasting including Telefonica,
powered by Iris which is currently considered to be the
Sky, Virgin Media, BBC, ITV and Televisa, the largest media
most advanced in the entire region, Mirada's growing
company in the Spanish-speaking world. Mirada has also
pipeline of opportunities is currently the greatest the
established partnerships with key players in the Digital TV
company has ever seen.
world such as Conax and Ericsson.
PRESENCE AROUND THE WORLD
2 / Executive Management
Ab out Mirada / 3
OFFICES
UK
SPAI N
MEX ICO
REP RESENTATIVES
IN DIA
SINGAPORE
SLOVENIA URUGUAY
OUR PRODUCTS
IRIS END-TO-END SOLUTION
Mirada's seamless multiscreen solution for content consumption
Mirada's Iris software solution provides clients' subscribers with a seamless and easy-to-use platform to discover and
consume both traditional broadcast and internet-based content anytime, anywhere. The multiscreen software suite
enables content consumption across TVs, tablets, smartphones and laptops, in addition to the provision of essential tools
for clients such as audience measurement and content management.
Incomparable flexibility
of product and optimal
time to market.
IRIS SERVICE DELIVERY PLATFORM (SDP)
Powerful tool for both TV operators and subscribers
This extensive back-end product - the brain of our Iris ecosystem - is an accessible platform providing operators with advanced
tools to access configuration settings, statistics, content management and many other essential features to suit their specific
marketing needs. Our SDP also provides users with features such as content suggestions and smart search throughout the
catalogue.
Providing clients with desirable
software management tools to
suit their specific marketing needs.
4 / Our Products
DIRECTORS‘ REPORT
INSPIRE UI
Our state-of-the-art user experience
Inspire is Mirada's exclusive user interface which enables a seamless content consumption experience across all
platforms including smartphones, tablets and PCs. Developed with real-user live testing, our team of experts designed
our user-centric Inspire UI to be both rich in high-end features and extraordinarily intuitive.
Suitability and satisfaction even
with the most demanding users,
both on the level of usability and
visual attractiveness.
OVER-THE-TOP PLATFORM
Advanced platform to enjoy content anytime, anywhere
Over-the-top (OTT) refers to the ever-growing demand for content delivery on viewers' terms at the time, place and on the
device of their choice… and this product does exactly that! Mirada's OTT platform enables viewers to enjoy their favourite
content at any time on their preferred device (TVs, smartphones, tablets or laptops) and can work independently to the TV
o perator's cable/DTH/IPTV digital TV service.
Providing a future-proof
solution independent from
traditional broadcasting.
4 / Our Produ ct s
Ou r Products / 5
xPLAYER
Managing synchronised interactive content
One of Mirada's flagship products which manages red and green button interactivity on behalf of a channel. xPlayer allows
viewers to interact efficiently with on-screen content (red button) in addition to scheduling recordings or reminders (green
button).
Managing essential viewer
interactivity within multiple
TV devices.
LogIQ
Data intelligence platform
LogIQ is Mirada’s new data analytics platform which uses holistic data retrieved from clients’ operations to enable them to
make better, data-driven decisions. With LogIQ, operators are finally armed with valuable insights about their platform,
subscribers and consumption, empowering them to provide the most advanced and appealing offering in an increasingly
competitive industry.
Empowering operators to
make intelligent, data-driven
decisions.
6 / Our Products
6 / Our products
DIRECTORS‘ REPORT
+50 SATISFIED CLIENTS
The technology that powers izzi’s multiscreen
platform is the most advanced in the entire region.
Today, izzi tv is thriving at the forefront of the industry.
GUILLERMO SALCEDO
DIRECTOR OF MARKETING AT IZZI TELECOM, TELEVISA GROUP
Mirada’s client since 2014
6 / Our Produ ct s
6 / Our produ ct s
Ou r Products / 7
INVESTOR INSIGHTS
MIRADA IN THE MARKET
Pay TV Market Overview
The global pay TV market, one of the fastest growing industries in the world, is on track to reach $254.77bn by 2025 (Grand
View Research, 2017). However, the increasing popularity of alternative services and devices which allow viewers to access
their favourite content on their terms, it has become a priority for operators and broadcasters worldwide to reconsider their
business models in order to remain relevant in this rapidly evolving market. Telcos, for example, are expanding their vision
to over-the-top (OTT) services as an alternative or complement to their existing platform, providing an effective user
experience across devices to promote valuable content and engage viewers, and exclusive services to differentiate
themselves from other industry service providers. Mirada’s advanced Iris Ecosystem, composed of powerful front- and
back-end products, is perfectly poised to serve such needs on a global scale. Mirada focuses particularly on the
prosperous pay TV markets of the developing regions of Latin America, Eastern Europe and Asia Pacific.
LATIN AMERICA
Growth within Latin America’s pay TV market
remains strong with pay TV subscribers on track
to reach 88.7 million in 2022, up from 73.7 million
in 2017. However, with 78% of major pay TV
players
in Latin America now offering TV
Everywhere services (Nagra, 2017), operators are
having to look elsewhere to strengthen their
offering. Data
intelligence platforms have
become a major area of interest within the
industry, with analytics within global pay TV
services expected to grow by 105% over the next
five years (ABI Research, 2017). Mirada’s recently
launched data intelligence platform, LogIQ, is the
essential tool for operators and broadcasters in
the region in need of a wider vision to make
better data-driven decisions to remain on the
cutting-edge of an increasingly competitive and
innovative industry.
Growth of LATAM pay TV
subscribers
@D ataxi s, 2017.
+20%
73,7m
2017
88,7m
2022
8 / Our produ cts
8 / Investor Insights
The global pay TV market, one of the fastest growing
industries in the world, is on track to reach $254.77bn by 2025.
$454m
2015
$1,976m
2021
Growth of OTT revenues in Eastern Europe
@Digital T V Research, 2016.
EASTERN EUROPE
With the region’s pay TV penetration set to
reach 80% and the number of pay TV
subscribers expected to hit 82.8m by 2020
(IDC, 2017), Eastern Europe’s pay TV market
is advancing towards maturity. Multiscreen
viewing has become commonplace across
the region and service providers are now
turning to new business models to reinforce
their current offering. OTT viewing, for
example, which was once seen as a threat
by operators
in
the
region,
is now
considered a vital part of the content mix,
with OTT revenues in the region predicted
to reach $1,976 million by 2021, up from
$454 million in 2015. Mirada’s acclaimed
OTT platform is perfectly suited to serve all
types of operators who are looking to
future-proof their pay TV business thanks to
its seamless
integration with existing
DVB/IPTV solutions.
8 / Our products
Investor Insights / 9
2021
2016
$40bn
$32bn
Growth of pay TV
revenues in APAC
@IA BM M arke t In te ll ig enc e, 2 0 16 .
+25%
ASIA PACIFIC
Asia Pacific is the world’s largest pay TV subscriber region, contributing 60% to the global
total and with revenues expected to grow a further $8bn to reach $40bn by 2021. Despite
such promising growth expectations, certain factors within the region, such as the increasing
popularity of OTT services and demand for an improved user experience with personalised
content recommendations, means operators need to adapt their offering in order to survive
and thrive in the market. Mirada’s Iris Ecosystem empowers operators with a powerful and
future-proof platform that has the flexibility to continuously add new features and services,
with the goal to attract retain customers with the ultimate viewing experience.
MIRADA IN NUMBERS
Facts about our company:
ESTABLISHED
BUSINESS
UNRIVALLED
EXPERIENCE
EXCEPTIONAL
CLIENT LIST
EXTENSIVE PARTNER
NETWORK
Founded
17
years ago
+60
projects
developed
57
clients served
globally
29
trusted
partnerships
MARKET LEADING PRODUCT
GLOBAL REACH
Cutting edge
technology
70%
engineering
experts
Operating across
Asia, Europe and
the Americas
Over
10 000 000
people using our
technology
MIRADA’S STRATEGY
Our strategy focuses on four key areas:
Market Strategy
Product Strategy
Mirada has identified a number of target geographies
Our market
leading digital TV products have been
where it is fully focused on developing its presence. These
designed to future-proof the platforms of operators and
markets display promising characteristics such as high
broadcasters worldwide, while dramatically improving their
annual growth rates in pay TV consumption, growing pay
user experience with cutting-edge services at a
TV penetration and burgeoning middle classes providing
competitive time to market. This enables us to fully satisfy
rapid growth in consumer spending.
our clients’ needs for today, while also providing them with
a roadmap and vision for the future.
Sales Strategy
Business Model Strategy
We have recently boosted our sales and marketing
Our business model has been developed to meet our
resources to take full advantage of the augmented interest
clients’ future needs with a strong focus on flexibility. We
in our offerings following the successful high-profile
can provide both “Software as a Service” and hosted
deployment of our flagship product with Tier 1 operator izzi
services, enabling us to give our clients exactly what they
Telecom. We offer our products worldwide and we benefit
want. We grow as they grow, reinforcing long term bonds,
from an increased pipeline of opportunities through a
while securing long-term recurring revenue streams.
direct relationship with customers, for whom we are a
partner for growth.
10 / Investor Insights
Review of the Year
Corporate Governance
Financial Statements
DIRECTORS‘ REPORT
HIGHLIGHTS OF THE YEAR
Success with izzi
Revenues from new subscriber-based license fees were
adversely affected by the slowdown in the Mexican
economy due to the uncertainties following the 2016 US
elections. However, along with the return of economic
confidence to the Mexican market came a notable increase
in license volumes from Televisa, with the number of
set-top boxes powered by Mirada’s technology in excess
of 750,000 across Televisa networks as of June 2017.
Approximately a quarter of these new households have
also installed Mirada’s OTT platform.
Promising pipeline
An increased investment in sales and marketing activities paired with Mirada’s exceptional Tier 1 reference in Mexico with izzi
has resulted in the largest pipeline of opportunities in the Company’s history. Since 2016, Mirada has received 17 invitations
to bid in upcoming projects, in comparison to 3 back in 2015. Furthermore, this year Mirada has also seen the addition of ALi,
a leading innovator and developer of set-top box chipsets, Anevia, a leading OTT and IPTV software vendor, and others to its
extensive partner ecosystem. Not only do these new partnerships improve Mirada’s ability and flexibility to address clients
with different business models and needs, but partnerships also play a valuable part in opening up new opportunities.
10 / Investor I nsig hts
Hi ghlig hts of the Year / 11
DIRECTORS‘ REPORT
New recurring revenue streams
In the pursuit of converting such opportunities into further
contract wins, and following in-depth market research and
careful consideration of feedback from operators, the
Company has developed an additional service deployment
model. In addition to the existing CAPEX-based model, the
Company now offers an OPEX model with strong SaaS
(Software as a Service) elements, thus boosting the
potential to provide more diversified revenue streams, a
greater proportion of recurring monthly revenues and
increased competitiveness within the market. An example
of the application of this alternative model is Mirada’s
recently announced contract win with US-based ATNi.
Launch of analytics product
Mirada recently launched LogIQ, an advanced holistic analytics platform for empowering operators with the insights
necessary to make better, data-driven decisions regarding their offering. The platform retrieves and interprets Big Data from
a client’s platform and creates detailed and visual reports to enable clients to monitor and improve the performance of their
platform as well as using it for targeted advertising. With expectations of analytics within pay TV services to grow by 105% in
the next five years, Mirada is confident that the launch of the data intelligence platform will be of much interest to existing
clients and will also attract operators and broadcasters looking to strengthen their offering.
12 / Highlights of th e Ye ar
Review of the Year
Corporate Governance
Financial Statements
POST YEAR-END
ATNi Deal
Mirada recently celebrated a post year end contract win
with ATN International (ATNi), a NASDAQ-listed company
with operations in several US and Caribbean locations. The
Company will be replicating the success of the deployment
of its Iris multiscreen solution for izzi Telecom in Mexico for
four leading Caribbean operators owned by ATNi.
The most extensive
deployment of Iris since its
commercial launch across
the Mexican territory...
This will be the most extensive deployment of the Iris suite
of multiscreen products since its commercial launch across
the Mexican territory. Subscribers will be able to consume
This contract is therefore expected to greatly diversify
Mirada's revenue streams, leading to a higher proportion of
recurring revenues and improving the long term financial
live, catch-up and on-demand content across advanced
stability of the Company.
hybrid set-top boxes and on their favourite devices, while
enjoying many cutting-edge features powered by Mirada's
back-end platform, Iris SDP.
Mirada will also play the role of System Integrator to
manage the overall execution of the project, coordinating
all third parties. Following the deployment, which is
expected to be around the end of Mirada's financial year
2018, the Company will manage all operations, services and
support and maintenance across ATNi networks. The
contract also employs Mirada’s new OPEX model, including
providing subscriber-based licence fees through a "SaaS"
(Software as a Service) model, thereby giving the client
Mirada currently has an extensive and growing pipeline of
opportunities, of which this substantial contract win was a
part. This pipeline is the direct result of the first-class
reference provided by
izzi Telecom, combined with
increased investment in sales and marketing activities.
The Company is confident that this deal will create yet
another long-term partnership, with the likelihood that
ATNi will replicate the solution into other operations they
own now and in the future. The deal also provides another
strong reference helping to further grow the Company’s
strong pipeline of opportunities in both new and existing
greater flexibility in financing the project.
markets.
12 / Highlights of the Year
Post Year-End / 13
CEO STATEMENT
JOSÉ LUIS VÁZQUEZ
We are happy to say that
our Iris product has exceeded
our expectations in quality
and stability, and the market
reception has been very positive
Overview
I am pleased to present the Group’s audited financial
have only started scratching the surface of the potential
results for the year ended 31 March 2017. This was a year in
value for this contract.
which the Company focused on three areas: the successful
deployment and support for the commercial roll-out of our
Despite this, the deployment was not exempt from issues,
largest customer, izzi Telecom (part of Televisa Group) in
which were principally due to the need to ensure the
Mexico; the reinforcement of our Sales and Marketing
proper stability of the global solution which involved many
activities to harvest opportunities from the key reference
parties, and the negative effects of the US elections on the
that this customer provides Mirada; and the scaling and
Mexican market at the end of 2016. However, the market is
training of our technical team in anticipation of new
now recovering, with a stronger currency and a reinforced
contract wins that we foresee from the significant
appetite for investment.
improvement to our pipeline.
Trading review
We are happy to say that our Iris product has exceeded our
expectations in quality and stability, and the market
reception has been very positive. We have a powerful and
Our solution is being successfully rolled-out across five izzi
reliable multiscreen solution, which has proven to be
Telecom networks in Mexico and, according to their
impressively scalable over a short period of time, with
customers’ feedback, is the best TV proposition in the
consumers seamlessly purchasing and enjoying video
region in terms of content and product features. The
across a plethora of different screens. In spite of being a
strength of our solution, combined with a large marketing
small company, we have been able to beat much larger
investment from the Televisa Group, resulted in the
competitors and succeed in the delivery of such a complex
solution being deployed across more than 670,000 set-top
solution
that now successfully serves hundreds of
boxes by the end of March 2017. With a customer base of
thousands of households and over a million devices in
over four million households in the cable market, and
Mexico alone.
several set-top boxes per subscriber, we believe that we
14 / CEO State ment
Last year we also reached agreements to improve our
sales presence in Eastern Europe, India and South-East
Asia, establishing local representatives in Slovenia, Delhi
and Singapore
to cover
these
regions. These
representatives have a success-fee component included
in their remuneration and we are currently witnessing the
positive results of their activities, with significant potential
deals in our pipeline in each of the three key regions
mentioned above. We are supporting our enhanced sales
force with improved marketing activities that highlight our
reference deployments and the key advantages of our
superior product. We are also a regular presence at
relevant trade shows around the globe, focussing mainly
on the NAB Show for the American region, the IBC for
Europe and Africa, and the Broadcast Asia Show for the
Middle East and Asia. These activities, alongside the
reference that izzi Telecom gives us, have substantially
improved our pipeline, some of which has now matured
into new contract wins, such as the recently announced
contract with ATNi for the Caribbean region.
We have a strong technical team who have once again
proved their quality and resilience. Furthermore, we have
been able to deploy a world-class multiscreen TV product
that compares well with our largest competitors in the
market, and has been able to sustain the required growth in
features and scalability. Our team is able to give continued
support
to
the deployment of multi-million sized
corporations, which rely on our capabilities and our future
corporate success. This needs to be sustained, whilst we
are also supporting our growing sales and pre-sales
activities, as we need to be ready to deploy to new
customers in an ever-changing world.
Review of the Year
Corporate Governance
Financial Statements
We have been able to deploy
a world-class multiscreen
TV product that compares
well with our largest
competitors in the market
Customers of different sizes are now relying more and
more on cloud-based services, and Mirada is working to be
able to cover their needs. They look for flexible business
models that align their growth and revenue flows with the
investments and operational costs of their relevant
suppliers. While this comes with the need to fund
deployments, the guaranteed recurrent revenues more
than justify us entering “Software as a Service” business
models such as the project announced post year-end with
ATNi. Set-up fees and other professional service related
fees will continue to be a part of these new deals, but the
most relevant change comes from sustained revenue
flows over several years. This will give greater visibility of
return on investment for new contracts of this kind.
We are also now able to provide more competitive global
solutions to cost-sensitive customers as the result of
agreements with key suppliers
in the market. The
integration of our solution with new chipset vendors such
as ALi Corporation makes it possible for set-top box
vendors to offer a very powerful solution with the benefits
of reduced investment needs. While our software remains
as powerful as ever, reducing the overall customer
premises’ investment requirement makes our solution
even more attractive to the end-user customer.
Our sales cycles tend to last from six to eighteen months,
from the start of negotiations to contract signature. Our
recent deal with ATNi was one of the faster ones, while
others in the pipeline are expected to take longer. Our
pipeline started to reflect the impact of the Televisa roll-out
at the end of calendar 2016, so we expect for some of the
earliest prospects to make their decisions during the
coming months.
Our mobile division, which is distinct from our Digital TV
division, provides technology solutions to cashless parking
providers and is organically growing its revenue at 5% per
annum and generating profits of £0.12m (2016: £0.13m). The
14 / CEO Statement
CEO Statement / 15
mobile division contributed 8% of total revenue in the
current year (2016: 10%).
This promising stage in the life of our Company, now based
on a solid base of products and customer references, can
only flourish with
the
joint empowerment of our
stakeholders: employees, customers, suppliers, partners
and investors. I would like to thank all of them again for their
continued efforts and support.
Financial overview
Revenue grew to £6.57 million (2016: £6.02 million), driven
During the financial year, Mirada experienced two major
primarily by the significant product integration for the
events which have led to the goodwill impairment of £3.0
Televisa Group. In our mobile division, revenues continued
million (2016: £0.0 million). First, on the back of the Mexican
to grow steadily to £0.56 million (2016: £0.54 million).
Peso devaluation, post US elections, our major customer
Although gross profit grew to £6.09 million (2016: £5.80
Televisa reduced their number of purchase orders in the
million), there was a noted decrease of 3.6% in gross margin
financial year. This resulted in lower licence revenues and
percentage, due to the additional costs associated with an
forecast cash inflows.
increased number of sales representatives. Adjusted
EBITDA for the year decreased to £0.04 million (2016: £1.50
Second, although the ATNi project should result in material
million) resulting from the different revenue mix and
monthly ongoing revenues, the lower upfront receipts
investment
in our digital TV and broadcast division.
associated with the OPEX model (meaning lower set-up
Amortisation charges increased to £2.09 million from £1.63
fees and subscriber-based licenses provided on a 'SaaS' -
million, due to increased product investment.
software as a service model) has led the Board to seek
financing facilities to provide working capital for the
The Group posted a net loss for the year of £5.51 million
Company's various projects over
the medium-term,
compared to a loss of £0.40 million in the prior year. One of
including ATNi and other prospective projects. Discussions
the main reasons for this was a £2.0 million increase in
regarding additional financing facilities are advanced and
amortisation and increased spending on sales, marketing
further announcements in this regard will be made in due
and operational capabilities, which was required for the
course. Both factors have led to the emphasis of matter
achievement and successful execution of new contract
related to going concern, as noted in Note 3.
wins.
Revenue 2017
6.57
(£m)
Furthermore, there has been a significant reduction in the
market capitalisation of the group, and consequently the
company has processed an impairment to its investment, in
its Company Balance sheet, which has no impact on the
consolidated results of the Group.
Net Debt rose to £4.21 million (2016: £3.48 million) as a result
of increased product investment and delays in the full
Televisa commercial roll-out. Long term interest-bearing
loans and borrowings increased by 30% to £2.30 million
(2016: £1.77 million) and short term borrowings decreased
to £2.13 million (2016: £2.42 million). Trade receivables
decreased from £1.44 million to £0.80 million as invoices
related to the Monterrey deployment, which were raised in
the 2016 financial year, were collected in the 2017 financial
year.
Revenue 2016
6.02
(£m)
16 / CEO Stateme nt
Review of the Year
Corporate Governance
Financial Statements
Other intangible assets have increased from £3.89m to
£4.75m, mainly due to the increased valuation of the Euro
against the Sterling.
The deferred income increase of £1.19m largely relates to
cash collections from Televisa received in the current
financial period for services to be delivered in fiscal year
2018, due to the negotiation of more favourable payment
terms.
Cash at bank decreased to £0.22 million from £0.71 million,
with additional invoice discounting facilities of £2.40 million
and unused short-term credit
lines of £0.77 million
available.
Current Trading and Outlook
Mirada participated in a number of projects during the year
and is seen as increasingly relevant within the market. As
such, we are being invited to bid on a greater proportion of
new contracts as they arise, and I am glad to say we
currently have our strongest pipeline ever in terms of the
number of opportunities that we are participating in. This
has resulted in the recently announced contract win with
ATNi, and our increasing number of successful reference
projects is helping us secure further opportunities. With this
extensive and maturing pipeline, we are confident of
announcing new relevant contract wins in the near future.
José Luis Vázquez
Chief Executive Officer
29 September 2017
16 / CEO Statement
CEO Statement / 17
STRATEGIC REPORT
Business model
services such as quality assurance on functionality add ons
to platforms are provided to customers.
The Company’s main activity is the provision of software for
the Digital TV market. Our major customers are Digital TV
platforms, mostly Pay TV service providers. We provide the
Strategy
technology needed to facilitate the final user’s interaction
The Group’s strategy is to extend its presence in the Digital
with the devices they provide, including digital TV decoders
TV markets, focusing on those markets with higher potential
(set-top boxes), tablets, smartphones and computers. Our
growth rates, for example the Latin American, Eastern
major products are our navigational software proposition,
Europe and South East Asia market. The aim is to increase
Iris, including our Inspire user interface, and xplayer, our
the number of customers being charged subscriber-based
broadcasting synchronisation technology.
licence fees, as these revenues command higher margins
and, as long as the customer’s subscriber base is growing,
Our customers need the services of a User Interface (“UI”)
Mirada will continue to earn licence fees even from projects
provider such as Mirada when creating a new Digital TV
which were completed several years previously.
service or replacing/upgrading an existing one. The UI
provider interacts with the device vendor (in the case of set-
Reference deployments (defined as key deployments
top boxes), the encryption technology vendor (Conditional
used as a reference to attract potential customers) are very
Access (“CA”) vendor) for the protection of content, and the
important in this market, and winning reference contracts
customer systems (billing and provisioning systems). For
has been, and remains an integral part of our strategy.
the larger customers, this is usually a capital expenditure
The Group will need to continue investing in research and
model per final subscriber or household, where the set-top
development in order to provide the required functionalities
box vendor represents the most significant investment, and
in our products to satisfy the cutting-edge demands from
licence fees are paid to the software providers for the use
our customers, while maintaining a fair balance between
of CA licences and UI licences.
potential growth and profitability. These include costs
incurred towards developing new functionality such as
The Group tends to interact with the customer in the early
inclusion of an analytics platform in the cloud, Netflix
stages of their decision-making process, and help in the
integration, new KAON Set Top Box integration, Conax
selection of the proper ecosystem. Our expertise is widely
Cnditional Access integration and others. Our continued
recognised in the industry, and we provide a value that goes
investment
in
Iris
is essential
in ensuring a proper
beyond our actual UI proposition. Revenue from licenses
implementation of this strategy.
are earned from two specific and separate streams. Our
business model is to charge a one-off device related license
The main key performance indicator (“KPI”) used by
fee to the Pay TV platform for any new deployment of our
management in assessing the success of this strategy is
products. The second license fee, namely Mirada’s contract
the growth in Mirada’s licence revenues, which will be led
licence fees, increase as our customers’ subscribers
by the progress of our recent rollouts and any potential
increase. Additionally, the customer pays for the set-up
new licence-based contract wins. This license revenue has
fees (adaptation and integration of our technology) and for
decreased in the current year from £1.20m to £0.8m as a
any additional bespoke developments (on a professional
result of the reduced purchase orders received from major
services basis) or product enhancements (on a subscriber or
customer Televisa as noted in the CEO report.
device basis). For small customers, Mirada can also provide
a financed model with recurrent monthly subscriber-
based revenues in lieu of the device related license fee. A
customer using Mirada’s technology would also pay annual
support and maintenance fees. The Group also provides
cashless payment solutions to car park operators through
a revenue-share agreement. Revenue from this Mobile
segment is earned when services are provided. Managed
Development, performance and
position of business
Development, performance and position of business
have been discussed in the CEO report, with key items on
page 14.
18 / Strategic Report
Review of the Year
Corporate Governance
Financial Statements
Principal risks and uncertainties
Liquidity Risk
The key business risks affecting the Group are set out
medium and long term cashflow forecasts to ensure the
Liquidity risk is managed through the assessment of short,
adequacy of funding in order to meet the Group’s working
capital requirements. Cash and cash flow forecasts are
regularly reviewed by the Executive Directors and the
Group constantly monitors these to ensure, among other
scenarios, that the Group meets its liabilities as they fall
due. Where a shortfall in funding is identified the Company
will look to meet this shortfall through a variety of funding
option including but not limited to the issuing of new equity.
This area is considered further in the report of the directors
and the accounting policies under ‘Going concern’.
Approval
This strategic report was approved in behalf of the Board
on 29 September 2017 and signed on its behalf.
José Luis Vázquez
Chief Executive Officer
29 September 2017
below.
Dependence on people
The Group recognises the value of the commitment of
its key management personnel and is conscious that it
must keep appropriate reward systems, both financial and
motivational, in place to minimise this area of risk. Our share
option scheme and investment in training are examples
of this. There have been no changes in the key executive
management team in the last five years, excepting the
Finance Director.
Digital TV and Broadcast markets
The sectors in which the Group operates may undergo
rapid and unexpected changes. It is possible, therefore, that
competitors will develop products that are similar to those
of the Group, or its technology may become obsolete or
less effective. The Group’s success depends upon its ability
to enhance its products and technologies and develop and
introduce new products and features that meet changing
customer requirements and incorporate technological
advances on a timely and cost effective basis. As a result,
the Group continues to invest significantly in research and
development.
Information technology
Data security and business continuity pose inherent risks for
the Group. The Group invests in, and keeps under review,
formal data security and business continuity policies.
Intellectual property
There are certain markets in which there are instances of
disputes regarding intellectual property involving technology
companies, including the Digital TV market. While the Group
internally generates its products and software and strongly
believes that it has not infringed any third party intellectual
property, management do recognise that due to the nature
of the technology market there will always be a risk of other
corporations potentially making claims regarding intellectual
property/patent infringements.
18 / Strategic R eport
St rateg ic Report / 19
DIRECTORS’ REPORT
Review of business and future developments
Directors’ and officers’ indemnity insurance
Reviews of the business, its results, future direction and key
The Group has taken out an insurance policy to indemnify
performance indicators are included in the Chief Executive
the directors and officers of the company and its subsidiaries
Officer’s Report and Strategic Report on pages 14 to 19.
in respect of certain liabilities which may attach to them in
Dividends
No dividend is declared in respect of the year (2016: £nil).
their capacity as directors or officers of the Group, so far as
permitted by law. This policy remained in force throughout
the year and remains in place at the date of this report.
Financial risk management objectives and policies
Directors
The Group’s activities expose it to a number of financial risks
including capital risk, credit risk, foreign currency exchange
risk, interest rate risk and liquidity risk. The management of
financial risk is governed by the Group’s policies approved
by the board of directors, which provide written principles
to manage these risks. See note 20 for further details on the
Group’s financial instruments.
The directors who held office during the year are given
below:
Executive directors
Mr José Luis Vázquez
Mr José Gozalbo
Mr Gonzalo Babío
Chief Executive Officer
Going concern
Non-executive directors
These financial statements have been prepared on the going
Mr Javier Casanueva
Non- Executive Chairman
concern basis. The Directors have reviewed the Company
and Group’s going concern position taking account of its
Mr Francis Coles
Mr Matthew Earl
current business activities, budgeted performance and
the factors likely to affect its future development, which
Significant shareholdings
are set out in the Annual report, and include the Group’s
objectives, policies and processes for managing its capital,
its financial risk management objectives and its exposure to
At 31 March 2017 the following shareholders held, directly
or indirectly, two per cent or more interests in the issued
share capital of the Company:
credit and liquidity risks..
Number of
ordinary
£1 shares
Percentage
of issued
ordinary
share
capital
22.14%
19.43%
7.65%
6.06%
5.08%
4.97%
4.31%
3.63%
3.56%
The directors have prepared cash flow forecasts covering a
period of at least 12 months from the date of approval of the
financial statements. If the forecast is achieved, the Group
will be able to operate within its existing facilities. However,
the time to close new customers and the value of each
nature are factors which constrain the ability to accurately
predict revenue performance. Furthermore, investment
in winning customers, via marketing expenditure, and
servicing and delivering to new customers remains an
customer, which are deemed high volume and low value in
Kaptungs Ltd
Chase Nominees Ltd
30,782,837
Hargreave Hale Nominees Ltd
27,024,159
Nomura Holdings PLC
Commerz Nominees Ltd
10,639,183
8,424,316
7,058,668
Barclayshare Nominees Ltd
6,904,440
important function of the forecasts too. As such, there is a
Danehill Corporate Ltd
6,000,000
risk that the group’s working capital may prove insufficient
Charles Stanley
to cover both operating activities and the repayment of its
debt facilities. In such circumstances, the group would be
Amati
5,041,280
4,955,681
obliged to seek additional funding though a placement of
shares or source other funding. The directors have had a
history of raising financing from similar transactions.
See note 2, to the financial statements, for further
information on going concern.
Events since the reporting date
On 29 August 2017 the Company announced a contract
win with ATN International, Inc. (“ATNi”), a NASDAQ-listed
company, which operates in several US and Caribbean
locations under various trade names. Under the contract,
Mirada will provide products and services to four different
20 / Dire ctors‹ Re port
Caribbean operators owned by ATNi located in the
U.S. Virgin Islands, Bermuda, the Cayman Islands and
French Guyana. Mirada will deploy its complete suite
of Iris multiscreen products, including its over-the-top
(“OTT”) solution and back-end platform, Iris SDP, across
these networks. The commercial launch and subsequent
commercial deployment is expected to occur towards the
end of Mirada’s current financial year.
Auditors
Each of the persons who are directors at the date of
approval of this report confirms that:
1. So far as the directors are aware, there is no relevant
audit information of which the auditors are unaware;
and
2. The directors have taken all the steps that they ought
to have taken as directors in order to make themselves
aware of any relevant audit information and to establish
that the auditors are aware of that information.
This confirmation is given and should be interpreted in
accordance with the provisions of s418 of the Companies
Act 2006.
BDO LLP have expressed their willingness to continue in
office as auditors and a resolution to reappoint them will
be proposed at the forthcoming Annual General Meeting.
Approved by the Board of Directors and signed on behalf
of the Board:
José Luis Vázquez
Chief Executive Officer
29 September 2017
Dir ectors‹ Report / 21
Review of the Year Corporate Governance Financial Statements DIRECTORS‘ REMUNERATION REPORT
The Remuneration Committee decides the remuneration policy that applies to executive directors and senior management.
The Remuneration Committee meets as necessary in order to consider and set the annual remuneration for executive
directors and senior managers, having regard to personal performance and industry remuneration rates. In determining that
policy, it considers a number of factors including:
•
the basic salaries and benefits available to executive directors and senior management of comparable companies;
•
the need to attract and retain directors and others of an appropriate calibre; and
•
the need to ensure all executives’ commitment to the success of the Group.
Non-executive directors are appointed on contracts with a three-month notice period and may be awarded fees as
determined by the Board.
Executive directors are appointed on contracts with a 12-month notice period.
Directors’ Remuneration
The following table summarises the remuneration receivable by the directors for the year ended 31 March 2017.
Salary &
fees
£’000
Benefits
£’000
Share-based
payment
£’000
228
162
126
—
30
30
30
605
2
8
6
—
—
—
—
16
8
12
—
—
3
—
2
25
2017
Total
£’000
238
182
132
—
33
30
32
2016
Total
£’000
219
146
86
18
33
30
32
646
564
Executive
José Luis Vázquez
Jose Gozalbo
Gonzalo Babío (i)
Non-executive
Rafael Martín Sanz (ii)
Javier Casanueva
Mathew Earl
Francis Coles
(i) appointed on 24 November 2015
(ii) resigned on 14 October 2015
The directors participation in the company’s share option plan is detailed in Note 23, page 57 and, as confirmed on Note 7,
page 43, there were no contributions paid into a pension scheme for any director.
22 / Directors‹ Remun erati on Re p or t
STATEMENT OF DIRECTORS‘ RESPONSIBILITIES
Directors’ responsibilities
The directors are responsible for preparing the annual
report and the financial statements in accordance with
applicable law and regulations.
Company law requires the directors to prepare financial
statements for each financial year. Under that law the
directors have elected to prepare the group and company
financial statements
in accordance with
International
Financial Reporting Standards (IFRSs) as adopted by the
European Union. Under company law the directors must
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 requirements of the Companies Act 2006.
They are also responsible for safeguarding the assets of
the company and hence for taking reasonable steps for the
prevention and detection of fraud and other irregularities.
Website publication
not approve the financial statements unless they are
The directors are responsible for ensuring the annual
satisfied that they give a true and fair view of the state of
report and the financial statements are made available
affairs of the group and company and of the profit or loss
on a website. Financial statements are published on
of the Group for that year. The directors are also required
the company’s website in accordance with legislation
to prepare financial statements in accordance with the
in the United Kingdom governing the preparation and
rules of the London Stock Exchange for companies trading
dissemination of financial statements, which may vary
securities on AIM.
from legislation in other jurisdictions. The maintenance and
integrity of the company’s website is the responsibility of
In preparing these financial statements, the directors are
the directors. The directors’ responsibility also extends to
required to:
the ongoing integrity of the financial statements contained
therein.
• select suitable accounting policies and then apply them
consistently;
• make judgements and accounting estimates that are
reasonable and prudent;
• state whether they have been prepared in accordance
with IFRSs as adopted by the European Union, subject
to any material departures disclosed and explained in
the financial statements;
• prepare the financial statements on the going concern
basis unless it is inappropriate to presume that the
company will continue in business.
St atement of Directors‘ Respo nsibilities / 23
Review of the Year Corporate Governance Financial Statements INDEPENDENT AUDITOR‘S REPORT TO THE MEMBERS OF MIRADA PLC
We have audited the financial statements of Mirada plc
•
the group financial statements have been properly
for the year ended 31 March 2017 which comprise the
prepared in accordance with IFRSs as adopted by the
consolidated statement of comprehensive income, the
European Union;
consolidated and company statement of financial position,
the consolidated and company statements of changes
•
the parent company’s financial statements have been
in equity, the consolidated and company statements of
properly prepared in accordance with IFRS as adopted
cash flows and the related notes. The financial reporting
by the European Union and as applied in accordance
framework that has been applied in their preparation
with the provisions of the Companies Act 2006; and
is applicable law and International Financial Reporting
Standards (IFRSs) as adopted by the European Union and,
•
the financial statements have been prepared
in
as regards the parent company financial statements, as
accordance with the requirements of the Companies
applied in accordance with the provisions of the Companies
Act 2006.
Act 2006.
This report is made solely to the company’s members,
as a body, in accordance with sections Chapter 3 of Part
16 of the Companies Act 2006. Our audit work has been
undertaken so that we might state to the company’s
members those matters we are required to state to them in
an auditor’s report and for no other purpose. To the fullest
extent permitted by law, we do not accept or assume
responsibility to anyone other than the company and the
company’s members as a body, for our audit work, for this
report, or for the opinions we have formed.
Respective responsibilities of directors and
auditors
Emphasis of matter – Going concern
In forming our opinion on the financial statements, which
is not modified, we have considered the adequacy of the
disclosures made in Note 2 to the financial statements
concerning the Company and Group’s ability to continue
as a going concern. As discussed in Note 2, the group’s
available working capital may prove insufficient to cover both
operating activities and the repayment of its debt facilities.
In such circumstances, the group would be obliged to seek
additional funding. Although they have been successful
in raising finance in the past, there is no certainty that
they will in the future. These disclosures identify certain
factors that indicate the existence of a material uncertainty
which may cast significant doubt about the Company and
As explained more fully in the statement of directors’
Group’s ability to continue as a going concern. The financial
responsibilities,
the directors are
responsible
for
statements do not include the adjustments that would
the preparation of the financial statements and for
result if the Company and Group were unable to continue
being satisfied that they give a true and fair view. Our
as a going concern.
responsibility is to audit and express an opinion on the
financial statements in accordance with applicable law and
Opinion on other matters prescribed by the
International Standards on Auditing (UK and Ireland). Those
standards require us to comply with the Financial Reporting
Council’s (FRC’s) Ethical Standards for Auditors.
Scope of the audit of the financial statements
Companies Act 2006
In our opinion, the part of the directors’ remuneration report
to be audited has been properly prepared in accordance
with the Companies Act 2006.
A description of the scope of an audit of financial
In our opinion, based on the work undertaken in the course
statements is provided on the FRC’s website at www.frc.
of the audit;
org.uk/auditscopeukprivate.
Opinion on financial statements
In our opinion:
•
the information given in the strategic report and
directors’ report for the financial year for which the
financial statements are prepared is consistent with the
financial statements; and
•
the financial statements give a true and fair view of the
state of the group’s and the parent company’s affairs
as at 31 March 2017 and of the group’s loss for the year
then ended;
•
the strategic
report and directors’
report have
been prepared in accordance with applicable legal
requirements.
24 / Indepe nde nt Audi to rs‘ Re p or t
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:
Under the Companies Act 2006 we are required 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 and the part of
the directors’ remuneration report to be audited 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.
Iain Henderson (senior statutory auditor)
For and on behalf of BDO LLP, statutory auditor
London
United Kingdom
29 September 2017
BDO LLP is a limited liability partnership registered in England
and Wales (with registered number OC305127).
Independent Au di tors‘ Report / 25
Review of the Year Corporate Governance Financial Statements CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
At 31 March 2017
Revenue
Cost of sales
Gross profit
Depreciation
Amortisation
Share-based payment charge
Staff costs
Goodwill impairment
Other administrative expenses
Total administrative expenses
Operating loss
Finance income
Finance expense
Loss before taxation
Taxation
Loss for period
Currency translation differences
Total comprehensive loss for the period
(Loss) per share
(Loss) per share for the year
– basic & diluted
The notes on pages 33 to 59 form part of these financial statements.
Notes
5
14
13
24
7
6
8
9
10
2017
£’000
6,571
(478)
6,093
(35)
(2,087)
(54)
(3,627)
(3,000)
(2,389)
(11,192)
(5,099)
3
(329)
(5,425)
(87)
(5,512)
191
(5,321)
2016
£’000
6,019
(221)
5,798
(19)
(1,635)
(54)
(2,646)
–
(1,803)
(6,157)
(359)
5
(475)
(829)
425
(404)
303
(101)
Notes
Year ended
31 March 2017
£’000
Year ended
31 March 2016
£’000
11
(0.040)
(0.003)
26 / Consolidated Statement of Co mpr eh en si v e I n co me
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
At 31 March 2017
Goodwill
Other Intangible assets
Property, plant and equipment
Deferred Tax Assets
Other Receivables
Non-current assets
Trade & other receivables
Cash and cash equivalents
Current assets
Total assets
Loans and borrowings
Trade and other payables
Deferred income
Current liabilities
Net current liabilities/assets
Total assets less current liabilities
Interest bearing loans and borrowings
Other non-current liabilities
Non-current liabilities
Total liabilities
Net assets
Issued share capital and reserves attributable to
equity holders of the company
Share capital
Share premium
Other reserves
Accumulated losses
Equity
Notes
12
12
13
10
15
15
25
17
16
16
18
18
21
2017
£’000
3,946
4,753
113
–
508
9,320
2,575
222
2,797
12,117
(2,127)
(1,113)
(1,476)
(4,716)
(1,919)
7,401
(2,302)
–
(2,302)
(7,018)
5,099
1,391
9,859
3,303
(9,454)
5,099
2016
£’000
6,946
3,890
94
395
191
11,516
3,839
714
4,553
16,069
(2,419)
(1,279)
(291)
(3,989)
564
12,080
(1,772)
(18)
(1,790)
(5,779)
10,290
1,391
9,859
3,033
(3,993)
10,290
These financial statements were approved and authorised for issue on 29 September 2017.
Signed on behalf of the Board of Directors
José Luis Vázquez
Chief Executive Officer
The notes on pages 33 to 59 form part of these financial statements.
Consolid ate d Statem ent of Fin anc ial Position / 27
Review of the Year Corporate Governance Financial Statements
COMPANY STATEMENT OF FINANCIAL POSITION
At 31 March 2017
Intangible assets
Investments
Non-current assets
Trade and other receivables
Cash and cash equivalents
Current assets
Total assets
Loans and borrowings
Trade and other payables
Current liabilities
Net current liabilities
Total assets less current liabilities
Net assets
Issued share capital and reserves attributable to
equity holders of the company
Share capital
Share premium
Accumulated losses
Equity
Notes
12
14
15
17
16
21
2017
£’000
–
4,010
4,010
167
7
174
4,184
(315)
(3,608)
(3,923)
(3,749)
261
261
1,391
9,859
(10,989)
261
2016
£’000
2
11,437
11,439
268
45
313
11,752
(279)
(529)
(808)
(495)
10,944
10,944
1,391
9,859
(306)
10,944
As permitted by section 408 of the Companies Act 2006, the Parent company’s statement of Comprehensive Income
has not been included in these financial statements.The loss for the financial year for the parent company was
£10,737,141 (2016 – loss of £742,509)
These financial statements were approved and authorised for issue on 29 September 2017.
Signed on behalf of the Board of Directors
José Luis Vázquez
Chief Executive Officer
The notes on pages 33 to 59 form part of these financial statements.
28 / Company Statement of F i n an c i al Posi t io n
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the year ended 31 March 2017
Balance at 1 April 2016
Loss and total comprehensive income
for the year
Movement in foreign exchange
Share
capital
£’000
1,391
Share
premium
£’000
9,859
—
—
—
—
Total comprehensive loss for the year
1,391
9,859
Share based payment
—
—
Balance at 31 Mar 2017
1,391
9,859
Foreign
exchange
reserve
£’000
561
—
270
831
—
831
Merger
reserves
£’000
Accumulated
losses
£’000
Total
£’000
2,472
(3,993)
10,290
—
—
(5,512)
(5,512)
(4)
266
2,472
(9,509)
5,044
—
54
54
2,472
(9,455)
5,098
Balance at 1 April 2015
Loss and total comprehensive income
for the year
Movement in foreign exchange
Share
capital
£’000
1,141
—
—
Total comprehensive loss for the year
1,141
8,748
Share based payment
Issue of shares
Share issue costs
—
250
—
—
1,250
(139)
Share
premium
£’000
Foreign
exchange
reserve
£’000
Merger
reserves
£’000
Accumulated
losses
£’000
Total
£’000
8,748
258
2,472
(3,643)
8,976
—
—
—
303
561
—
—
—
—
—
(404)
—
(404)
303
2,472
(4,047)
8,875
—
—
—
54
—
—
54
1,500
(139)
Balance at 31 March 2016
1,391
9,859
561
2,472
(3,993)
10,290
The notes on pages 33 to 59 form part of these financial statements.
Consolid ate d Statem ent of Ch a nges i n Equity / 29
Review of the Year Corporate Governance Financial Statements COMPANY STATEMENT OF CHANGES IN EQUITY
For the year ended 31 March 2017
Balance at 1 April 2016
Loss and total comprehensive loss for the year
Share based payment
Balance at 31 March 2017
Share capital
£’000
Share premium
account
£’000
Retained earnings
£’000
1,391
9,859
—
—
—
—
(306)
(10,737)
54
1,391
9,859
(10,989)
Share capital
£’000
Share premium
account
£’000
Retained earnings
£’000
Total
£’000
10,944
(10,737)
54
261
Total
£’000
10,272
(743)
54
1,500
(139)
383
(743)
54
—
—
(306)
10,944
Balance at 1 April 2015
1,141
8,748
Loss and total comprehensive loss for the year
Share based payment
Issue of shares
Share issue costs
Balance at 31 March 2016
—
—
250
—
1,391
—
—
1,250
(139)
9,859
The notes on pages 33 to 59 form part of these financial statements.
30 / Company Statement of C h a ng es i n E qu i ty
CONSOLIDATED STATEMENT OF CASH FLOWS
For the year ended 31 March 2017
Cash flows from operating activities
Loss after tax
Adjustments for:
Depreciation of property, plant and equipment
Amortisation of intangible assets
Goodwill impairment charge
Share-based payment charge
Profit on disposal of fixed assets
Finance income
Finance expense
Taxation
Operating cash flows before movements in working capital
Decrease/(Increase) in trade and other receivables
Increase/(Decrease) in trade and other payables
Decrease in provisions
Taxation paid/(received)
Net cash generated from operating activities
Cash flows from investing activities
Interest and similar income received
Purchases of property, plant and equipment
Purchases of other intangible assets
Net cash used in investing activities
Cash flows from financing activities
Interest and similar expenses paid
Issue of share capital
Costs of share issue
Loans received
Repayment of loans
Net cash (used in)/generated from financing activities
Net (decrease)/increase in cash and cash equivalents
Cash and cash equivalents at the beginning of the period
Exchange losses on cash and cash equivalents
Cash and cash equivalents at the end of the year
Cash and cash equivalents comprise cash at bank less bank overdraft
The notes on pages 33 to 59 form part of these financial statements.
Notes
2017
£’000
2016
£’000
(5,512)
(404)
13
12
12
13
12
25
25
35
2,087
3,000
54
—
(3)
329
87
77
1,209
806
—
23
2,115
3
(47)
(2,441)
(2,485)
(329)
—
—
2,210
(1,971)
(90)
(460)
714
(32)
222
19
1,635
—
54
(1)
(5)
475
(425)
1,348
(273)
(27)
(500)
—
548
5
(73)
(2,343)
(2,410)
(475)
1,500
(139)
2,525
(962)
2,449
587
206
(79)
714
Consolid ate d Statem ent of Ca sh Flows / 31
Review of the Year Corporate Governance Financial Statements
COMPANY STATEMENT OF CASH FLOWS
For the year ended 31 March 2017
Cash flows from operating activities
Loss after tax
Adjustments for:
Depreciation of property, plant and equipment
Amortisation of intangible assets
Share-based payment charge
Investment amortisation charge
Finance income
Finance expense
Operating cash flows before movements in working capital
Decrease in trade and other receivables
Increase in trade and other payables
Decrease in provisions
Net cash (used in)/generated from operating activities
Cash flows from investing activities
Interests and similar expenses received
Investment in Mirada Iberia
Net cash used in investing activities
Cash flows from financing activities
Interests and similar expenses paid
Issue of share capital
Cost of share issue
Loans received
Net cash from financing activities
Net (decrease)/increase in cash and cash equivalents
Cash and cash equivalents at the beginning of the year
Cash and cash equivalents at the end of the year
The notes on pages 33 to 59 form part of these financial statements.
2017
£’000
2016
£’000
(10,737)
(743)
—
2
54
10,000
(14)
27
(668)
101
3,079
—
2,512
14
(2,573)
(2,559)
(27)
—
—
36
9
(38)
45
7
—
26
54
—
—
(1)
(664)
525
78
(500)
(561)
—
(846)
(846)
1
1,500
(139)
85
1,447
38
5
45
32 / Company Statement of Ca s h F lows
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Year ended 31 March 2017
1. General information
Mirada plc is a company incorporated in the United
Kingdom. The address of
the registered office
is
68 Lombard Street, London, EC3V 9LJ. The nature of
the Group’s operations and its principal activities are the
provision and support of products and services in the
Digital TV and Broadcast markets.
important function of the forecasts too. As such, there is a
risk that the group’s working capital may prove insufficient
to cover both operating activities and the repayment of its
debt facilities. In such circumstances, the group would be
obliged to seek additional funding though a placement of
shares or source other funding. The directors have had a
history of raising financing from similar transactions.
2. Significant accounting policies
Basis of accounting
These Group financial statements have been prepared
in accordance with
International Financial Reporting
Standards,
International Accounting Standards and
Interpretations issued by the International Accounting
Standards Board as adopted by European Union (“IFRSs”)
and with those parts of the Companies Act 2006 applicable
The directors have concluded that the circumstances set
forth above represent a material uncertainty, which may
cast significant doubt about the Company and Group’s
ability to continue as going concerns. However they believe
that taken as a whole, the factors described above enable
the Company and Group to continue as a going concern
for the foreseeable future. The financial statements do
not include the adjustments that would be required if the
Company and the Group were unable to continue as a
to companies preparing their accounts under IFRSs.
going concern
Going concern
Basis of consolidation
These financial statements have been prepared on the going
concern basis. The Directors have reviewed the Company
and Group’s going concern position taking account of its
current business activities, budgeted performance and
the factors likely to affect its future development, which
are set out in this Annual report, and include the Group’s
objectives, policies and processes for managing its capital,
its financial risk management objectives and its exposure to
credit and liquidity risks.
As at 31 March 2017, the Group had cash and cash
equivalents of £0.2m (2016: £0.7m), net cash generated
from operating activities of £2.1m (2016: net cash generated
of £0.5m), realised a loss for the year of £5.5m, which
included a one-off goodwill impairment of £3m (2016: a loss
of £0.4m), net current liabiliites of £1.9m (2016: net current
assets of £0.6m) and had net assets of £5.1m (2016: £10.3m).
The directors have prepared cash flow forecasts covering a
period of at least 12 months from the date of approval of the
financial statements. If the forecast is achieved, the Group
will be able to operate within its existing facilities. However
the time to close new customers and the value of each
customer, which are deemed high volume and low value in
nature are factors which constrain the ability to accurately
predict revenue performance. Furthermore investment
in winning customers, via marketing expenditure, and
servicing and delivering to new customers remains an
The consolidated financial statements incorporate the
financial statements of the Company and entities controlled
by the Company (its subsidiaries) made up to 31 March 2017.
Where the company has control over an investee, it
is classified as a subsidiary. The company controls an
investee if all three of the following elements are present:
power over the investee, exposure to variable returns from
the investee, and the ability of the investor to use its power
to affect those variable returns. Control is reassessed
whenever facts and circumstances indicate that there may
be a change in any of these elements of control.
Revenue recognition
Interactive service revenues are divided into 4 types:
development fees, the sale of licences managed services
and self-billing revenues.
Revenues from development fees (which include set-up
fees): these are recognised according to management’s
estimation of the stage of completion of the project. This
is measured by reference to the amount of development
time spent on a project compared to the most up to date
calculation of the total time estimated to complete the
project in full.
Notes to the Fi nanci al Statements / 33
Review of the Year Corporate Governance Financial Statements 2. Significant accounting policies – continued
Sale of license: Revenue from licenses are earned from
two specific and separate streams.
1) Where the revenue relates to the sale of a one off
licence, the licence element of the sale is recognised
as income when the following conditions have been
satisfied:
– The software has been provided to the customer in
a form that enables the customer to utilise it;
– The ongoing obligations of the Group to the
customer are minimal; and
– The amount payable by the customer is determinable
and there is a reasonable expectation of payment.
2) Contracts licence fees payable by customers are
dependent upon the number of end user subscribers
signing up to the customer’s digital television service.
For this type of contract revenues are recognised by
multiplying the individual licence fee by the net increase
in the customer’s subscriber base.
Managed services – revenue is measured on a straight line
basis over the length of the contract. Where agreements
involve multiple elements, the entire fee from such
arrangements
individual
elements based on each element’s fair value. The revenue
in respect of each element is recognised in accordance
with the above policies.
is allocated to each of the
Self-billing revenues: These are earned through a revenue-
share agreement between Mirada and the customer
which is presented in the Mobile segment. The Group
are informed by the customer of the amount of revenue
to invoice and the revenues are recognised in the period
these services are provided
Certain revenues earned by the Group are invoiced in
advance. As outlined in the revenue recognition policy
above, revenues are recognised in the period in which the
Group provides the services to the customer, revenues
relating to services which have yet to be provided to the
customer are deferred.
Business combinations
Acquisitions of businesses are accounted for using the
purchase method. The cost of the acquisition is measured
at the aggregate of the fair values, at the date of exchange,
of assets given, liabilities incurred or assumed, and equity
instruments issued or to be issued, by the Group in
exchange for control of the acquiree, plus any costs directly
attributable to the business combination. The acquiree’s
identifiable assets, liabilities and contingent liabilities that
meet the conditions for recognition under IFRS 3 are
recognised at their fair value at the acquisition date.
Goodwill arising on acquisition is recognised as an asset and
initially measured at cost and is accounted for according to
the policy below.
Goodwill
Goodwill represents the excess of the cost of acquisition
over the Group’s interest in the fair value of the identifiable
assets and liabilities of the acquired business at the date
of acquisition. Goodwill is initially recognised as an asset
at cost and is subsequently measured at cost less any
accumulated impairment losses.
On disposal of a subsidiary the attributable amount of
goodwill is included in the determination of the profit or
loss on disposal.
For the purpose of impairment testing, goodwill is allocated
to each of the Group’s cash-generating units expected
to benefit from the synergies of the combination. Cash-
generating units to which goodwill has been allocated are
tested for impairment annually, or more frequently when
there is an indication that the unit may be impaired. If the
recoverable amount of the cash-generating unit is less
than the carrying amount of the unit, the impairment loss
is allocated first to reduce the carrying amount of any
goodwill allocated to the unit and then to the other assets
of the unit pro-rata on the basis of the carrying amount of
each asset in the unit.
Other intangible assets
Intangible assets acquired as part of a business combination
are initially recognised at their fair value and subsequently
amortised on a straight line basis over their useful
economic lives. Intangible assets that meet the recognition
criteria of IAS 38, “Intangible Assets” are carried at cost less
amortisation and any impairment losses. Intangible assets
comprise of completed technology, acquired software,
capitalised development costs and goodwill.
Amortisation of other intangible assets is calculated over
the following periods on a straight line basis:
Completed technology
– over a useful life of 4 years
Deferred development costs – over a useful life of 3 to
4 years
34 / Notes to th e F in anc i al Stat eme nt s
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSYear ended 31 March 2017 – continued The amortisation is charged to administrative expenses in
Recoverable amount is the higher of fair value less costs
the consolidated income statement. Completed technology
to sell and value in use. In assessing value in use, the
relates to software and other technology related intangible
estimated future cash flows are discounted to their present
assets acquired by the Group from a third party. Deferrred
value using a pre-tax discount rate that reflects current
development costs are internally-generated intangible
market assessments of the time value of money and the
assets arising from work completed by the Group’s product
risks specific to the asset for which the estimates of future
development team.
cash flows have not been adjusted.
Internally-generated intangible assets – research and
If the recoverable amount of an asset (or cash-generating
development expenditure
Any internally-generated intangible asset arising from the
Group’s development projects are recognised only if all of
the following conditions are met:
unit) is estimated to be less than its carrying amount, the
carrying amount of the asset (cash-generating unit) is
reduced to its recoverable amount. An impairment loss is
recognised in the impairment of intangible assets line in the
consolidated income statement as an expense immediately.
• The technical feasibility of completing the intangible
asset so that it will be available for use or sale.
• The intention to complete the intangible asset and use
or sell it.
• The ability to use or sell the intangible asset.
• How the intangible asset will generate probable future
economic benefits. Among other things, the Group can
demonstrate the existence of a market for the output of
the intangible asset or the intangible asset itself or, if it is to
be used internally, the usefulness of the intangible asset.
• The availability of adequate technical, financial and
other resources to complete the development and to
use or sell the intangible asset.
Where an impairment loss subsequently reverses, the
carrying amount of the asset (cash-generating unit) is
increased to the revised estimate of its recoverable amount,
but so that the increased carrying amount does not exceed
the carrying amount that would have been determined had
no impairment loss been recognised for the asset (cash-
generating unit) in prior periods. A reversal of an impairment
loss is recognised as income immediately.
Goodwill impairments are not reversed.
Property, plant and equipment
Property, plant and equipment is stated at cost less
accumulated depreciation and any impairment in value.
Depreciation
is provided on all property, plant and
equipment, other than freehold land, at rates calculated
•
Its ability to measure reliably the expenditure attributable
to write off the cost, less estimated residual value based
to the intangible asset during its development.
on current prices, of each asset evenly over its expected
useful life, as follows:
If a development project has been abandoned, then any
unamortised balance is immediately written off to the income
– Office & computer equipment
33.3% per annum
statement. Where no internally-generated intangible asset
can be recognised, development expenditure is recognised
as an expense in the period in which it is incurred. The
amortisation is charged to administrative expenses in the
consolidated income statement.
Impairment of non current assets excluding deferred tax
assets
At each reporting date, the Group reviews the carrying
amounts of its tangible and intangible assets to determine
whether there is any indication that those assets have
suffered an impairment loss. If any such indication exists,
the recoverable amount of the asset is estimated in order
to determine the extent of the impairment loss (if any).
– Short-leasehold improvements 10% per annum
The carrying values of property, plant and equipment
are reviewed for impairment if events or changes in
circumstances indicate the carrying value may not be
recoverable. The asset’s residual values, useful lives and
methods are reviewed, and adjusted if appropriate, at each
financial period end.
Financial instruments
Financial assets and financial liabilities are recognised on
the Group’s balance sheet at fair value when the Group
becomes a party to the contractual provisions of the
instrument.
Notes to the Fi nanci al Statements / 35
Review of the Year Corporate Governance Financial StatementsNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSYear ended 31 March 2017 – continued 2. Significant accounting policies – continued
Employee share incentive plans
Trade receivables
Trade receivables represent amounts due from customers
in the normal course of business. All amounts are initially
stated at their fair value and are subsequently carried at
amortised cost, less provision for impairment which is
calculated on an individual customer basis, where there is
objective evidence.
Cash and cash equivalents
Cash and cash equivalents include cash at hand and
deposits held at call with banks with original maturities of
three months or less.
The Group issues equity-settled share-based payments to
certain employees (including directors). These payments
are measured at fair value at the date of grant by use
of the Black-Scholes pricing model. This fair value cost
of equity-settled awards is recognised on a straight-
line basis over the vesting period, based on the Group’s
estimate of shares that will eventually vest and adjusted
for the effect of any non market-based vesting conditions.
The expected life used in the model has been adjusted,
based on management’s best estimate, for the effects of
non-transferability, exercise restrictions, and behavioural
considerations. A corresponding credit is recorded in equity
in the retained earnings.
Financial liabilities and equity instruments
Leases
Financial liabilities and equity instruments are classified
according to the substance of the contractual arrangements
entered into. An equity instrument is any contract that
evidences a residual interest in the assets of the Group
after deducting all of its liabilities.
Equity instruments issued by the Company are recorded at
the proceeds received, net of direct issue costs.
Financial instruments issued by the Group are treated
as equity only to the extent that they do not meet the
definition of a financial liability. The Group’s ordinary shares
are classified as equity. When new shares are issued, they
are recorded in share capital at their par value. The excess
of the issue price over the par value is recorded in the share
premium reserve.
Incremental external costs directly attributable to the issue
of new shares (other than in connection with a business
combination) are recorded in equity as a deduction, net of
tax, to the share premium reserve.
Bank Borrowings
Interest-bearing bank loans are initially recorded at fair value
less direct issue costs. Finance charges are accounted
for on an accruals basis in the income statement using
the effective interest rate method and are added to the
carrying amount of the instrument to the extent that they
are not settled in the period in which they arise.
Trade payables
Leases taken by the Group are assessed individually as
to whether they are finance leases or operating leases.
Leases are classified as finance leases whenever the terms
of the lease transfer substantially all the risks and rewards
of ownership to the lessee. All other leases are classified as
operating leases.
Operating lease rental payments are recognised as an
expense in the income statement on a straight-line basis
over the lease term. The benefit of lease incentives is
spread over the term of the lease.
Taxation
The tax expense represents the sum of the current tax and
deferred tax charges.
The tax currently payable is based on taxable profit for the
period. Taxable profit differs from net profit as reported
in the income statement because it excludes items of
income or expense that are taxable or deductible in other
years and it further excludes items that are never taxable or
deductible. The Group’s liability for current tax is calculated
using tax rates that have been enacted or substantively
enacted by the reporting date.
Deferred tax is the tax expected to be payable or
recoverable on differences between the carrying amounts
of assets and liabilities in the financial statements and
the corresponding tax bases used in the computation of
taxable profit, and is accounted for using the balance sheet
liability method. Deferred tax liabilities are recognised for
Trade payables are initially measured at fair value, and
all taxable temporary differences and deferred tax assets
are subsequently measured at amortised cost, using the
are recognised to the extent that it is probable that taxable
effective interest rate method.
36 / Notes to th e Fin anc i al State me nts
profits will be available against which deductible temporary
differences can be utilised. Such assets and liabilities are
not recognised if the temporary difference arises from the
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSYear ended 31 March 2017 – continued initial recognition of goodwill or from the initial recognition
environment in which it operates (its functional currency).
(other than in a business combination) of other assets and
For the purpose of the consolidated financial statements,
liabilities in a transaction that affects neither the tax profit
the result and the financial position of each group company
nor the accounting profit.
are expressed in pound sterling, which is the functional
currency of the Company, and the presentation currency
The carrying amount of deferred tax assets is reviewed
for the consolidated financial statements.
at each reporting date and reduced to the extent that it
is no longer probable that sufficient taxable profits will be
On translation of balances into the functional currency of
available to allow all or part of the asset to be recovered.
the entity in which they are held, exchange differences
Deferred tax is calculated at the tax rates that are expected
retranslation of monetary items, are included in profit or
arising on the settlement of monetary items, and on the
to apply in the period when the liability is settled or the
loss for the period.
asset is realised. Deferred tax is charged or credited in the
income statement, except when it relates to items charged
For the purpose of presenting consolidated financial
or credited directly to equity, in which case the deferred tax
statements, the assets and liabilities of the Group’s foreign
is also dealt with in equity.
operations are translated at exchange rates prevailing
on the reporting date. Income and expense items are
Deferred tax assets and liabilities are offset when there is a
translated at the average exchange rates for the period,
legally enforceable right to set off current tax assets against
unless exchange rates fluctuate significantly during that
current tax liabilities and when they relate to income taxes
period, in which case the exchange rates at the date of
levied by the same taxation authority and the Group intends
transactions are used.
to settle its current tax assets and liabilities on a net basis.
Research and development tax credit
Companies within the group may be entitled to claim
special tax allowances in relation to qualifying research
and development expenditure (e.g. R&D tax credits). The
group accounts for such allowances as tax credits, which
means that they are recognised when it is probable that the
benefit will flow to the group and that benefit can be reliably
measured. R&D tax credits reduce current tax expense
and, to the extent the amounts due in respect of them are
not settled by the balance sheet date, reduce current tax
payable. A deferred tax asset is recognised for unclaimed
tax credits that are carried forward as deferred tax assets.
They are recognised to the extent that it is expected to be
Exchange differences arising on translating the opening
statement of financial position and the current year income
statements are classified as equity and transferred to
the Group’s foreign exchange reserve. Such translation
differences are recognised as income or an expenses in
the period in which the operations is disposed of.
Goodwill and fair value adjustments arising on the acquisition
of a foreign entity are treated as assets and liabilities of the
foreign entity and translated at the closing rate. The Group
has elected to treat goodwill and fair value adjustments
arising on acquisitions before the date of transition to IFRS
as sterling denominated assets and liabilities.
recoverable against future taxable profits.
3. Standards not yet effective to the Group
Retirement benefit costs
effective
The Group operates defined contribution pension schemes.
The following standards have been issued by the IASB and
The amount charged to the income statement in respect
have been adopted by the EU:
Standards,
interpretations and amendments not yet
of pension costs and other post-retirement benefits is the
contributions payable in the period.
Differences between contributions payable in the period
and contributions actually paid are shown as either accruals
or prepayments in the statement of financial position.
Foreign exchange
The individual financial statements of each group company
are presented in the currency of the primary economic
IFRS 9- Financial instruments (Applicable from January
2018)
IFRS 15- Revenue
(Applicable from January 2018)
from contracts with customers
Notes to the Financia l Statements / 37
Review of the Year Corporate Governance Financial StatementsNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSYear ended 31 March 2017 – continued 3.
Standards not yet effective to the Group –
The estimates and underlying assumptions are reviewed
continued
on an ongoing basis.
The following standards have been issued by the IASB and
have not yet been adopted by the EU:
IFRS 16- Leases
IAS 7 (Amendments)- Statements of Cash flows
Key sources of estimation uncertainty
The following are the critical judgements that the directors
have made in the process of applying the Group’s
accounting policies that has the most significant effect on
the amounts recognised in the financial statements.
IFRS 2- Classification and measurement of share based
Impairment of goodwill and intangibles
payments
Determining whether goodwill is impaired requires an
estimation of the value in use of the cash-generating units
IAS 12- Recognition of Deferred tax Assets for unrealised
to which goodwill has been allocated. The value in use
losses
calculation requires the Group to estimate the future cash
flows expected to arise from the cash-generating units and
The adoption of IFRS 16 is likely to result in an increase
the estimated future cash flows are discounted to their
in both assets and liabilities in the statement of financial
present value using a pre-tax discount rate that reflects
position; an increase in finance expenses; and a decrease in
operating loss in the statement of comprehensive income.
current market assessments of the time value of money and
the risks specific to the cash-generating unit. This includes
the directors’ best estimate on the likelihood of current
IFRS 15 is based on the principle that revenue is recognised
deals in negotiation not yet concluded. Consequently,
when control of a good or service transfers to a customer,
the outcome of negotiations may vary materially from
so the notion of control replaces the existing notion of risk
management expectation.
and reward. Mirada Plc is currently reviewing the revenue
in relation to its contracts with customers to determine
See note 12 for details of key assumptions and an
which, if any, will be impacted by IFRS 15. It is not yet in a
assessment of reasonable changes in key assumptions
position to conclude whether the implementation will have
used in the impairment test.
a material impact on its revenues.
The Directors anticipate that the adoption of IFRS 9 in future
periods will not have a material impact on the financial
statementsof the Group and Company.
The adoption of other amendments and interpretations
are likely to not have a material impact on the financial
statements of the Group and Company.
Capitalised development costs
Any internally generated intangible asset arising from
the Group’s development projects are recognised only
once all the conditions set out in the accounting policy
Internally Generated Intangible Assets (refer to note 2) are
met. The amortisation period of capitalised development
costs is determined by reference to the expected flow of
revenues from the product based on historical experience.
Furthermore, the Group reviews, at the end of each financial
4.
Critical accounting judgements and key
year, the capitalised development costs for each product
sources of estimation uncertainty
Critical judgements in applying the Group’s accounting
policies
In the application of the Group’s accounting policies,
which are described in note 2, the directors are required
to make judgements, estimates and assumptions about
the carrying amounts of assets and liabilities that are not
readily apparent from other sources. The estimates and
associated assumptions are based on historical experience
and other factors that are considered to be relevant. Actual
results may differ from these estimates.
for indications of any loss of value compared to net book
value at that time. This review is based on expected future
contribution less the total expected costs.
The Group capitalises spend on development new software
and the delivery of innovative software. Management
exercises judgement in establishing both the technical
feasibility of completing an intangible asset which can be
sold, and the degree of certainty that a market exists for the
asset, or its output, for the generation of future economic
benefits. In addition, amortisation rates are based on
estimates of the useful economic lives and residual values
of the assets involved.
38 / Notes to the F inan ci al Stat eme nt s
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSYear ended 31 March 2017 – continued 5. Segmental reporting
Reportable segments
The chief operating decision maker for the Group is ultimately the board of directors. For financial and operational
management, the board considers the Group to be organised into two operating divisions based upon the varying products
and services provided by the Group – Digital TV & Broadcast and Mobile. The products and services provided by each of
these divisions are described in the Strategic Report. The segment headed other relates to corporate overheads, assets
and liabilities.
Segmental results for the year ended 31 March 2017 are as follows:
Revenue
Segmental profit/(loss) (Adjusted EBITDA, see note 6)
Finance income
Finance expense
Depreciation
Amortisation
Goodwill amortisation charge
Share-based payment charge
Irrecoverable sales tax expense
Profit/(Loss) before taxation
Digital TV &
Broadcast
£›000
6,008
953
—
—
(33)
(2,085)
(3,000)
—
35
Mobile
£›000
563
124
—
—
(2)
(2)
—
—
—
Other
£›000
—
(1,034)
3
(329)
—
—
—
(54)
—
Group
£›000
6,571
43
3
(329)
(35)
(2,087)
(3,000)
(54)
35
(4,130)
120
(1,414)
(5,424)
£1,034,000 (2016: £898,000) disclosed as “Other” comprises employment, legal, accounting and other central administrative
costs from Mirada Plc.
The segmental results for the year ended 31 March 2016, presented on the revised basis, are as follows:
Revenue
Segmental profit/(loss) (Adjusted EBITDA, see note 6)
Finance income
Finance expense
Depreciation
Amortisation
Profit on sale
Share-based payment charge
Irrecoverable sales tax expense
Profit/(Loss) before taxation
There is no material inter-segment revenue.
Digital TV &
Broadcast
£’000
5,482
2,242
—
—
(19)
(1,612)
1
—
(150)
462
Mobile
£’000
537
154
—
—
—
(23)
—
—
—
Other
£’000
—
(898)
5
(475)
—
—
—
(54)
—
131
(1,422)
Group
£’000
6,019
1,498
5
(475)
(19)
(1,635)
1
(54)
(150)
(829)
The Group has a major customer in the Digital TV and Broadcast segment that generates revenues amounting to 10% or
more of total revenue that account for £5.5 million (2016: £4.5 million) of the total Group revenues.
Notes to the Fi nanci al Statement s / 39
Review of the Year Corporate Governance Financial StatementsNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSYear ended 31 March 2017 – continued 5. Segmental reporting – continued
The segment assets and liabilities at 31 March 2017 are as follows:
Additions to non-current assets
Total assets
Total liabilities
Digital TV
£’000
2,488
7,955
(6,433)
Mobile
£’000
—
175
(69)
Other
£’000
—
Group
£’000
2,488
3,987
12,117
(516)
(7,018)
Capital expenditure comprises additions to property, plant and equipment and intangible assets.
The segment assets and liabilities at 31 March 2016, presented on a revised basis, are as follows:
Additions to non-current assets
Total assets
Total liabilities
Digital TV
£’000
2,416
11,108
(5,016)
Mobile
£’000
—
139
(79)
Other
£’000
—
Group
£’000
2,416
4,822
16,069
(684)
(5,779)
Segment assets and liabilities are reconciled to the Group’s assets and liabilities as follows:
Digital TV – Broadcast & Mobile
Other:
Intangible assets
Property, plant & equipment
Other financial assets & liabilities
Total other
Total Group assets and liabilities
Assets
2017
£’000
8,130
3,946
-
42
3,987
12,117
Liabilities
2017
£’000
Assets
2016
£’000
6,501
11,247
Liabilities
2016
£’000
5,095
-
-
516
516
3,890
-
932
4,822
-
-
684
684
7,018
16,069
5,779
Assets allocated to a segment consist primarily of operating assets such as property, plant and equipment, intangible
assets, goodwill and receivables.
Liabilities allocated to a segment comprise primarily trade payables and other operating liabilities.
Geographical disclosures
UK
Spain
Latin America
40 / Notes to th e Finan ci al Stat em ent s
External revenue by
location of customer
Total assets by
location of assets
2017
£’000
620
803
5,148
6,571
2016
£’000
609
540
4,870
6,019
2017
£’000
4,342
7,761
14
2016
£’000
5,230
10,839
—
12,117
16,069
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSYear ended 31 March 2017 – continued 5. Segmental reporting – continued
Revenues by Products:
Development
Transactions
Licenses
Managed Services
6. Operating loss
This has been arrived at after charging:
Depreciation of owned assets (note 14)
Amortisation of intangible assets (note 13)
Goodwill impairment charge (note 12)
Operating lease charges
Analysis of auditors’ remuneration is as follows:
Digital TV &
Broadcast
2017
£’000
4,292
—
868
848
6,008
Mobile
2017
£’000
—
563
—
—
563
Digital TV &
Broadcast
2016
£’000
3,639
—
1,260
583
5,482
Mobile
2016
£’000
—
537
—
—
537
2016
£’000
19
1,635
—
265
2016
£’000
43
10
2017
£’000
35
2,087
3,000
315
2017
£’000
58
10
Remuneration receivable by the company’s auditor or an associate of the company’s auditor
for the auditing of these accounts
Audit of the accounts of subsidiaries
Reconciliation of operating profit for continuing operations to adjusted earnings before interest, taxation, depreciation and
amortisation:
Operating (loss)
Depreciation
Amortisation
Goodwill impairment charge (note 12)
Profit on disposal
Operating profit/(loss) before interest, taxation, depreciation, amortisation,
impairment (EBITDA)
Share-based payment charge
Irrecoverable sales tax (income)/expense
Adjusted EBITDA
2017
£’000
(5,099)
35
2,087
3,000
—
23
54
(34)
43
2016
£’000
(359)
19
1,635
—
(1)
1,294
54
150
1,498
Notes to the Financia l Statements / 41
Review of the Year Corporate Governance Financial StatementsNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSYear ended 31 March 2017 – continued 7. Staff costs and employee information
Staff costs (including directors) comprise:
Wages and salaries
Social security costs
Other pension costs
Share based payments
Staff costs
Group
2017
£’000
5,086
1,047
17
54
Group
2016
£’000
4,177
765
13
54
6,204
5,009
Company
2017
£’000
Company
2016
£’000
184
10
—
54
248
197
15
—
54
266
Contained within staff costs are amounts capitalised as intangible assets totalling £2.58m (2016: £2.4m), with £3.6m
(2016:£2.6m) charged to administrative expenses.
The Group operates a defined contribution pension scheme for certain employees. No directors are members of this
scheme in both the current year and the previous year.
The average number of persons, including executive directors, employed by the Group during the year was:
By activity
Office and management
Platform and development
Sales and marketing
2017
£’000
2016
£’000
10
118
6
134
8
107
6
121
The average number of persons, including executive directors, employed by the Company during the year was 7 (2016: 5)
within the office and management team.
Directors and key management personnel remuneration
Key management personnel are those persons having authority and responsibility for planning, directing and controlling
the activities of the Group, including the directors of the company listed on page 20, the Director of Business Development
and the Sales Director.
Salaries and fees
Social Security costs
Defined contribution pension cost
Other benefits
Share-based payments
42 / Notes to the Finan c ial Statem ents
2017
£’000
900
39
—
21
46
2016
£’000
758
33
—
16
46
1,006
853
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSYear ended 31 March 2017 – continued 7. Staff costs and employee information – continued
Director’s remuneration
The emoluments received by the directors who served durig the year were as follows:
Executive directors
Aggregate emoluments
Non-Executive directors
Aggregate emoluments
The directors’ remuneration is disclosed in the Directors’ Remuneration Report on page 22.
Emoluments payable to the highest paid director are as follows:
Aggregate emoluments
2017
£’000
2016
£’000
552
451
95
647
113
564
2017
£’000
238
2016
£’000
219
There were no Company contributions to the pension scheme or benefits on behalf of the highest paid director.
8. Finance income
Interest received on bank deposits
9. Finance expense
Bank interest payable
2017
£’000
3
3
2017
£’000
329
329
2016
£’000
5
5
2016
£’000
475
475
Finance charges include all fees directly incurred to facilitate borrowing. These include professional fees paid to accounting
practices, bank arrangement fees and fees to secure required guarantees.
Notes to the Financia l Statements / 43
Review of the Year Corporate Governance Financial StatementsNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSYear ended 31 March 2017 – continued 10. Taxation
The tax assessed on the loss on ordinary activities for the period differs from the standard rate of tax of 20% (2016-20%). The
differences are reconciled below:
Loss before taxation
Loss on ordinary activities multiplied by 20% (2016: 20%)
Effect of expenses not deductible for tax purposes
Losses carried forward
Witholding Taxes
Total current tax
Origination and reversal of temporary differences
Decrease of deferred tax assets
Total deferred tax
Subtotal
R&D
Foreign exchange
Total tax expense/(credit)
Deferred Taxation
2017
£’000
(5,425)
(1,085)
—
1,085
110
110
—
397
397
507
(456)
36
87
2016
£’000
(829)
(166)
13
153
—
—
—
191
191
191
(616)
—
(425)
Deferred tax assets were recognised in prior years in respect of tax losses for Mirada Connect Limited, tax losses for Mirada
Iberia S.A. and research and development investment for Mirada Iberia S.A and other temporary differences giving rise to
deferred tax assets. Deferred tax assets related to tax losses have been reduced by £397,000 during FY17 in Mirada Iberia S.A.
Foreign exchange differences of £2,000 arising on consolidation of the deferred tax asset are recognised in other
comprehensive income.
Reconciliation of deferred tax asset and liabilities:
2017
Asset
£’000
395
—
2016
Asset
£’000
543
—
(397)
(191)
—
2
—
—
43
395
Balance at 1 April
Other tax credit
Reversal of Deferred tax asset
Other Temporary Deductible differences
Forex
Balance at the end of year
44 / Notes to th e F in anc i al Stat eme nt s
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSYear ended 31 March 2017 – continued 10. Taxation – continued
Deferred taxation amounts not recognised are as follows:
Losses
Research & Development Tax Credits, useable against
future profits
Group
2017
£’000
10,753
2,199
Group
2016
£’000
9,668
2,199
Company
2017
£’000
Company
2016
£’000
8,034
7,297
-
-
Balance at the end of the year
12,952
11,867
8,034
7,297
The gross value of tax losses carried forward at 31 March 2017 equals £58.5 million (2016: £56.0 million).
The deferred tax asset for the company has not been recognised on the grounds that there is insufficient evidence at the
balance sheet date that it will be recoverable. The asset would start to become potentially recoverable if, and to the extent
that, the company were to generate taxable income in the future.
11. Earnings per share
Loss for year
Weighted average number of shares
Basic loss per share
Diluted loss per share
Adjusted EBITDA per share
Adjusted EBITDA (refer note 6)
Weighted average number of shares
Basic adjusted EBITDA per share
Diluted adjusted EBITDA per share
Year ended
31 March 2017
Total
Year ended
31 March 2016
Total
£(5,514,054)
£(404,647)
139,057,695 122,345,366
£(0.04)
£(0.003)
£(0.04)
£(0.003)
Year ended
31 March 2017
Total
Year ended
31 March 2016
Total
£42,330 £1,497,955
139,057,695 122,345,366
—
—
£0.012
£0.012
The Company has 4,697,166 (2016: 4,697,166) potentially dilutive ordinary shares arising from share options issued to staff.
However, in 2017 and 2016 the loss attributable to ordinary shareholders and weighted average number of ordinary shares
for the purpose of calculating the diluted earnings per ordinary share are identical to those used for basic earnings per
ordinary share. This is because the exercise of share options would have the effect of reducing the loss per ordinary share
and is therefore anti-dilutive.
Notes to the Financia l Statements / 45
Review of the Year Corporate Governance Financial StatementsNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSYear ended 31 March 2017 – continued 12. Intangible assets
Cost
At 1 April 2015
Additions
Foreign exchange
At 31 March 2016
At 1 April 2016
Additions
Foreign exchange
At 31 March 2017
Accumulated amortisation and impairment
At 1 April 2015
Provided during the year
Foreign exchange
At 31 March 2016
At 1 April 2016
Provided during the year
Impairment charge
Foreign exchange
At 31 March 2017
Net book value
At 31 March 2017
At 31 March 2016
At 31 March 2015
Company
Cost
At 1 April 2016 and 31 March 2017
Depreciation
At 1 April 2016
Provided during the year
At 31 March 2017
Net book value
At 31 March 2017
At 31 March 2016
46 / Notes to the F in anc i al State ments
Deferred
development
costs
£’000
Completed
Technology
£’000
Total Intangible
assets
£’000
7,526
2,257
870
10,653
10,653
2,297
1,162
1,032
86
18
1,136
1,136
144
24
8,558
2,343
888
11,789
11,789
2,441
1,186
Goodwill
£’000
29,083
—
—
29,083
29,083
—
—
14,112
1,304
15,416
29,083
4,735
1,595
532
6,862
6,862
2,016
—
660
980
40
17
1,037
1,037
71
—
17
5,715
1,635
549
7,899
7,899
2,087
—
677
22,137
—
—
22,137
22,137
—
3,000
—
9,537
1,126
10,663
25,137
4,575
3,791
2,791
178
99
52
4,753
3,890
2,843
3,946
6,946
6,946
Deferred
development
costs
£’000
139
137
2
139
—
2
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSYear ended 31 March 2017 – continued 12. Intangible assets – continued
The key assumptions for the value in use calculations are those regarding the discount rate applied, and the forecast sales
growth in a five year budget period approved by management. Management estimates discount rates using pre-tax rates
that reflect current market assessments of the time value of money and the risks specific to the CGUs.
There are 2 CGUs that have been assessed for impairment, Digital TV – Broadcast and Connect. The sales growth forecasts
are based on current contracts and management’s estimate of revenues relating to opportunities that are currently being
pursued for the two different CGUs. CGUs defined are: “Digital TV – Broadcast” which refers to the provision of software
for the Digital TV market. Major customers are Digital TV platforms, mostly Pay TV service providers and the Group provide
the technology needed to facilitate the final user’s interaction with the devices they provide; and “Connect” refers to Mirada
Connect providing cashless payment solutions to car park operators through a revenue-share agreement This rate does
not exceed the average long-term growth rate for the relevant markets. The rate used to discount the forecast pre-tax
cash flows for both CGUs is 13.3% (2016: 15.1%). A 1% increase/decrease to the discount rate results in a £500k increase and
600k decrease to the impairment processed. A 1% increase/decrease to the average sales growth over the forecast period
results in a £100k decrease and a £700k increase to the impairment processed.
During the year, the Group has not achieved their budget mainly due to a different revenue mix and the increased
spending on sales, marketing and operational capabilities required for the achievement and successful execution of new
contract wins. This has resulted in an impairment (allocated to the Digital TV – Broadcast CGU) to goodwill of £3.0 million
(2016: £0.0 million).
Digital TV – Broadcast
Connect
Group
2017
£’000
3,390
556
3,946
Group
2016
£’000
6,390
556
6,946
Notes to the Fi nanci al Statement s / 47
Review of the Year Corporate Governance Financial StatementsNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSYear ended 31 March 2017 – continued 13. Property, plant and equipment
Cost
At 1 April 2015
Additions
Disposals
Foreign exchange
At 31 March 2016
At 1 April 2016
Additions
Foreign exchange
At 31 March 2017
Amortisation
At 1 April 2015
Provided during the year
Disposals
Foreign exchange
At 31 March 2016
At 1 April 2016
Provided during the year
Foreign exchange
At 31 March 2017
Net book value
At 31 March 2017
At 31 March 2016
At 31 March 2015
The Company has no Property, plant and equipment.
14. Investments
Company
Cost
At 1 April 2016
Additions
Impairment
At 31 March 2017
Amounts provided
At 1 April 2016
At 31 March 2017
Net book value
At 31 March 2017
At 31 March 2016
48 / Notes to the F inan ci al Stat eme nt s
Office and
computer
equipment
£’000
Short-leasehold
improvements
£’000
1,315
73
(702)
26
712
712
47
31
790
1,274
19
(701)
26
618
618
35
24
677
113
94
41
49
—
(3)
—
46
46
—
—
46
49
—
(3)
—
46
46
—
—
46
—
—
—
Total
£’000
1,364
73
(705)
26
758
758
47
31
836
1,323
19
(704)
26
664
664
35
24
723
113
94
41
£’000
17,739
2,573
(10,000)
10,312
6,302
6,302
4,010
11,437
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSYear ended 31 March 2017 – continued 14. Investments – continued
The Company increased its participation in Mirada Iberia, SA by £2.57 million for the financial year ended 31 March 2017
As detailed in note 12 the Group has not achieved their budget mainly due to a different revenue mix and the increased
amortisation and spending on sales, marketing and operational capabilities required for the achievement and successful
execution of new contract wins. The Company has processed an impairment of £10m to their investments in subsidiaries.
Management have assessed the recoverable amount of investments in Digital Impact and Mirada Iberia to be less than
their carrying amounts. The key assumptions for the value in use calculations are those regarding the discount rate applied,
and the forecast sales growth in a five year budget period approved by management. Management estimates discount
rates using pre-tax rates that reflect current market assessments of the time value of money and the risks specific to the
investment.
The sales growth forecasts are based on current contracts and management’s estimate of revenues relating to opportunities
that are currently being pursued. The cash flow forecasts are extrapolated for the balance of 20 years based on an estimated
growth rate of 2.5% (2016: 2.5%) for segments Digital TV – Broadcast and Connect. This rate does not exceed the average
long-term growth rate for the relevant markets. The rate used to discount the forecast pre-tax cash flows is 13.3% (2016:
15.1%).
Details of the investments in which the Company holds 20% or more of the nominal value of any class of share capital are
as follows:
Name of company
Holding
% Voting rights
Country of
incorporation
Registered address
Nature of business
Television Group Limited
Ordinary
68 Lombard Street
shares
100%
Digital Impact (UK) Limited* Ordinary
shares
100%
100%
Mirada Connect Ltd
Mirada Iberia, S.A.
Mirada Mexico, S.A.*
Ordinary
shares
Ordinary
shares
Ordinary
shares
* Held indirectly in Mirada Iberia S.A.
UK
UK
UK
London EC3V 9LJ
Dormant
68 Lombard Street
London EC3V 9LJ
Interactive TV Services
68 Lombard Street
Payment solutions
London EC3V 9LJ
provider
Avda.General Fanjul 2B
100%
Spain
28044 Madrid
Interactive TV services
100%
Mexico
11000 México DF
Interactive TV services
Montes Urales 505-2º
Notes to the Fi nanci al Statements / 49
Review of the Year Corporate Governance Financial StatementsNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSYear ended 31 March 2017 – continued 15. Trade & other receivables
Trade receivables
Amounts owed by group undertakings
Allowance for bad debts
Other receivables
R&D tax credit
Prepayments and accrued income
Non current other receivables R&D tax credit
Group
2017
£’000
800
—
—
1,015
218
542
2,575
508
508
Group
2016
£’000
1,449
—
(23)
421
425
1,567
3,839
191
191
Company
2017
£’000
Company
2016
£’000
—
133
—
4
—
30
167
—
—
1
235
—
4
—
28
268
—
—
Additionally, both Mirada Iberia and Digital Impact have prepared the legal documentation to apply for R&D tax credit. The
total amount of these tax credits is £0.7m, of which £0.5m will be collected after March 2018.
Trade receivables
Trade receivables net of allowances are held in the following currencies:
Sterling
US Dollars
Euro
Total
2017
£’000
72
385
343
800
2016
£’000
59
1,171
196
1,426
The fair values of trade and other receivables are the same as book values as credit risk has been addressed as part of
impairment provisioning and, due to the short term nature of the amounts receivable, they are not subject to other ongoing
fluctuations in market rates.
Before accepting any new customer, the Group uses a credit approval process to assess the potential customer’s credit
quality and defines credit limits by customer.
Included in the Group’s trade receivable balance are debtors with a carrying amount of £396,000 (2016: £546,000) which
are past due at the reporting date and have been collected before 30 June 2017. The average age of these receivables is
107 days (2016: 77 days).
Ageing of past due but not impaired trade receivables:
30-60 days
60-90 days
90+ days
Total
50 / Notes to the F in anc i al State me nts
2017
£’000
42
89
265
396
2016
£’000
282
224
40
546
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSYear ended 31 March 2017 – continued 15. Trade & other receivables – continued
Movement in allowance for doubtful debts:
Balance at beginning of year
Utilised in year
Foreign exchange
Balance at the end of the year
2017
£’000
23
(23)
—
—
2016
£’000
28
—
(5)
23
In determining the recoverability of a trade receivable the Group considers any change in the credit quality of the trade
receivable from the date credit was initially granted up to the reporting date.
Ageing of impaired receivables:
+120 days
2017
£’000
—
2016
£’000
23
The maximum exposure to credit risk at the reporting date is the fair value of each class of receivable set out above. Trade
receivables have been collected post year end.
The company has no trade receivables.
16. Trade and other payables
The fair values of trade and other payables are the same as book values as due to the short term nature of the amounts
payable, they are not subject to other ongoing fluctuations in market rates.
Trade payables and accruals principally comprise amounts outstanding for trade purchases and ongoing costs. The average
credit period taken for trade purchases is 63 days (2016: 76 days).
Trade payables
Amount owed to group undertakings
Other payables
Other taxation and social security taxes
Accruals
Deferred income
Group
2017
£’000
470
—
323
215
105
1,476
2,589
Group
2016
£’000
553
—
456
—
270
291
Company
2017
£’000
67
3,410
49
31
—
51
1,570
3,608
Company
2016
£’000
67
189
51
28
193
—
529
Notes to the Financia l Statements / 51
Review of the Year Corporate Governance Financial StatementsNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSYear ended 31 March 2017 – continued 16. Trade and other payables – continued
Maturity analysis of the group and company financial liabilities, excluding other taxation and social security and deferred
income, is as follows:
Up to 3 months
3 to 6 months
6 to 12 months
17. Loans and borrowings
Advances Drawn on invoice discounting facilities
Bank loans
Other Loans
The borrowings are repayable as follows:
Up to 3 months
3 to 6 months
6 to 12 months
Group
2017
£’000
428
85
385
898
Group
2017
£’000
—
2,064
63
2,127
Group
2016
£’000
845
148
311
1,304
Group
2016
£’000
822
1,354
243
2,419
1,601
1,482
203
323
251
686
2,127
2,419
Company
2017
£’000
Company
2016
£’000
1,861
524
1,142
3,527
500
—
—
500
Company
2017
£’000
Company
2016
£’000
—
315
—
315
—
—
315
315
—
279
—
279
—
—
279
279
At 31 March 2017, the Group has £0.77 million in available credit lines not used and £2.40 million in available invoice
discounting lines not used.
The above bank loans are denominated in Euros and are unsecured.
Interest-bearing bank loans are initially recorded at fair value less direct issue costs.
Directors estimate the fair value of the Group’s borrowing to be consistent with its carrying value. There is no material difference
between the value of the gross undiscounted cash flows and carrying amounts in the statement of financial position.
18. Non-current liabilities
Interest bearing loans and borrowings:
Bank loans
Other loans
Other non-current payables:
Other taxation and social security taxes
52 / Notes to th e F in anc i al Stat eme nt s
2017
£’000
2016
£’000
1,059
1,244
2,302
1,298
474
1,772
—
18
2,302
1,790
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSYear ended 31 March 2017 – continued 18. Non-current liabilities – continued
Other loans relate to loans received by the Group’s Spanish operation to assist in funding the continued development of the
Group’s Digital TV products.
Capital risks have been analysed in the Director’s report (page 20)
Net Debt
Net Debt is calculated based on short term loans, long terms loans and cash and cash equivalents:
Loans and borrowings – Current
Loans and borrowings – Non Current
Cash
Net Debt
Borrowings, including interest, are repayable as follows:
Bank loans
On demand or within one year
Between one and two years
Between two and five years
Other loans
On demand or within one year
Between one and two years
Between two and five years
More than 5 years
Advances drawn on invoice discounting
On demand or within one year
Total borrowings
On demand or within one year
Between one and two years
Between two and five years
More than 5 years
2017
£’000
2,127
2,302
(222)
4,207
2016
£’000
2,419
1,772
(714)
3,477
2017
£’000
2016
£’000
1,096
1,437
535
566
646
758
2,197
2,841
1,080
126
641
486
2,333
—
—
2,176
661
1,207
486
4,530
247
113
364
—
724
821
821
2,505
759
1,122
4,386
19. Retirement benefit schemes
The Group operates defined contribution pension schemes. The pension charge for the period represents contributions
payable by the Group to the schemes and amounted to £16,733 (2016: £11,855).
At 31 March 2017, contributions amounting to £4,135 (2016: £3,555) were payable and included in other payables.
Notes to the Fi nanci al Statements / 53
Review of the Year Corporate Governance Financial StatementsNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSYear ended 31 March 2017 – continued 20. Financial instruments
Capital risk management
The Group manages its capital to ensure that entities in the Group will be able to continue as a going concern while
maximising the return to stakeholders through the optimisation of the debt and equity balance. The capital structure of the
Group consists of debt, which includes the borrowings disclosed in note 17 and 18, and equity attributable to equity holders
of the parent, comprising issued capital, reserves and retained earnings as disclosed in the Consolidated Statement of
Changes in Equity and note 21.
Externally imposed capital requirement
The Group is not subject to externally imposed capital requirements.
Categories of financial instruments
Financial assets
Asset held at cost:
– Trade and other receivables, excluding prepayments
– Cash and cash equivalents
Financial liabilities
Liabilities at amortised cost:
- Trade and other payables*
- Loans and borrowings due within one year
- Interest bearing loans and borrowings due after one year
- Other payables due after one year
* Excluding other taxation, social security and deferred income.
Financial risk management objectives
2017
£’000
2016
£’000
2,389
222
2,611
897
2,127
2,302
—
3,622
714
4,336
1,304
2,419
1,772
18
5,326
5,513
The Group monitors and manages the risks relating to the financial instruments held. These risks are discussed in further
detail below.
Market risk
The Group’s activities expose it primarily to the financial risks of changes in foreign currency exchange rates and interest
rates. The Group does not use forward foreign exchange contracts to hedge exchange rate risk.
Foreign currency risk management
The Group has undertaken certain transactions denominated in foreign currencies. Hence, exposures to exchange rate
fluctuations arise.
The majority of cash at bank is held in Sterling and Euro accounts. There are also trade balances in these currencies. The
Group is increasing signing more sales contracts in US dollars and is currently investigating ways of reducing the risk on any
potential future fluctuations in the US dollar exchange rate. Any foreign exchange gains or losses on trading activities are
recognised in the consolidated income statement.
54 / Notes to th e Fin an c ial Statem ents
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSYear ended 31 March 2017 – continued 20. Financial instruments – continued
The company is aware that the UK decision to leave the European Union may affect the intercompany trading between the
different subsidiaries. We will adapt our internal policies accordingly if required. In the short term, exchange rates are likely
to increase the GBP denominated revenues, as the primary cash inflows for the Group are based in US dollars. Brexit has
not been considered to be as a principal risk due to the non-EU focussed customer base.
The carrying amounts of the Group’s material foreign currency denominated monetary assets and monetary liabilities at the
reporting date are as follows:
US Dollar denominated assets and liabilities
Euro denominated assets and liabilities
Entities from United Kingdom have no balance Euro/USD.
Foreign currency sensitivity analysis
Liabilities
Assets
2017
£’000
—
2016
£’000
—
2017
£’000
385
6,375
4,960
2,434
2016
£’000
1,197
4,059
The following table details the Group’s sensitivity to a 20% increase and decrease in Sterling against the Euro and a 10%
increase and decrease in Sterling against the USD. The sensitivity analysis includes Euro and USD denominated monetary
items and adjusts their translation at the period end for a 20% change in the Euro/Sterling rate and for a 10% change in the
USD/Starling rate at March 31, 2016. Due to the Brexit, the Company has used a 20% change in the Euro/Sterling rate at
March 31, 2017. A positive number below indicates an increase in profit and other equity where Sterling strengthens against
the relevant currency. For a weakening of Sterling against the relevant currency, there would be an equal and opposite
impact on the profit and other equity, and the balances below would be negative. The sensitivities below are based on the
exchange rates at the balance sheet used to convert the asset or liability to sterling.
Euro
USD
Interest rate risk management
Profit and loss impact
2017
£’000
(985)
(438)
2016
£’000
225
100
At 31 March 2017, the Group was exposed to interest rate risk as the interest payable on some of the Group’s loans and
borrowings are linked to Euribor. The Group’s loans and borrowings where interest payable is linked to Euribor include bank
loans and development loans totalling £641,732. The remaining bank loans totalling £2,698,679 pay fixed rates of interest.
Neither interest rate swaps contracts nor forward interest rate contracts are used to hedge any risks arising.
If interest rates changed by 1% (100 basis points) the profit and loss impact would not be material to the Group’s results.
Credit risk management
Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the
Group. The Group faces exposure to credit risk on its trade receivables and cash equivalents. The Group has some exposure
to credit risk from credit sales. It is the Group’s policy to assess the credit risk of new customers before entering into
contracts. Historically, as Mirada’s customers are mainly broadcasters and medium/large telecommunication companies,
bad debts across the Group have been low.
Notes to the Financia l Statements / 55
Review of the Year Corporate Governance Financial StatementsNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSYear ended 31 March 2017 – continued 20. Financial instruments – continued
The risk of financial loss arising from defaults on trade receivables is mitigated by the Group using a credit approval
process to assess the potential customers’ credit quality and also establishes credit limits by customer. The limits and credit
scores attributed to customers is reviewed bi-annually however, the sales ledger is reviewed at least monthly to ensure all
receivables are recoverable.
Please refer to note 15 for further details on trade receivables, including analyses of bad debts, ageing and profile by
currency.
The Group believes the credit risk on liquid funds, being cash and cash equivalents, to be limited because the counterparties
are banks with high-credit ratings assigned by international credit-rating agencies. However, the concentration of credit risk
by counterparty does exceed 10% of the overall cash and cash equivalents balance (being £22,178 at 31 March 2017 and
£470,000 at 31 March 2016) in some cases. The table below shows the balance of counterparties at the reporting date in
excess of 10% of the overall balance, together with the Standard and Poor’s credit rating symbols.
Counterparty
Rating
Santander
LiberBank
BBVA
Barclays
Bankia
Bankinter
A-
N/A
BBB+
A-
BBB-
BBB
Liquidity risk management
2017
% of overall
cash & cash
equivalents
7.0%
—
—
27.7%
6.2%
47.0%
Carrying
amount
£’000
16
—
—
61
14
104
2016
% of overall
cash & cash
equivalents
—
7.4%
65.8%
5.9%
—
—
Carrying
amount
£’000
—
53
470
42
—
—
Liquidity risk arises from the Group’s management of working capital and the finance charges and principal repayments on
its debt instruments. It is the risk that the Group will encounter difficulty in meeting its financial obligations as they fall due.
The Group manages liquidity risk by maintaining adequate reserves, banking facilities and reserve borrowing facilities by
continuously monitoring forecast and actual cash flows and matching the maturity profiles of financial assets and liabilities.
As part of this monitoring the Group ensures that the financial liabilities due to be paid can be met by existing cash and cash
equivalents, forecasted receipts from customers and borrowing facilities.
Tables showing the maturity profile of the Group’s financial liabilities are included in notes 16, 17 and 18.
21. Share capital
A breakdown of the authorised and issued share capital in place as at 31 March 2017 is as follows:
Allotted, called up and fully paid
Ordinary shares of £0.01 each
2017
Number
2017
£’000
2016
Number
2016
£’000
139,057,695
1,391
139,057,695
1,391
56 / Notes to th e Finan ci al Stat em ent s
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSYear ended 31 March 2017 – continued 22. Reserves
Share premium
The amount subscribed for share capital in excess of nominal value.
Foreign exchange reserve
This reserve relates to exchange differences arising on the translation of the balance sheet of the Group’s foreign operations
at the closing rate and the translation of the income statement of those operations at the average rate.
Merger reserve
Under the provisions of s612 of the Companies Act 2006, the premium that arose on the shares issued as consideration in
the acquisition of Mirada Iberia S.A, formally known as Fresh Interactive Technologies S.A, has been taken to the merger
reserve.
23. Share based payments
Equity settled share option scheme
On 20 December 2013 the Company granted a total of 5,301,238 share options to certain employees and directors through
approved and unapproved share option schemes. The exercise price for these options is £0.10. The exercise of these
options is not subject to any performance criterion and they vest in three equal instalments on 1 January 2015, 1 February
2015 and 1 March 2016. If the options remain unexercised after a period of ten years from the date of grant the options
expire. The options are forfeited if the employee leaves before the options vest. The directors granted options under this
scheme are as follows:
Jose Gozalbo Sidro
Jose Luis Vazquez
Javier Casanueva
Francis Coles
Rafael Martin Sanz
No. of share options
938,728
631,464
247,850
185,888
185,888
In prior periods the Company has granted share options to employees and directors through approved and unapproved
share option schemes. The exercise of options for all options granted during the 15 months ended 31 March 2008 is subject
to a performance criterion being satisfied. The exercise of options granted prior to 1 January 2007 is not subject to any
performance criterion. If the options remain unexercised after a period of ten years from the date of grant the options expire.
The options are forfeited if the employee leaves before the options vest.
In accordance with IFRS 2 the Group has elected not to apply IFRS 2 to options granted on or before 7 November 2002 or
to options which had vested by 1 January 2006.
Notes to the Fi nanci al Statements / 57
Review of the Year Corporate Governance Financial StatementsNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSYear ended 31 March 2017 – continued 23. Share based payments – continued
Details of the share options outstanding during the period for options issued since 22 June 2007 are as follows:
Outstanding at the beginning of period
Granted during period
Lapsed during period
Exercised during period
Outstanding at the end of the period
Exercisable at the end of the period
2017
2016
No. of share
options
4,697,166
—
—
—
4,697,166
4,697,166
Weighted average
exercise price
(£)
0.10
—
0.10
—
0.10
0.10
No. of share
options
5,602,238
—
(905,072)
—
4,697,166
4,697,166
Weighted average
exercise price
(£)
0.10
—
0.10
—
0.10
0.10
The options outstanding at 31 March 2017 and at 31 March 2016 had a range of exercise prices from £0.10 to £1.85.
The options outstanding at 31 March 2017 had a weighted average remaining contractual life of 4.4 years (2016: 5.4 years).
For the year ended 31 March 2017, the Group has recognised a total expense of £54,000 (2016: £54,000) related to
equity-settled share-based payment transactions.
The estimated fair values for determining this charge were calculated using the Black-Scholes option pricing model. This
produces a fair value for each grant of options made and the fair value is then charged over the vesting period, which is
three years.
24. Operating lease arrangements
At the reporting date, the Group had outstanding commitments for future minimum lease payments under non-cancellable
operating leases, which fall due as follows:
Within one year
In second to fifth years inclusive
Group
2017
£’000
261
294
555
Group
2016
£’000
232
331
563
Company
2017
£’000
Company
2016
£’000
25
15
40
23
4
27
Operating lease payments represent rentals payable by the Group for its office properties. Leases of buildings are subject
to rent reviews at specified intervals and provide for the leasee to pay all insurance, maintenance and repair costs.
25. Notes supporting cash flow statement
Cash and cash equivalents comprise:
Cash available on demand
Net cash (decrease)/increase in cash and cash equivalents
Cash and cash equivalents at beginning of year
Cash and cash equivalents at end of year
58 / Notes to the Fin an c ial Statem ents
2017
£’000
222
(492)
714
222
2016
£’000
714
508
206
714
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSYear ended 31 March 2017 – continued 25. Notes supporting cash flow statement – continued
Cash and cash equivalents
Cash and cash equivalents are held in the following currencies:
Sterling
Mexican Peso
Euro
Total
2017
£’000
61
8
153
222
2016
£’000
41
—
673
714
26. Related party transactions
On 7 January 2016, Matthew Earl, Non-Executive Director of the Company, on the same day transferred 166,667 ordinary
shares from a nominee account into a personal SIPP at a price of 5.125p per ordinary share.
As part of the £1.5m placing on 24th November 2016, key management personal participated in the placing and acquired
£70,000 of shares on the same terms as other participants.
At the year £zero (2016:£1,068) was payable to José Luis Vázquez, a director of Mirada plc (2016: £1,068).
Company
Details of balances and transactions with related parties:
Mirada Iberia
Digital Impact
Mirada Connect
Digital Interactive TV Group
27. Events after the reporting date
Year ended 31 March 2017
Year ended 31 March 2016
Balance
£’000
Transactions
£’000
Balance
£’000
Transactions
£’000
(3,410)
(80)
213
—
227
14
—
—
(189)
(34)
269
—
187
16
—
(163)
On 29 August 2017 the Company announced a contract win with ATN International, Inc. (“ATNi”), a NASDAQ-listed company,
which operates in several US and Caribbean locations under various trade names. Under the contract, Mirada will provide
products and services to four different Caribbean operators owned by ATNi located in the U.S. Virgin Islands, Bermuda,
the Cayman Islands and French Guyana. Mirada will deploy its complete suite of Iris multiscreen products, including its
over-the-top (“OTT”) solution and back-end platform, Iris SDP, across these networks. The commercial launch and
subsequent commercial deployment is expected to occur towards the end of Mirada’s current financial year.
Notes to the Fi nanci al Statement s / 59
Review of the Year Corporate Governance Financial StatementsNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSYear ended 31 March 2017 – continued
OFFICERS AND PROFESSIONAL ADVISERS
Directors
Mr Javier Casanueva
Mr José Luis Vázquez
Mr Francis Coles
Mr Matthew Earl
Mr Jose Gozalbo
Mr Gonzalo Babío
Company Secretary
Filex Services Limited
Non-Executive Chairman
Chief Executive Officer
Non-Executive Director
Non-Executive Director
Executive Director
Executive Director
Nominated Adviser and Broker
Auditors
BDO LLP
55 Baker Street
London
W1U 7EU
Company Registrars
Capita Registrars Limited
Bourne House
34 Beckenham Road
Kent
BR3 4TU
Allenby Capital Limited
3 St Helen’s Place
London
EC3A 6AB
Bankers
Barclays Bank plc
1 Churchill Place
London
E14 5HP
Lawyers
Howard Kennedy LLP
No 1. London Bridge
London
W1W 5LS
Registered Office
68 Lombard Street
London
EC3V 9LJ
60 / Officers and Profess i o nal Adv i se rs
L O N D O N H E A D Q U A R T E R S
68 Lombard Street, London - EC 3V 9LJ
+44 (0)207 868 2104 · investors@mirada.tv
m i r a d a . t v