AUDIOVISUAL INTERACTION
MADE EASY
Products
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PB / Our product s
2018
A N N U A L R E P O R T
A N D A C C O U N T S
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
13
Strategic Report
17
CORPORATE GOVERNANCE
Directors´� Report
19
Directors�´ Remuneration Report 21
FINANCIAL STATEMENTS
Statement of Directors´� Responsibilities 22
Independent Auditors´� Report 23
Consolidated Statement of Comprehensive Income 28
Consolidated Statement of Financial Position 29
Company Statement of Financial Position 30
Consolidated Statement of Changes in Equity 31
Company Statement of Changes in Equity 32
Consolidated Statement of Cash Flows 33
Company Statement of Cash Flows 34
Notes to the Consolidated Financial Statements 35
Officers and Professional Advisers 64
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
VP 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.
2 / Executive Man ageme 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 PEÑÍN
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
VP 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 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 eighteen 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 · SPAIN · MEXICO
REPRESENTATIVES
SLOVENIA · SINGAPORE · CHILE
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
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
operator'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
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.
Data intelligence platform
LogIQ
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.
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
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.
The global pay TV market, one of the fastest growing
industries in the world, is on track to reach $254.77bn by 2025.
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 a t a x i s , 2 0 1 7 .
+20%
73.7m
2017
88.7m
2022
8 / Our product s
8 / Investor Insights
$552m
2016
$2.23bn
2022
Growth of OTT revenues in Eastern Europe
@ D i g i t a l T V R e s e a r c h , 2 0 1 7 .
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.
2023
2017
$686.4m
$608.7m
Growth of pay TV
subscribers in APAC
@ D ig ita l T V R e se a r c h , 2 0 18 .
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.
The global pay TV market, one of the fastest growing
industries in the world, is on track to reach $254.77bn by 2025.
$552m
2016
$2.23bn
2022
Growth of OTT revenues in Eastern Europe
@ D i g i t a l T V R e s e a r c h , 2 0 1 7 .
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
2023
2017
$686.4m
$608.7m
Growth of pay TV
subscribers in APAC
@ D ig ita l T V R e se a r c h , 2 0 18 .
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
18
years ago
+60
projects
developed
57
clients served
globally
29
trusted
partnerships
MARKET LEADING PRODUCT
GLOBAL REACH
Cutting edge
technology
85%
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
MIRADA IN NUMBERS
Facts about our company:
ESTABLISHED
BUSINESS
UNRIVALLED
EXPERIENCE
EXCEPTIONAL
CLIENT LIST
EXTENSIVE PARTNER
NETWORK
Founded
18
years ago
+60
projects
developed
57
clients served
globally
29
trusted
partnerships
MARKET LEADING PRODUCT
GLOBAL REACH
Cutting edge
technology
85%
engineering
experts
Operating across
Asia, Europe and
the Americas
Over
10 000 000
people using our
technology
Review of the Year
Corporate Governance
Financial Statements
DIRECTORS‘ REPORT
HIGHLIGHTS OF THE YEAR
New contract wins
At the start of the current financial year, Mirada won two
platform and back-end application, Iris SDP across the
notable contracts in new territories for their end-to-end Iris
network, with a target of up to nearly one million devices.
multiscreen solution. The first was with ATNi, a US
Bolivia is the fastest-growing telecoms market in Latin
investment firm with operations
in several US and
America, and with Bolivia’s pay TV household penetration
Caribbean locations, for which Mirada has just announced
rate predicted to grow from 10.9% to 27.1% by 2018, this
the
first
commercial
deployment with
One
project will see Mirada entering a new and highly promising
Communications
in Bermuda. Mirada will shortly be
market in the upcoming months.
following up the initial release with advanced features
including start-over, personalised recommendations and
Both contracts are based on Mirada’s software as a service
Cloud DVR, in addition to the upcoming deployment with
model, structured so that the Company will receive various
Viya, an ATNi-owned operator in the US Virgin Islands.
long-term recurring revenue streams. In addition to initial
The second contract win was with Bolivian operator, Digital
from subscriber-based licence fees and the potential
TV Cable. The five year contract will see Mirada deploy its
ongoing deployment of new features and services.
set-up fees, Mirada will also receive monthly revenues
entire Iris multiscreen solution, including its over-the-top
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
Launch of Mirada Kids
Earlier this year, Mirada launched Mirada Kids, a brand new
OTT application for younger viewers to watch live and
on-demand content in a safe yet fun environment. Mirada
Kids is available on Android and iOS smartphones and
tablets, and comes with a simplified and appealing UI
designed specifically to charm and captivate the attention
of children.
The app includes key features such as advanced parental
controls, time limitation settings, custom profiles and the
possibility to offer carefully selected content suitable for
different ages, and offers operators a new and innovative
way to extend their service to satisfy their youngest
audience and in turn, their parents. Mirada Kids was
launched commercially for the first time across
izzi
Telecom’s service under the name izzi kids in November
Telecom. We offer our products worldwide and we benefit
want. We grow as they grow, reinforcing long term bonds,
2017.
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 I nsig hts
Hi ghlig hts of the Year / 11
DIRECTORS‘ REPORT
Update on izzi
Mirada’s project with izzi telecom has continued to grow over the fiscal year. In November 2017, Mirada launched their new
OTT application, Mirada Kids, for children across izzi’s service under the name izzi kids, to allow izzi’s younger viewers to
watch live and on-demand content on Android and iOS devices. At the start of the calendar year, izzi also extended their
offering to another tier of customers, which has contributed greatly towards the number of new installations. With relation to
this, on 22 March, Mirada achieved yet another milestone with izzi by surpassing 1 million set-top boxes installed across
Televisa networks. At the end of September 2018, the number of deployed set-top boxes had reached 1.5 million.
World Cup at izzi
Post year-end, following Mirada’s software adjustments, izzi Telecom extended access to their OTT application “izzi GO”
from just izzi subscribers to everyone in Mexico in a massive World Cup-driven marketing campaign. As a result of the
changes implemented by Mirada, izzi’s platform saw over 5 million sessions across 1.3 million devices, an impressive 97%
increase in live TV consumption via OTT and a 10% boost in TVoD purchases during the World Cup alone.
12 / Highlights of th e Ye ar
Update on izzi
CEO STATEMENT
JOSÉ LUIS VÁZQUEZ
Review of the Year
Corporate Governance
Financial Statements
Mirada’s project with izzi telecom has continued to grow over the fiscal year. In November 2017, Mirada launched their new
OTT application, Mirada Kids, for children across izzi’s service under the name izzi kids, to allow izzi’s younger viewers to
watch live and on-demand content on Android and iOS devices. At the start of the calendar year, izzi also extended their
offering to another tier of customers, which has contributed greatly towards the number of new installations. With relation to
this, on 22 March, Mirada achieved yet another milestone with izzi by surpassing 1 million set-top boxes installed across
Televisa networks. At the end of September 2018, the number of deployed set-top boxes had reached 1.5 million.
World Cup at izzi
The two major milestones for the
fiscal year were the contract wins
of ATNi and Digital TV Cable
Overview
Trading review
I am pleased to present the Group’s financial results for the
The two major milestones for the fiscal year under review
year ended 31 March 2018. During this period the Group
were the contract wins of ATNi and Digital TV Cable. Both
focused on achieving and delivering new contract wins,
customers joined our new SaaS business model, which
notably with ATNi in the United States and Digital TV Cable
allows them to benefit from our support and maintenance
Edmund S.R.L.
(“Digital TV Cable”)
in Bolivia, whilst
and product updates on a timely manner, paying a monthly
improving the market reach and ensuring a top-level
fee per subscriber with minimum guaranteed revenues.
service
to present customers. Mirada was able
to
Although the set-up fees in this model are smaller than in
implement the transition to the new Software as a Service
the previous one, the contract value is not eroded and
(SaaS) business model, securing
long-term recurrent
guarantees recurrent long-term licence fees, giving us
revenues from the new deals. As a result of our sales and
much better visibility on medium and long-term revenues.
marketing efforts, we increased our number of referrals,
SaaS agreements account for a continued growth of the
leveraging the excellent job our technical team performed
customer subscribers base, typically over three to five
at izzi Telecom. Also, and despite harsh conditions in the
years, with minimum guaranteed revenues aligned with
Mexican market due to the peso volatility after the US
this growth. Customers perceive that the model is aligned
Elections, we were able to reinforce our relationship with
with their business plans, increasing Mirada’s chance to
our largest customer (izzi Telecom). This, resulted in the
land new deals. Both technical deployments ran smoothly,
extension of the deployment of our technology over new
helping to improve Mirada’s efficiency as we accumulate
Post year-end, following Mirada’s software adjustments, izzi Telecom extended access to their OTT application “izzi GO”
customer segments and while improving the on-going
deployments of the Iris Inspire multiscreen product, and we
from just izzi subscribers to everyone in Mexico in a massive World Cup-driven marketing campaign. As a result of the
monthly licence-fee revenues for Mirada.
plan
to announce
the commercial
launch of both
changes implemented by Mirada, izzi’s platform saw over 5 million sessions across 1.3 million devices, an impressive 97%
increase in live TV consumption via OTT and a 10% boost in TVoD purchases during the World Cup alone.
customers within this fiscal year.
In the case of ATNi, we plan to announce the first
deployment very shortly, with others following over this
12 / Highlights of the Year
CEO Statement / 13
and the next fiscal year. Recurrent (monthly / quarterly)
Europe, where households with OTT services added to the
subscriber-based licence fees from both customers will
traditional Pay-TV subscription represent over 50% of the
start on the commercial deployments and ramp-up as
subscribers. Post year end, and using the FIFA World Cup
these customers grow.
Our largest reference, izzi Telecom (part of the Televisa
Group) continued to experience uncertainties resulting
from the election of Donald Trump as president of the
momentum, izzi decided to promote their OTT service for
users which have not currently installed Mirada’s product in
their households, and which still represent the vast majority
of their subscriber’s base.
izzi
is committed to the
promotion of Mirada’s OTT product over their platform, and
we expect this to be reflected positively in our OTT-related
revenues this year.
At 31 March 2018 izzi Telecom had over a million set-top
boxes
installed with our product,
in nearly five
hundred-thousand households. Currently izzi Telecom has
over 4 million subscribers, of which Mirada represented
roughly 13% of their base at fiscal year-end. At the present
date, izzi Telecom has 1.5 million set-top boxes installed
United States of America.
izzi Telecom drastically
with our technology.
decreased investments in foreign goods and services
denominated in US Dollars, which is our default trading
currency out of Europe. This had a short-term impact in the
professional services contracted by
izzi Telecom,
especially during the first half of the year. This situation
normalised after a few months, with higher confidence in
the market during the second half of 2017. Additionally,
post year end, in preparation for the FIFA World Cup there
was a peak in related required professional services from
izzi and other customers which will positively impact our
revenues for the fiscal year ended 31 March 2019.
izzi decided to
extend the
deployment of
Mirada’s solution
over a wider
segment of its
customer base
As a result of the continued relationship with izzi Telecom,
and the successful deployment of our Iris Inspire solution,
izzi decided to extend the deployment of the solution over
a wider segment of its customer base. Mirada’s product is
now being installed over the middle and premium tiers,
which has resulted in higher monthly installations and a
post-year end increase of more than $1.5m in licence-fee,
collections since April 2018. On the Over the Top (OTT)
licences, the penetration of this product in the market is
growing to ratios comparable to other regions like Western
14 / CEO Stateme nt
The pipeline continues to grow,
powered by the increasing
number of references and a
very solid product
The Group remains committed to its sales and marketing
efforts, and aims to close more deals in the present fiscal
year. The pipeline continues to grow, powered by the
increasing number of references and a very solid product,
and the fact that our main customers are intensively using
our technology at the forefront of their service delivery. The
fact that izzi Telecom decided to actively promote our OTT
product over their multi-million subscription base is a very
strong selling point that very few competitors can match.
Our cashless payment parking
(Mobile) division,
independent from our Digital TV division, continues to
deliver solid growth with a 20% increase in revenue,
generating profits before tax this year of $0.2m (2017:
$0.16m), contributing to 10.0% of total revenue in the
current year (2017: 8.6%).
In May 2018, post year-end, we suffered the tragic and sad
loss of Mr Javier Casanueva, who was a friend and a partner
for many years, and a cornerstone for the successful
deployment of Mirada. We will greatly miss him. Francis
Coles, a long-standing non-executive Director, took the
role of non-executive Chairman later in the month. We wish
him the best for the new position.
and the next fiscal year. Recurrent (monthly / quarterly)
Europe, where households with OTT services added to the
With a growing pipeline, more references and a solid
development
investment, related to Cloud and kids
subscriber-based licence fees from both customers will
traditional Pay-TV subscription represent over 50% of the
product that our customers are using more and more, we
functionalities. There is a tax credit recognised in the
start on the commercial deployments and ramp-up as
subscribers. Post year end, and using the FIFA World Cup
can only aim to continue deploying the business model
current period as a result of Mirada Iberia’s capitalisation of
these customers grow.
momentum, izzi decided to promote their OTT service for
and win more references. The business model is proving
research and innovation tax deductions.
users which have not currently installed Mirada’s product in
solid and with a higher percentage of revenues coming
their households, and which still represent the vast majority
from recurrent subscriber-based licence fees, we are
The Group reduced its net loss for the year to $4.87 million
of their subscriber’s base.
izzi
is committed to the
steadily reaching the point of profitability. We could not do
compared to a loss of $7.10 million in the prior year. This
promotion of Mirada’s OTT product over their platform, and
all this without the continued support of our stakeholders:
improvement resulted from a combination of the following
we expect this to be reflected positively in our OTT-related
employees, customers, suppliers, partners and investors, to
factors: the one-off goodwill impairment applied in the
revenues this year.
whom we are extremely grateful.
financial year ended in March 2017 and the different
Review of the Year
Corporate Governance
Financial Statements
United States of America.
izzi Telecom drastically
with our technology.
Our largest reference, izzi Telecom (part of the Televisa
Group) continued to experience uncertainties resulting
from the election of Donald Trump as president of the
decreased investments in foreign goods and services
denominated in US Dollars, which is our default trading
currency out of Europe. This had a short-term impact in the
professional services contracted by
izzi Telecom,
especially during the first half of the year. This situation
normalised after a few months, with higher confidence in
the market during the second half of 2017. Additionally,
post year end, in preparation for the FIFA World Cup there
was a peak in related required professional services from
izzi and other customers which will positively impact our
revenues for the fiscal year ended 31 March 2019.
izzi decided to
extend the
deployment of
Mirada’s solution
over a wider
segment of its
customer base
As a result of the continued relationship with izzi Telecom,
and the successful deployment of our Iris Inspire solution,
izzi decided to extend the deployment of the solution over
a wider segment of its customer base. Mirada’s product is
now being installed over the middle and premium tiers,
which has resulted in higher monthly installations and a
post-year end increase of more than $1.5m in licence-fee,
collections since April 2018. On the Over the Top (OTT)
licences, the penetration of this product in the market is
growing to ratios comparable to other regions like Western
At 31 March 2018 izzi Telecom had over a million set-top
boxes
installed with our product,
in nearly five
hundred-thousand households. Currently izzi Telecom has
over 4 million subscribers, of which Mirada represented
roughly 13% of their base at fiscal year-end. At the present
date, izzi Telecom has 1.5 million set-top boxes installed
The pipeline continues to grow,
powered by the increasing
number of references and a
very solid product
The Group remains committed to its sales and marketing
efforts, and aims to close more deals in the present fiscal
year. The pipeline continues to grow, powered by the
increasing number of references and a very solid product,
and the fact that our main customers are intensively using
our technology at the forefront of their service delivery. The
fact that izzi Telecom decided to actively promote our OTT
product over their multi-million subscription base is a very
strong selling point that very few competitors can match.
Our cashless payment parking
(Mobile) division,
independent from our Digital TV division, continues to
deliver solid growth with a 20% increase in revenue,
generating profits before tax this year of $0.2m (2017:
$0.16m), contributing to 10.0% of total revenue in the
current year (2017: 8.6%).
In May 2018, post year-end, we suffered the tragic and sad
loss of Mr Javier Casanueva, who was a friend and a partner
for many years, and a cornerstone for the successful
deployment of Mirada. We will greatly miss him. Francis
Coles, a long-standing non-executive Director, took the
role of non-executive Chairman later in the month. We wish
him the best for the new position.
Financial overview
Revenue grew to $8.82 million (2017: $8.49 million).
However, there was a decrease in revenues with izzi
Telecom (Televisa group) after the Peso devaluation in
December 2016 and izzi Telecom freeze of purchases in
USD. This was offset by the revaluation of USD vs EUR,
which has contributed to $0.63 million additional revenues.
Although gross profit grew to $7.94 million (2017: $7.88
million), there is a noted decrease in the gross margin
percentage of 3.6% due to the additional cost associated
with the increased number of sales representatives. Staff
costs have increased due to the strengthening of the sales
team and due to the contract wins under the Software as a
service business model (ATNi and Digital TV cable).
Operating loss decreased to £4.62 million (2017: £6.57
million). Adjusted EBITDA (as defined in Note 6) for the year
decreased to a loss of $1.12 million (2017: loss of $0.04
million) resulting mainly from the efforts to win and deploy
the new deals. Amortisation charges increased to $3.35
million from $2.72 million, due to increased product
revenue mix from increased licences this year.
Net Debt rose to $11.70 million (2017: $5.25 million) as a
result of increased product investment, lower than
expected Televisa revenue for the year, and the required
investment in the new contracts signed under the Software
as a Service
(“SaaS”) business model. Long
term
interest-bearing loans and borrowings decreased by 14% to
$2.48 million
(2017: $2.88 million) and short
term
borrowings increased to $11.16 million (2017: $2.66 million).
Trade receivables increased from $0.99 million to $1.38
million, due to a $0.66m invoice to izzi Telecom billed in
March 2018 and collected in April 2018.
The Company signed two debt facilities with related
parties, one of £1.7 million in November 2017 which was
converted post year end (August 29th, 2018) into equity,
and a £3.0 million facility which was agreed to be
capitalised alongside an additional capital injection of £3.0
million. These are subject to shareholder approval on
October 4th, 2018. Both facilities were provided by our
largest shareholders, showing their commitment to the
business model. We are confident that the reduction in Net
Debt will help in deploying new opportunities, both from
the additional available working capital and due to the
increased confidence of our Customers in our ability to
develop the contracts.
Other intangible assets have increased by $1.14m mainly
due to the increased valuation of the Euro against the US
Dollar.
Cash at bank increased to $1.94 million from $0.28 million,
mainly due to the £3.0 million facility received from
Kaptungs in March 2018. Additional invoice discounting
facilities of $1.34 million and unused short-term credit lines
of $0.37 million were available at the end of March 2018.
The Group used $1.7m of cash in operating activities in the
year (2017 – generated cash from operating activities of
$3.3m) and spent a further $3.9m (2017 - $3.5m) in investing
14 / CEO Statement
CEO Statement / 15
activities, primarily related to developing the Group’s
software platform. This was funded through the facilities
described above.
As set out in note 2 of the financial statements, given the
funding needs of the Group, a General meeting has been
called for October 4th, 2018, to approve a £3m cash
injection required for the Group to continue as a Going
Concern. See Note 2 for further details.
In this period, the Board decided to change the reporting
currency for this year due to the growing exposure to the
US Dollar, as all major contracts and most on the new
potential deals for the Company are denominated in this
currency. Coupled with the evolution of the business, the
Group’s shareholder base is now largely comprised of
foreign investors to whom financial reporting in GBP is of
limited relevance. Internally, the board also bases its
performance evaluation and the majority of investment
decisions on USD financial information. The exchange rate
fluctuation between GBP and USD from March 2017 to
March 2018, (1: 1.24775 to 1: 1.40795) has resulted in a
consequent currency translation gain of $1 million.
Current Trading and Outlook
Mirada participated in a significant number of potential
deals during the year and is seen as an increasingly
relevant supplier as new bids appearing in the market. I am
glad to say that we currently have a strong pipeline in terms
of the number of opportunities we are participating in. This
pipeline and an
increasing number of successful
references is helping us secure new opportunities and we
are confident of announcing new relevant contract wins in
the near future.
José Luis Vázquez
Chief Executive Officer
27th September 2018
16 / CEO Stateme nt
STRATEGIC REPORT
Business model
The Company’s main activity is the provision of software for
the Digital TV market. Our major customers are Digital TV
platforms, composed mainly of Pay TV service providers.
We provide the technology needed to facilitate the final
user’s interaction with the devices they provide, including
digital TV decoders (set-top boxes), tablets, smartphones,
computers and smart TVs. Our major products are our
navigational software proposition,
Iris,
including our
Inspire user interface, and X-player, our broadcasting
synchronisation technology.
Our customers need the services of a User Interface (“UI”)
provider such as Mirada when creating a new Digital TV
service or replacing/upgrading an existing one. The UI
provider interacts with the device vendor (in the case of set-
top boxes), the encryption technology vendor (Conditional
Access (“CA”) vendor) for the protection of content, and the
customer systems (billing and provisioning systems).
The Group tends to interact with the customer in the early
stages of their decision-making process and help in the
selection of the proper ecosystem. Our expertise is widely
recognised in the industry, and we provide a value that
goes beyond our actual UI proposition. Aside from the
professional services related to deployment, support and
maintenance, our licencing model varies depending on the
size of the customer, from one-off fees per household for
Review of the Year
Corporate Governance
Financial Statements
Reference deployments (defined as key deployments
used as a reference to attract potential customers) are very
important in this market, and winning reference contracts
has been and remains an integral part of our strategy.
The Group will need to continue investing in research and
development in order to provide the required functionalities
in our products to satisfy the cutting-edge demands from
our customers, while maintaining a fair balance between
potential growth and profitability. These include costs
incurred towards developing new functionality such as
an increased presence in the Cloud, enhanced search,
recommendation and personalisation
functionalities,
integration with more content providers, chipsets and
device manufacturers. Our continued
investment
in
Iris is essential in ensuring a proper implementation of
this strategy.
The main key performance indicator (“KPI”) used by
management in assessing the success of this strategy is
the growth in Mirada’s licence revenues, which will be led
by the progress of our recent rollouts and any potential
new licence-based contract wins. This license revenue has
increased in the current year from $1.11m to $2.58m, as a
result of the increased usage of our technology from our
main customer as noted in the CEO report.
Development, performance and
position of business
the product as it is, to recurrent revenues for a Software as
Development, performance and position of business
a Service (“SaaS”) model. The Group also provides cashless
have been discussed in the CEO report, with key items on
payment solutions to car park operators through a revenue-
page 13.
share agreement (Mobile segment). Revenue from this
segment is earned when services are provided. Managed
services such as quality assurance on functionality add-
ons to platforms are also provided to customers.
Principal risks and uncertainties
The key business risks affecting the Group are set out
Strategy
below.
Dependence on people
The Group’s strategy is to extend its presence in the Digital
TV markets, focusing on those markets with higher potential
growth rates, for example the Latin American, Eastern
Europe and South East Asia market. The aim is to increase
the number of customers being charged subscriber-
based licence fees, as these revenues command higher
margins and grow, as long as the customer’s subscriber
base keeps growing, Mirada will continue to earn licence
fees even from projects which were completed several
years previously.
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. Rotation of key management, considered to be the
main measure of risk, is very low as there have been no
changes in the key executive management team in the last
five years, except for a change in the Finance Director in
November 2015.
16 / CEO Statement
St rategi c Report / 17
Digital TV and Broadcast markets
Liquidity Risk
The sectors in which the Group operates may undergo
Liquidity risk is managed through the assessment of short,
rapid and unexpected changes. It is possible, therefore, that
medium and long term cashflow forecasts to ensure the
competitors will develop products that are similar to those
adequacy of funding in order to meet the Group’s working
of the Group, or its technology may become obsolete or
capital requirements. Cash and cash flow forecasts are
less effective. The Group’s success depends upon its ability
regularly reviewed by the Executive Directors and the
to enhance its products and technologies and develop and
Group constantly monitors these to ensure, among other
introduce new products and features that meet changing
scenarios, that the Group meets its liabilities as they fall
customer requirements and incorporate technological
due. Where a shortfall in funding is identified the Company
advances on a timely and cost-effective basis. As a result,
will look to meet this shortfall through a variety of funding
the Group continues to invest significantly in research
option including but not limited to the issuing of new equity.
and development.
Information technology
This area is considered further in the report of the directors
and the accounting policies under ‘Going concern’.
Data security, loss or corruption of data, and business
continuity pose inherent risks for the Group leading to a
Approval
loss of customer confidence in the Group being able to
This strategic report was approved on behalf of the Board
on 27th September 2018 and signed on its behalf.
José Luis Vázquez
Chief Executive Officer
27 September 2018
deliver their requirements. To mitigate this risk, the Group
invests in, and keeps under review, formal data security
and business continuity policies. The Group maintain both
local and cloud-based back ups and regularly review plans
on how to improve data management.
Intellectual property
There are certain markets in which there could be instances
of disputes regarding
intellectual property
involving
technology companies, including the Digital TV market.
Although no such disputes have been raised within the
Group, we recognise the associated risk as key. 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 Report
DIRECTORS’ REPORT
Review of the Year
Corporate Governance
Financial Statements
Review of business and future developments
In such circumstances, the group would be obliged to seek
Reviews of the business, its results, future direction and key
performance indicators are included in the Chief Executive
Officer’s Report and Strategic Report on pages 13 to 18.
additional funding though a placement of shares, or source
other funding. The directors have had a history of raising
financing from similar transactions.
Dividends
No dividend is declared in respect of the year (2017: $nil).
Reporting currency
In order to obtain the necessary funding required, as
announced in the Circular on September 17, 2018, the
Company will be holding a General Meeting on October 4,
2018. In that General Meeting, it will be proposed to
increase the ordinary share capital by £6.0 million, of
In this period, the Board decided to change the reporting
which £3.0 million of the consideration will be received in
currency for this year due to the growing exposure to
cash. A further £3.0 million will be satisfied by discharging
the US Dollar, as all major contracts and most on the
Mirada Plc from its liability to pay Kaptungs £3.0 million in
new potential deals for the Company are denominated in
accordance with the terms of a Facility Letter signed in
this currency.
March 2018, in consideration for the Company treating such
discharged amount as payment in full for the subscription
Financial risk management objectives and policies
of 300,000,000 ordinary shares of 1p each in the capital of
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.
Going concern
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, are set
out in its 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.
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 high volume and low value in
nature are factors which constrain the ability to accurately
predict revenue performance. Furthermore, investment in
winning customers, via market expenditure, and servicing
and delivering to new customers remains an 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.
the Company at a subscription price of 1p per new ordinary
share, each credited as fully paid up.
On September 14, 2018, Kaptungs signed an irrevocable
voting undertaking referring
October 4, 2018, General Meeting.
the resolutions of
the
On September 21, 2018, Kaptungs provided the Registrar of
the Company with their Proxy voting in favour of both the
resolutions for approval at the General Meeting. As per the
Circular, Kaptungs has 60.82% of the voting rights of the
Company.
On September 27, 2018, the directors received confirmation
from Kaptungs that £3.0 million in cash will be transferred
to received by Mirada Plc from Kaptungs on 28 September,
2018, for the subscription of 300 million new Ordinary
Shares at 1p per share to be issued, as referred to above,
on approval of the resolutions at the General Meeting to
be held on October 4, 2018. The money received was
requested to be paid before the General Meeting on
October 4, 2018, by the Nominated Advisor (Allenby
Capital) as it relates to the subscription of shares. The issue
of ordinary shares and the discharging of the loan facility
are conditional, inter alia, on the passing of the resolutions
at the General Meeting and Admission becoming effective.
Application will be made for the Subscription Shares and
the Loan Capitalisation Shares to be admitted to trading
on AIM, conditional on the resolutions being passed. It is
expected that if the resolutions are passed, Admission will
occur at 8.00 a.m. on 5 October 2018.
18 / Strategic R eport
Dir ectors‹ Report / 19
The directors remark that Kaptungs is a strong supporter
Events since the reporting date
of the Company after injecting $10m in cash between
November 2017 and September 2018. However, the risk that
both resolutions are not passed at the General Meeting on
October 4, 2018, represents a material uncertainty, which
may cast a doubt about the Company and Group’s ability
to continue as a going concern. Whilst recognising this
uncertainty, on the basis of the Proxy votes received to date,
and the strong support from Kaptungs, the directors believe
that the resolutions will be passed at the General Meeting
on October 4, 2018, and the company and group will be able
to continue as a going concern. On this basis, these financial
statements have been prepared on a going concern basis.
Directors’ and officers’ indemnity insurance
The Group has taken out an insurance policy to indemnify
the directors and officers of the company and its subsidiaries
in respect of certain liabilities which may attach to them in
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.
Research and Development activities
On August 29th, 2018 the General Meeting approved the
conversion into shares of the £1.7m loan facility announced
on Nov 28th, 2017
In the General Meeting to be held on October 4th, 2018,
it will be proposed to increase capital by £6.0 million, with
£3.0 million in cash and with £3.0 million by discharging
Mirada Plc from its liability to pay to Kaptungs £3.0 million
in accordance with the terms of a Facility Letter signed in
March 2018, in consideration for the Borrower treating such
discharged amount as payment in full for the subscription
of 300,000,000 ordinary shares of 1p each in the capital of
the Borrower at a subscription price of 1p per new ordinary
share, each credited as fully paid up of an additional
£3.0 million.
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;
The Group continues
its development program of
and
software for the Digital TV market including the research
and development of new products and enhancements to
existing products. The Directors consider the investment
in research and development to be fundamental to the
success of the business in the future.
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.
Corporate Governance
This confirmation is given and should be interpreted in
accordance with the provisions of s418 of the Companies
The Board has decided to update its current Corporate
Governance code and use the QCA Corporate Governance
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
27 September 2018
Code from September 28, 2018.
Directors
The directors who held office during the year are given
below:
Executive directors
Mr José Luis Vázquez
Chief Executive Officer
Mr José Gozalbo
Mr Gonzalo Babío
Non-executive directors
Mr Javier Casanueva
Mr Francis Coles
Mr Matthew Earl
20 / Directors‹ Re port
Non- Executive Chairman
(passed away on May 12th, 2018)
New Chairman from May 17th,
2018
DIRECTORS‘ REMUNERATION REPORT
Review of the Year
Corporate Governance
Financial Statements
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 2018.
Executive
José-Luis Vázquez
Jose Gozalbo
Gonzalo Babío
Non-executive
Javier Casanueva
Matthew Earl
Francis Coles
Salary &
fees
$000
Benefits
$000
Share-based
payment
$000
266
204
169
42
42
42
765
3
8
6
—
—
—
17
10
14
—
4
—
3
31
2018
Total
$000
279
226
175
46
42
45
813
2017
Total
$000
302
230
175
46
42
45
840
The directors’ participation in the company’s share option plan is detailed in Note 23 and, as confirmed on Note 7, there were
no contributions paid into a pension scheme for any director.
Javier Casanueva sadly passed away on May 12th, 2018. Francis Coles, a long-standing non-executive Director, took the role
of non-executive Chairman on May 17th, 2018
Dir ec tors’ Remuneratio n Report / 21
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
In preparing these financial statements, the directors are
of the directors. The directors’ responsibility also extends
required to:
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.
22 / Statement of Dire ctors‘ R e s p on s i b i l i t i e s
INDEPENDENT AUDITOR‘S REPORT TO THE MEMBERS OF MIRADA PLC
Review of the Year
Corporate Governance
Financial Statements
Opinion
Material uncertainty related to going concern
We have audited the financial statements of Mirada Plc
We draw attention to note 2 to the financial statements
(the ‘parent company’) and its subsidiaries (the ‘group’)
concerning the parent company and group’s ability to
for the year ended 31 March 2018 which comprise the
continue as a going concern. As discussed in note 2, the
consolidated statement of comprehensive income, the
group’s available working capital may prove insufficient
consolidated and company statements of changes in
to cover both operating activities and the repayment of
equity, the consolidated and company statements of
its debt facilities and the directors are planning to raise
financial position, the consolidated and company cashflow
additional funding that is subject to shareholder approval.
statements and notes to the financial statements, including
a summary of significant accounting policies.
In order to obtain the necessary funding required, as
announced in the Circular on September 17, 2018, the
The financial reporting framework that has been applied in
Company will be holding a General Meeting on October
the preparation of the financial statements is applicable law
4, 2018. In that General Meeting, it will be proposed to
and International Financial Reporting Standards (IFRSs) as
increase the ordinary share capital by £6.0 million, of
adopted by the European Union and, as regards the parent
which £3.0 million of the consideration will be received in
company financial statements, as applied in accordance
cash. A further £3.0 million will be satisfied by discharging
with the provisions of the Companies Act 2006.
Mirada Plc from its liability to pay Kaptungs £3.0 million in
In our opinion:
accordance with the terms of a Facility Letter signed in
March 2018, in consideration for the Company treating such
discharged amount as payment in full for the subscription
•
the financial statements give a true and fair view of the
of 300,000,000 ordinary shares of 1p each in the capital of
state of the group’s and of the parent company’s affairs
the Company at a subscription price of 1p per new ordinary
as at 31 March 2018 and of the group’s loss for the year
share, each credited as fully paid up.
then ended;
•
the group financial statements have been properly
the Registrar of the Company with their Proxy voting in
prepared in accordance with IFRSs as adopted by the
favour of both the resolutions for approval at the General
As set out in note 2, a significant shareholder has provided
European Union;
•
the parent company financial statements have been
properly prepared in accordance with IFRSs as adopted
by the European Union and as applied in accordance
with the provisions of the Companies Act 2006; and
•
the financial statements have been prepared
in
accordance with the requirements of the Companies
Act 2006.
Basis for opinion
We conducted our audit in accordance with International
Standards on Auditing (UK) (ISAs (UK)) and applicable law.
Our responsibilities under those standards are further
described in the Auditor’s responsibilities for the audit
of the financial statements section of our report. We are
independent of the group and the parent company in
accordance with the ethical requirements that are relevant
to our audit of the financial statements in the UK, including
the FRC’s Ethical Standard as applied to listed entities,
and we have fulfilled our other ethical responsibilities in
accordance with these requirements. We believe that
the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our opinion.
Meeting. In addition, on 27 September, 2018, the directors
received confirmation from Kaptungs that £3.0 million in
cash will be transferred to received by Mirada Plc from
Kaptungs on 28 September, 2018, for the subscription
of 300 million new Ordinary Shares at 1p per share to be
issued, as referred to above, on approval of the resolutions
at the General Meeting to be held on October 4, 2018.
As stated in note 2, these matters indicate the existence
of a material uncertainty which may cast significant doubt
about the Company and Group’s ability to continue as a
going concern. The financial statements do not include the
adjustments that would result if the Company and Group
were unable to continue as a going concern. Our opinion is
not modified in respect of this matter.
The calculations supporting the going concern assessment
require management to make highly subjective judgements.
We have therefore spent significant audit effort in assessing
the appropriateness of the assumptions involved, and as
such this has been identified as a Key Audit Matter.
Independent Au di tors‘ Report / 23
INDEPENDENT AUDITOR‘S REPORT TO THE MEMBERS OF MIRADA PLC
continued
Our audit procedures included the following:
Key audit matters
•
Review of the group’s cash flow forecast and other
projections through to 31 March 2020,
including
assessing and challenging assumptions used and
performing sensitivity analysis.
•
Reviewing the terms of the group’s proposed re-
financing, specifically the 3 million proposed issue of
share capital for cash, which as at the time of signing
these accounts is subject to final shareholder approval
at the General Meeting on October 4th, 2018.
In addition to the matter described in the material uncertainty
related to going concern section, key audit matters are
those matters that, in our professional judgment, were of
most significance in our audit of the financial statements
of the current period and include the most significant
assessed risks of material misstatement (whether or not
due to fraud) we identified, including those which had the
greatest effect on: the overall audit strategy, the allocation
of resources in the audit; and directing the efforts of the
engagement team. These matters were addressed in the
context of our audit of the financial statements as a whole,
and in forming our opinion thereon, and we do not provide
•
Reviewing the disclosures in the financial statements.
a separate opinion on these matters.
Matter
How we addressed the matter in our audit
Goodwill and Intangible asset impairment assessment
Refer to note 12 and note 2.
Determining if an impairment charge is required for Goodwill
and Intangible assets involves significant judgements about
We checked and confirmed the allocation of Cash
Generating Units to segments was consistent with internal
management reporting and the prior year.
the future results and cash flows of the business, including
We considered:
forecast growth in future revenues and operating profit
margins, as well as determining an appropriate discount
factor and long term growth rate.
•
directors key assumptions including revenue growth
rates used in the cash flow forecasts by comparing
them to historical results and economic and industry
We therefore focused on this area and the judgements
forecasts;
applied to future forecasts.
•
the discount rate by assessing the cost of capital for the
Group and comparable organisations; and
•
the long term growth rate by comparing management’s
rate to forecast long term GDP growth and inflation in
the various regions and industry growth reports and
then sensitising management’s Value in Use model for
the difference in this rate.
Capitalised development costs
As described in note 2, the group capitalises costs incurred
Our procedures
included considering whether
the
on product development relating to the design and
development costs capitalised met
the criteria
for
development of new or enhanced products.
capitalisation under IAS 38.
Recognition of
internally developed
intangible assets
Our audit procedures involved:
was considered to be a key audit matter, given the
•
Ensuring consistency in the capitalisation criteria from
involvement of significant judgement, including assessing
prior years.
the technological and commercial feasibility of the projects.
•
Reviewing a sample of project summary reports for
ongoing and completed projects during the year for
which costs were capitalised to confirm that costs
incurred are development in nature and not research
costs.
•
For a sample of capitalised payroll costs, obtained
and reviewed employment contracts and timecards
to confirm that salary costs capitalised relates to
development related activity and therefore appropriately
capitalised.
24 / Indepe nde nt Audi to rs‘ Re p or t
INDEPENDENT AUDITOR‘S REPORT TO THE MEMBERS OF MIRADA PLC
continued
Review of the Year
Corporate Governance
Financial Statements
Matter
Revenue recognition
How we addressed the matter in our audit
The group’s revenue recognition policy can be found in
We performed testing including:
note 2 to the financial statements.
We consider a significant risk of material misstatement
to arise from the incentive to overstate revenue for the
current period due to a lack of revenue growth from the
prior period; and the loss generated in the current period.
Further, since growth in license revenue is management’s
main key performance indicator (“KPI”) this increases the
incentive to overstate revenue.
Therefore, the key audit matter is the existence of revenue
throughout the financial year.
•
Testing a sample of transactions from the revenue
listing by obtaining the contracts, invoices raised and
agreeing to cash received.
•
Where cash had not been received, the
invoice
details were agreed to contract, purchase orders
received from customers, or correspondence with
project management to ensure risks and rewards have
transferred appropriately.
•
Reviewed a sample of sales invoices raised before
and after year end to ensure that accounted for in the
correct period and accrued for appropriately. A sample
of accrued revenue balances as at year end has also
been agreed to post year end invoices issued up to
31 July 2018.
Our application of materiality
We apply the concept of materiality in performing our audit and evaluating the effect of misstatements. We consider
materiality to be the magnitude by which misstatements, including omissions, could influence the economic decisions of
reasonable users that are taken on the basis of the financial statements.
In order to reduce to an appropriately low level the probability that any misstatements exceed materiality, we use a lower
materiality, performance materiality, to determine the extent of testing needed. Importantly, misstatements below these
levels will not necessarily be evaluated as immaterial as we also take account of the nature of identified misstatements,
and the particular circumstances of their occurrence, when evaluating their effect on the financial statements as a whole.
We agreed with the audit committee that we would report to the committee all individual audit differences identified during
the course of our audit in excess of £7,000 (2017: £5,000). We also agreed to report differences below these thresholds that,
in our view, warranted reporting on qualitative grounds.
Group Overall materiality
£132,000 (2017: £95,000)
Group Performance materiality (75% of Overall materiality)
£99,000 (2017: £71,000)
Basis for determining (Group and Parent)
1.5% of group revenue (2017: 1.5% of group revenue)
Rationale for benchmark applied (Group and Parent)
Revenue provides a consistent year on year basis for
determining materiality and as a significant driver of
profit, revenue growth impacts the achievement of key
Parent company Overall materiality
Parent company Performance Materiality
performance indicators.
£99,000 (2017: £71,000)
£74,000 (2017: £53,000)
Independent Au di tors‘ Report / 25
INDEPENDENT AUDITOR‘S REPORT TO THE MEMBERS OF MIRADA PLC
continued
Component materiality
Each significant component of the group was audited to a lower level of materiality which is used to determine the financial
statement areas that are included within the scope of our audit and the extent of sample sizes used during the audit.
We determined component materiality as follows:
Range of component materiality
8% to 75% of group materiality
An overview of the scope of our audit
Our group audit was scoped by obtaining an understanding
of the group and its environment, including the group’s
system of internal control, and assessing the risks of
material misstatement in the financial statements at the
group level.
statements does not cover the other information and, except
to the extent otherwise explicitly stated in our report, we do
not express any form of assurance conclusion thereon.
In connection with our audit of the financial statements, our
responsibility is to read the other information and, in doing
so, consider whether the other information is materially
In determining the scope of our audit we considered
inconsistent with the financial statements or our knowledge
the level of work to be performed at each component in
obtained in the audit or otherwise appears to be materially
order to ensure sufficient assurance was gained to allow
us to express an opinion on the financial statements of
misstated. If we identify such material inconsistencies
or apparent material misstatements, we are required to
the Group as a whole. We tailored the extent of the work
determine whether there is a material misstatement in the
to be performed at each component, either by us, as the
financial statements or a material misstatement of the other
group audit team or component auditors within the BDO
information. If, based on the work we have performed, we
International network, based on our assessment of the
conclude that there is a material misstatement of this other
risk of material misstatement at each component. We
information, we are required to report that fact. We have
identified four centrally controlled components, one of
nothing to report in this regard.
which is based in Madrid, Spain, as significant, and have
audited these for group reporting purposes. All of the
Opinions on other matters prescribed by the
audit work was undertaken by BDO LLP and BDO Madrid
(Component auditor). Detailed instructions were issued and
discussed with the component auditor, and these covered
the significant risks to be addressed.
Companies Act 2006
In our opinion, based on the work undertaken in the course
of the audit:
The Group audit team was actively involved in directing the
audit strategy of the component audit, reviewed in detail
the findings and considered the impact of these upon the
Group audit opinion.
•
the information given in the strategic report and the
directors’ report for the financial year for which the
financial statements are prepared is consistent with the
financial statements; and
For one of the components not considered significant,
we performed analytical review procedures together with
•
the strategic report and the directors’ report have
been prepared in accordance with applicable legal
substantive testing on group audit risk areas applicable
requirements.
to that component based on its relative size, risks in the
business and our knowledge of the entity appropriate
Matters on which we are required to report by
to respond to the risk of material misstatement. Review
exception
procedures were performed by the group audit team on
the remaining one reporting component not considered
significant to the group.
Other information
The directors are responsible for the other information. The
other information comprises the information included in
the annual report, other than the financial statements and
our auditor’s report thereon. Our opinion on the financial
26 / Indepe nde nt Audi tors‘ Re p or t
In the light of the knowledge and understanding of the
group and the parent company and its environment
obtained in the course of the audit, we have not identified
material misstatements in the strategic report or the
directors’ report.
We have nothing to report in respect of the following
matters in relation to which the Companies Act 2006
requires us to report to you if, in our opinion:
INDEPENDENT AUDITOR‘S REPORT TO THE MEMBERS OF MIRADA PLC
continued
Review of the Year
Corporate Governance
Financial Statements
•
adequate accounting records have not been kept by
Misstatements can arise from fraud or error and are
the parent company, or returns adequate for our audit
considered material if, individually or in the aggregate, they
have not been received from branches not visited by
could reasonably be expected to influence the economic
us; or
decisions of users taken on the basis of these financial
•
the parent company financial statements are not in
statements.
agreement with the accounting records and returns; or
A further description of our responsibilities for the audit
of the financial statements is located on the Financial
•
certain disclosures of directors’ remuneration specified
Reporting Council’s website
at: www.frc.org.uk/
by law are not made; or
auditorsresponsibilities. This description forms part of our
•
we have not
received all
the
information and
explanations we require for our audit.
Use of our report
auditor’s report.
Responsibilities of directors
This report is made solely to the company’s members,
as a body, in accordance with Chapter 3 of Part 16 of the
As explained more fully in the directors’ responsibilities
Companies Act 2006. Our audit work has been undertaken
statement set out on page 22, the directors are responsible
so that we might state to the company’s members those
for the preparation of the financial statements and for being
satisfied that they give a true and fair view, and for such
matters we are required to state to them in an auditor’s report
and for no other purpose. To the fullest extent permitted by
internal control as the directors determine is necessary to
law, we do not accept or assume responsibility to anyone
enable the preparation of financial statements that are free
other than the company and the company’s members as a
from material misstatement, whether due to fraud or error.
body, for our audit work, for this report, or for the opinions
we have formed.
In preparing the financial statements, the directors are
responsible for assessing the group’s and the parent
company’s ability to continue as a going concern, disclosing,
David Butcher (senior statutory auditor)
For and on behalf of BDO LLP, statutory auditor
as applicable, matters related to going concern and using
London
the going concern basis of accounting unless the directors
either intend to liquidate the group or the parent company
or to cease operations, or have no realistic alternative but
United Kingdom
27 September 2018
to do so.
BDO LLP is a limited liability partnership registered in England
and Wales (with registered number OC305127).
Auditor’s responsibilities for the audit of the
financial statements
Our objectives are to obtain reasonable assurance about
whether the financial statements as a whole are free from
material misstatement, whether due to fraud or error,
and to issue an auditor’s report that includes our opinion.
Reasonable assurance is a high level of assurance, but is
not a guarantee that an audit conducted in accordance
with ISAs (UK) will always detect a material misstatement
when it exists.
Independent Au di tors‘ Report / 27
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
At 31 March 2018
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 year
Currency translation differences
Total comprehensive loss for the period
Notes
5
13
12
23
7
12
6
8
9
10
2018
$000
8,816
(874)
7,942
(73)
(3,352)
(72)
(5,599)
—
(3,464)
(12,560)
(4,618)
84
(634)
(5,168)
298
(4,870)
999
(3,871)
2017
(Restated)
$000
8,489
(614)
7,875
(46)
(2,718)
(69)
(4,802)
(3,744)
(3,070)
(14,449)
(6,574)
3
(423)
(6,994)
(103)
(7,097)
(763)
(7,860)
Loss per share
Loss per share for the year
– basic & diluted
The notes on pages 35 to 63 form part of these financial statements
Notes
Year ended
31 March 2018
$000
Year ended
31 March 2017
(Restated)
$000
11
(0.035)
(0.051)
28 / Consolidated State ment of Co m p r e h e n s i v e I n co me
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
At 31 March 2018
Review of the Year
Corporate Governance
Financial Statements
Notes
12
12
13
15
15
25
17
17
16
16
18
21
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
Related parties loans and interests
Trade and other payables
Deferred income
Current liabilities
Net current liabilities
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 loss
Equity
2018
$000
6,492
7,072
247
—
308
2017
(Restated)
$000
5,643
5,936
141
—
635
2016
(Restated)
$000
10,111
5,580
135
568
274
14,119
12,355
16,668
4,484
1,937
6,421
20,540
(4,246)
(6,917)
(2,320)
(1,360)
(14,843)
(8,422)
5,697
(2,477)
—
(2,477)
(17,320)
3,220
2,261
15,760
15,985
3,214
277
3,491
15,846
(2,655)
—
(1,384)
(1,844)
(5,883)
(2,392)
9,963
(2,875)
—
(2,875)
(8,758)
7,088
2,261
15,760
14,997
5,418
1,025
6,443
23,111
(3,471)
—
(1,867)
(326)
(5,664)
779
17,447
(2,542)
(26)
(2,568)
(8,232)
14,879
2,261
15,760
15,753
(30,786)
(25,930)
(18,895)
3,220
7,088
14,879
These financial statements were approved and authorised for issue on September 27th 2018
Signed on behalf of the Board of Directors
José Luis Vázquez
Chief Executive Officer
The notes on pages 35 to 63 form part of these financial statements
Consoli dated Statem ent of F inanc ial Position / 29
COMPANY STATEMENT OF FINANCIAL POSITION
At 31 March 2018
Intangible assets
Investments
Non-current assets
Trade and other receivables
Cash and cash equivalents
Current assets
Total assets
Loans and borrowings
Related parties loans
Trade and other payables
Current liabilities
Net current liabilities
Total assets less 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
14
15
17
17
16
21
2018
$000
—
11,814
11,814
617
101
718
12,532
(277)
(6,917)
(6,346)
(13,540)
(12,822)
(1,008)
(13,540)
(1,008)
2,261
15,760
(1,609)
(17,420)
(1,008)
2017
(Restated)
$000
—
4,994
4,994
208
9
217
5,211
(392)
—
(4,494)
(4,886)
(4,669)
325
(4,886)
325
2,261
15,760
(1,684)
(16,012)
325
2016
(Restated)
$000
2
16,432
16,434
385
66
451
16,885
(401)
—
(760)
(1,161)
(710)
15,724
(1,161)
15,724
2,261
15,760
492
(2,789)
15,724
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 $1,411,689 (2017 – loss of $13,291,900).
These financial statements were approved and authorised for issue on 27th September 2018
Signed on behalf of the Board of Directors
José Luis Vázquez
Chief Executive Officer
The notes on pages 35 to 63 form part of these financial statements
Company number 3609752
30 / Company Statement of F i n a n c i al Pos i ti o n
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the year ended 31 March 2018
Review of the Year
Corporate Governance
Financial Statements
Share
capital
$000
Share
premium
$000
Foreign
exchange
reserve
$000
Merger
reserves
$000
Accumulated
losses
$000
Total
$000
Balance at 1 April 2017 (Restated)
2,261
15,760
10,134
4,863
(25,930)
7,088
Loss for the year
Other comprehensive income
Movement in foreign exchange
—
—
—
—
—
988
—
—
(4,870)
(4,870)
11
999
Total comprehensive loss for the year
2,261
15,760
11,122
4,863
(30,789)
3,217
Transactions with owners
Share-based payment
Balance at 31 Mar 2018
—
—
—
—
3
3
2,261
15,760
11,122
4,863
(30,786)
3,220
Share
capital
$000
Share
premium
$000
Foreign
exchange
reserve
$000
Merger
reserves
$000
Accumulated
losses
$000
Total
$000
Balance at 1 April 2016 (Restated)
2,261
15,760
10,890
4,863
(18,895)
14,879
Loss for the year
Other comprehensive income
Movement in foreign exchange
—
—
—
—
—
(756)
—
—
(7,097)
(7,097)
(7)
(763)
Total comprehensive loss for the year
2,261
15,760
10,134
4,863
(25,999)
7,019
Transactions with owners
Share-based payment
—
—
—
—
69
69
Balance at 31 March 2017 (Restated)
2,261
15,760
10,134
4,863
(25,930)
7,088
The notes on pages 35 to 63 form part of these financial statements
Consolid ate d Statem ent of Ch a nges In Equity / 31
COMPANY STATEMENT OF CHANGES IN EQUITY
For the year ended 31 March 2018
Balance at 1 April 2017 (Restated)
Loss for the year
Other comprehensive income
Movement in foreign exchange reserve
Total comprehensive loss for the year
Transactions with owners
Share-based payment
Balance at 31 March 2018
Balance at 1 April 2016 (Restated)
Loss for the year
Other comprehensive income
Movement in foreign exchange reserve
Share
capital
$000
2,261
—
—
Share
premium
$000
15,760
—
—
Foreign
exchange
reserves
$000
Accumulated
losses
$000
(1,684)
(16,012)
Total
$000
325
—
75
(1,411)
(1,411)
—
75
2,261
15,760
(1,609)
(17,423)
(1,011)
—
—
—
3
3
2,261
15,760
(1,609)
(17,420)
(1,008)
Share
capital
$000
2,261
—
—
Share
premium
$000
15,760
—
—
Foreign
exchange
reserves
$000
492
—
Accumulated
losses
$000
Total
$000
(2,789)
15,724
(13,292)
(13,292)
(2,176)
—
(2,176)
Total comprehensive loss for the year
2,261
15,760
(1,684)
(16,081)
256
Transactions with owners
Share-based payment
—
—
—
69
Balance at 31 March 2017 (Restated)
2,261
15,760
(1,684)
(16,012)
69
325
The notes on pages 35 to 63 form part of these financial statements
32 / Company Statement of Ch a n ges In E qu ity
CONSOLIDATED STATEMENT OF CASH FLOWS
For the year ended 31 March 2018
Review of the Year
Corporate Governance
Financial Statements
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
Finance income
Finance expense
Taxation
Operating cash flows before movements in working capital
(Increase)/Decrease in trade and other receivables
Increase in trade and other payables
Taxation 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
Loans received
Related parties loans received
Repayment of loans
Net cash from financing activities
Net 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 35 to 63 form part of these financial statements
Notes
2018
$000
2017
(Restated)
$000
(4,870)
(7,097)
13
12
12
13
12
25
25
73
3,352
—
72
(84)
634
(298)
(1,121)
(1,608)
453
540
(1,736)
84
(161)
(3,780)
(3,857)
(634)
3,020
6,588
(1,827)
7,147
1,554
277
106
1,937
46
2,718
3,744
69
(3)
423
103
3
2,251
1,008
33
3,294
3
(59)
(3,438)
(3,494)
(423)
2,691
—
(2,821)
(553)
(753)
1,025
5
277
Consolid ate d Statem ent of C ash Flows / 33
COMPANY STATEMENT OF CASH FLOWS
For the year ended 31 March 2018
Cash flows from operating activities
Loss after tax
Adjustments for:
Amortisation of intangible assets
Share-based payment charge
Investment impairment 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
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
Related parties loans received
Repayment of loans
Net cash from financing activities
Net (decrease)/increase in cash and cash equivalents
Cash and cash equivalents at the beginning of the year
Exchange losses on cash and cash equivalents
Cash and cash equivalents at the end of the year
The notes on pages 35 to 63 form part of these financial statements
2018
$000
2017
(Restated)
$000
(1,412)
(13,292)
—
72
—
(24)
484
(880)
(409)
(2,770)
(4,059)
24
(1,541)
(1,517)
(484)
6,588
(115)
5,989
413
9
(322)
100
2
69
12,337
(18)
34
(868)
177
3,734
3,043
18
(3,222)
(3,204)
(34)
—
(9)
(43)
(204)
66
147
9
34 / Company Statement of Cas h F lows
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Year ended 31 March 2018
Review of the Year
Corporate Governance
Financial Statements
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.
2. Significant accounting policies
Basis of accounting
will therefore be unaffected by the change, albeit that the
effects of such exposures will be presented in USD.
To assist
investors
in understanding the change
in
accounting policy, restated statements of financial position
have been presented, providing restated USD financial
information for the financial years ended 31 March 2017 and
2016. The six-month interim periods ended 30 September
2017 and 2016 were also presented in USD and are available
online, as announced on December 20th, 2017.
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
to companies preparing their accounts under IFRSs.
A change in reporting currency represents a change in an
accounting policy in terms of IAS 8 Accounting Policies,
Changes in Accounting Estimates and Errors requiring the
restatement of comparative information. In accordance
with IAS 21 The Effects of Changes in Foreign Exchange
Rates, the following methodology was followed in restating
historical financial information from GBP into USD:
Reporting currency
•
Non-USD assets and liabilities were translated at
In this period, the Board decided to change the reporting
the relevant closing exchange rate at the end of the
currency due to the growing exposure to the US Dollar, as
reporting period. Non-USD
items of
income and
all major contracts and most on the new potential deals for
expenditure and cash flows were translated at average
the Company are denominated in this currency. The board
exchange rates for the reporting period disclosed;
therefore believes that USD financial reporting provides
more relevant presentation of the group’s financial position,
• Share capital, premium and other
reserves, as
funding and treasury functions, financial performance and
appropriate, were translated at the historic rates
its cash flows. Coupled with the evolution of the business,
prevailing at the dates of underlying transactions; and
the group’s shareholder base is now largely comprised
of foreign investors to whom financial reporting in GBP is
of limited relevance. Internally, the board also bases its
• The effects of translating the group’s financial results
and financial position into USD were recognised in the
performance evaluation and many investment decisions
foreign currency translation reserve.
on USD financial information.
It should be noted that the functional currencies of the
of its major functional currencies relative to US dollar
group’s underlying businesses – functional currencies
as an approximation for these rates for reference in the
referring to the currencies of the primary economic
following table. The closing exchange rates of the group’s
environments in which underlying businesses operate –
major trading currencies relative to US dollar, used when
remain unchanged and that foreign exchange exposures
translating the statements of financial position presented
The Group has provided the average exchange rates
in this release into US dollar, are also detailed in this table.
31 March 2016
31 March 2017
31 March 2018
Average
rate
—
—
—
Closing
rate
1.4368
1.1357
—
Average
rate
1.3071
1.0976
0.0521
Closing
rate
1.2487
1.0683
0.0534
Average
rate
1.3268
1.1705
0.0541
Closing
rate
1.4017
1.2360
0.0551
Sterling
Euro
Mexican peso
The cumulative foreign currency translation reserve was nil
to the foreign currency translation reserve. Share capital,
at the date of transition to IFRS. All subsequent movements
share premium and other reserves were translated at the
comprising differences on the retranslation of the opening
historic rates prevailing at the dates of transactions.
net assets of non-sterling subsidiaries have been taken
Notes to the Fi nanci al Statements / 35
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Year ended 31 March 2018 – continued
2. Significant accounting policies – continued
31 March 2016
Total Assets
As per Statement of Financial Position
Total Liabilities
Share Capital
Share Premiuj
Other reserves
Accumulated losses
31 March 2017
Total Assets
Total Liabilities
Share Capital
Share Premium
Other reserves
Accumulated losses
GBP
16,069
(5,779)
(1,391)
(9,859)
(3,033)
3,993
12,117
(7,018)
(1,391)
(9,859)
(3,303)
9,454
Currency
Translation effect
7,042
(2,453)
(870)
(5,901)
(12,720)
14,902
3,729
(1,740)
(870)
(5,901)
(11,694)
16,476
USD
23,111
(8,232)
(2,261)
(15,760)
(15,753)
18,895
15,846
(8,758)
(2,261)
(15,760)
(14,997)
25,930
The 2018 consolidation has been prepared in USD and not
will be able to operate within its existing facilities. However,
GBP as the decision to change reporting currencies was
the time to close new customers and the value of each
taken during the year. The currency translation effect has
customer, which are deemed high volume and low value in
therefore not been disclosed. Share capital, share premium
nature are factors which constrain the ability to accurately
and other reserves were translated at the historic rates
predict revenue performance. Furthermore, investment
prevailing at the dates of transactions giving rise to those
in winning customers, via marketing expenditure, and
equity items. The transfer between reserves that arose
servicing and delivering to new customers remains an
on the capital reduction completed in on 12 January 2011
important function of the forecasts too. As such, there is a
has been recognised at the average rate that was used to
risk that the group’s working capital may prove insufficient
translate the shares cancelled.
Going concern
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 2018, the Group had cash and cash equivalents
of $1.94m (2017: $0.28m), net cash used in operating activities
of $1.74m (2017: net cash generated of $3.29m), realised a loss
for the year of $4.87m, (2017: a loss of $7.09m which included
a one-off goodwill impairment of $3.74m), net current liabilities
of $8.42m (2017: net current liabilities of $2.39m) and had net
assets of $3.22m (2017: $7.09m).
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
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.
On August 29th, 2018 the General Meeting approved the
conversiton into shares of the £1.7m loan facility announced
on November 28th, 2017.
In order to obtain the necessary funding required, as
announced in the Circular on September 17, 2018, the
Company will be holding a General Meeting on October
4, 2018. In that General Meeting, it will be proposed to
increase the ordinary share capital by £6.0 million, of
which £3.0 million of the consideration will be received in
cash. A further £3.0 million will be satisfied by discharging
Mirada Plc from its liability to pay Kaptungs £3.0 million in
accordance with the terms of a Facility Letter signed in
March 2018, in consideration for the Company treating such
discharged amount as payment in full for the subscription
of 300,000,000 ordinary shares of 1p each in the capital of
the Company at a subscription price of 1p per new ordinary
share, each credited as fully paid up.
36 / Notes to th e Fin anc i al State me nts
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Year ended 31 March 2018 – continued
Review of the Year
Corporate Governance
Financial Statements
On September 14, 2018, Kaptungs signed an irrevocable
Where the company has control over an investee, it
voting undertaking referring the resolutions of the October
is classified as a subsidiary. The company controls an
4, 2018, General Meeting.
investee if all three of the following elements are present:
power over the investee, exposure to variable returns from
On September 21, 2018, Kaptungs provided the Registrar of
the investee, and the ability of the investor to use its power
the Company with their Proxy voting in favour of both the
to affect those variable returns. Control is reassessed
resolutions for approval at the General Meeting. As per the
whenever facts and circumstances indicate that there may
Circular, Kaptungs has 60.82% of the voting rights of the
be a change in any of these elements of control.
Company.
On September 27, 2018, the directors received confirmation
from Kaptungs that £3.0 million in cash will be transferred
to Mirada Plc from Kaptungs on 28 September, 2018, for
the subscription of 300 million new Ordinary Shares at 1p
per share to be issued, as referred to above, on approval
of the resolutions at the General Meeting to be held on
October 4, 2018. The money received was requested to
be paid before the General Meeting on October 4, 2018,
as it relates to the subscription of shares. The issue of
ordinary shares and the discharging of the loan facility are
conditional, inter alia, on the passing of the resolutions at
the General Meeting and Admission becoming effective.
Application will be made for the Subscription Shares and
the Loan Capitalisation Shares to be admitted to trading
on AIM, conditional on the resolutions being passed. It is
expected that if the resolutions are passed, Admission will
occur at 8.00 a.m. on 5 October 2018.
The directors remark that Kaptungs is a strong supporter
of the Company after injecting $10m in cash between
November 2017 and September 2018. However, the risk
that both resolutions are not passed at the General Meeting
on October 4, 2018, represents a material uncertainty,
which may cast a doubt about the Company and Group’s
ability to continue as a going concern. Whilst recognising
this uncertainty, on the basis of the Proxy votes received to
date, and the strong support from Kaptungs, the directors
believe that the resolutions will be passed at the General
Meeting on October 4, 2018, and the company and group
will be able to continue as a going concern. On this basis,
these financial statements have been prepared on a going
concern basis.
Basis of consolidation
The consolidated financial statements
incorporate the
financial statements of the Company and entities controlled
by the Company (its subsidiaries) made up to 31 March 2018.
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.
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.
Notes to the Financia l Statements / 37
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Year ended 31 March 2018 – continued
2. Significant accounting policies – continued
Goodwill
Revenues from Software as a Service (SaaS) – The Group
Goodwill represents the excess of the cost of acquisition
licenses software under
licence agreements. Under
over the Group’s interest in the fair value of the identifiable
this model, lower integration set up fees than in other
assets and liabilities of the acquired business at the date
agreements are offset by recurrent monthly licence fee
of acquisition. Goodwill is initially recognised as an asset
revenues. License fee revenues are recognised on practical
at cost and is subsequently measured at cost less any
acceptance of the software, when all obligations have
accumulated impairment losses.
been substantially completed. This is when the customer
has accepted the product ie. the risks and rewards of
On disposal of a subsidiary the attributable amount of
ownership have been transferred, it is probable that the
goodwill is included in the determination of the profit or
economic benefits of the transaction will flow to the Group,
loss on disposal.
all costs and revenue in relation to the transaction can
reliably be measured. Additionally, after deployment, the
For the purpose of impairment testing, goodwill is allocated
Group provides support and maintenance services to the
to each of the Group’s cash-generating units expected
customer.
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 is allocated to each of the
individual
elements based on each element’s fair value. The revenue
in respect of each element is recognised in accordance
with the above policies.
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
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 capitalised and 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
at the aggregate of the fair values, at the date of exchange,
Deferred development costs - over a useful life of 3 to
of assets given, liabilities incurred or assumed, and equity
instruments issued or to be issued, by the Group in
4 years
exchange for control of the acquiree, plus any costs directly
The amortisation is charged to administrative expenses in
attributable to the business combination. The acquiree’s
the consolidated income statement. Completed technology
identifiable assets, liabilities and contingent liabilities that
relates to software and other technology related intangible
meet the conditions for recognition under IFRS 3 are
assets acquired by the Group from a third party. Deferrred
recognised at their fair value at the acquisition date.
development costs are internally-generated intangible
assets arising from work completed by the Group’s product
Goodwill arising on acquisition is recognised as an asset and
development team.
initially measured at cost and is accounted for according to
the policy below.
38 / Notes to the F inan ci al Stat eme nt s
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Year ended 31 March 2018 – continued
Review of the Year
Corporate Governance
Financial Statements
Internally-generated intangible assets – research and
risks specific to the asset for which the estimates of future
development expenditure
cash flows have not been adjusted.
Any internally-generated intangible asset arising from the
Group’s development projects are recognised only if all of
the following conditions are met:
• The technical feasibility of completing the intangible
asset so that it will be available for use or sale.
If the recoverable amount of an asset (or cash-generating
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 statement of comprehensive income as
• The intention to complete the intangible asset and use
an expense immediately.
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.
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.
• The availability of adequate technical, financial and
other resources to complete the development and to
Property, plant and equipment
use or sell the intangible asset.
Property, plant and equipment is stated at cost less
accumulated depreciation and any impairment in value.
•
Its ability to measure reliably the expenditure attributable
to the intangible asset during its development.
Depreciation
is provided on all property, plant and
equipment, other than freehold land, at rates calculated
If a development project has been abandoned, then
to write off the cost, less estimated residual value based
any unamortised balance is immediately written off to
on current prices, of each asset evenly over its expected
the income statement. Where no internally-generated
useful life, as follows:
intangible asset can be
recognised, development
expenditure is recognised as an expense in the period
– Office & computer equipment
33.3% per annum
in which it is incurred. The amortisation is charged to
administrative expenses in the consolidated statement of
– Short-leasehold improvements 10% per annum
comprehensive income.
Impairment of non current assets excluding deferred
are reviewed for impairment if events or changes in
The carrying values of property, plant and equipment
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,
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.
the recoverable amount of the asset is estimated in order
Financial instruments
to determine the extent of the impairment loss (if any).
Financial assets and financial liabilities are recognised on
the Group’s statement of financial position at fair value when
Recoverable amount is the higher of fair value less costs
the Group becomes a party to the contractual provisions of
to sell and value in use. In assessing value in use, the
the instrument.
estimated future cash flows are discounted to their present
value using a pre-tax discount rate that reflects current
market assessments of the time value of money and the
Notes to the Fi nanci al Statement s / 39
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Year ended 31 March 2018 – 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 statement of comprehensive income 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.
profits will be available against which deductible temporary
40 / Notes to th e Finan ci al Stat em ent s
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Year ended 31 March 2018 – continued
Review of the Year
Corporate Governance
Financial Statements
differences can be utilised. Such assets and liabilities are
Differences between contributions payable in the period
not recognised if the temporary difference arises from the
and contributions actually paid are shown as either accruals
initial recognition of goodwill or from the initial recognition
or prepayments in the statement of financial position.
(other than in a business combination) of other assets and
liabilities in a transaction that affects neither the tax profit
Foreign exchange
nor the accounting profit.
The carrying amount of deferred tax assets is reviewed
at each reporting date and reduced to the extent that it
is no longer probable that sufficient taxable profits will be
available to allow all or part of the asset to be recovered.
Deferred tax is calculated at the tax rates that are expected
to apply in the period when the liability is settled or the
asset is realised. Deferred tax is charged or credited in the
income statement, except when it relates to items charged
or credited directly to equity, in which case the deferred tax
is also dealt with in equity.
Deferred tax assets and liabilities are offset when there is a
legally enforceable right to set off current tax assets against
current tax liabilities and when they relate to income taxes
levied by the same taxation authority and the Group intends
to settle its current tax assets and liabilities on a net basis.
Research and development tax credit
The individual financial statements of each group company
are presented in the currency of the primary economic
environment in which it operates (its functional currency).
For the purpose of the consolidated financial statements,
the result and the financial position of each group company
are expressed in US Dollars, which the presentational
currency for the consolidated financial statements.
On translation of balances into the functional currency of
the entity in which they are held, exchange differences
arising on the settlement of monetary items, and on the
retranslation of monetary items, are included in profit or
loss for the period.
For the purpose of presenting consolidated financial
statements, the assets and liabilities of the Group’s foreign
operations are translated at exchange rates prevailing
on the reporting date. Income and expense items are
translated at the average exchange rates for the period,
unless exchange rates fluctuate significantly during that
period, in which case the exchange rates at the date of
Companies within the group may be entitled to claim
transactions are used.
special tax allowances in relation to qualifying research
and development expenditure (e.g. R&D tax credits). The
Exchange differences arising on translating the opening
group accounts for such allowances as tax credits, which
statement of financial position and the current year income
means that they are recognised when it is probable that the
statements are classified as equity and transferred to
benefit will flow to the group and that benefit can be reliably
the Group’s foreign exchange reserve. Such translation
measured. R&D tax credits reduce current tax expense
differences are recognised as income or an expenses in
and, to the extent the amounts due in respect of them are
the period in which the operations is disposed of.
not settled by the balance sheet date, reduce current tax
payable. A deferred tax asset is recognised for unclaimed
Goodwill and fair value adjustments arising on the
tax credits that are carried forward as deferred tax assets.
acquisition of a foreign entity are treated as assets
They are recognised to the extent that it is expected to be
and liabilities of the foreign entity and translated at the
recoverable against future taxable profits.
Retirement benefit costs
The Group operates defined contribution pension schemes.
The amount charged to the statement of comprehensive
income in respect of pension costs and other post-retirement
benefits is the contributions payable in the period.
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.
Notes to the Financia l Statements / 41
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Year ended 31 March 2018 – continued
3. Standards not yet effective to the Group
period ended 30 September 2018 in December 2018. The
Standards,
interpretations and amendments not yet
Group expects to use the retrospective approach when
effective
adopting the standard.
The following standards have been issued by the IASB and
have been adopted by the EU:
IFRS 9 – Financial instruments
IFRS 9 – Financial instruments (Applicable from 1 April 2018)
IFRS 15 – Revenue from contracts with customers
(Applicable from 1 April 2018)
IFRS 16 – Leases (Applicable from 1 April 2019)
IFRS 16 – Leases
This standard requires almost all leases to be recorded in
the statement of financial position. This requires recognition
of a right-of-use asset and lease liability. The lease liability
is measured as the present value of the future lease
payments, discounted at the interest rate implicit in the lease
if determinable, or otherwise at the lessee’s incremental
borrowing rate. The asset is measured as equivalent to the
lease liability, adjusted for other costs including initial direct
costs or obligations under the lease such as restoration
costs. The asset is subsequently depreciated on a straight
line basis to the expected maturity date of the lease. The
This standard comes into effect for accounting periods
beginning on or after 1 January 2018. Given the nature
of the financial assets and liabilities of the Group and the
parent Company, the key areas for consideration are
trade receivables and intercompany receivables with the
introduction of ‘expected credit loss’ calculations. The
Group are in the early stages of carrying out an assessment
and are yet to conclude on whether the new standard will
have a material impact on the financial results. The Group
notes this assessment to be concluded before announcing
the 6 month interim financial results for the period ended
30 September 2018 in December 2018.
The adoption of other amendments and interpretations
are likely to not have a material impact on the financial
statements of the Group and Company.
4.
Critical accounting judgements and key
sources of estimation uncertainty
Critical judgements in applying the Group’s accounting
liability is increased by interest and reduced by the lease
policies
payments made. The impact of this standard is currently
In the application of the Group’s accounting policies,
being assessed. See note 24 for detail on operating lease
which are described in note 2, the directors are required
payment commitments.
IFRS 15 – Revenue from customer contracts
This standard comes into effect for accounting periods
beginning on or after 1 January 2018. The standard applies
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
a single, five-step model based on the principle of transfer
results may differ from these estimates.
of promised goods and services (performance obligations)
to the customer. Revenue is recognised upon satisfaction
The estimates and underlying assumptions are reviewed
of these performance obligations. Mirada Plc are in the
on an ongoing basis.
early stages of carrying out a detailed assessment of the
types of contracts the Group has with its customers and is
Key sources of estimation uncertainty and judgements
therefore not in a position to yet concluded whether the new
standard will have a material impact on reported revenue
due to the change in the timing of revenue recognition.
The Group notes this assessment to be concluded before
announcing the 6 month interim financial results for the
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.
42 / Notes to the Finan c ial Statem ents
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Year ended 31 March 2018 – continued
Review of the Year
Corporate Governance
Financial Statements
Presenting financial information in USD
See note 12 for details of key assumptions and an
In this period, the Board decided to change the reporting
currency due to the growing exposure to the US Dollar, as
all major contracts and most on the new potential deals for
assessment of reasonable changes in key assumptions
used in the impairment test.
the Company are denominated in this currency. The board
Capitalised development costs
therefore believes that USD financial reporting provides
Any internally generated intangible asset arising from
more relevant presentation of the group’s financial position,
the Group’s development projects are recognised only
funding and treasury functions, financial performance and
once all the conditions set out in the accounting policy
its cash flows. Coupled with the evolution of the business,
Internally Generated Intangible Assets (refer to note 2) are
the group’s shareholder base is now largely comprised
met. The amortisation period of capitalised development
of foreign investors to whom financial reporting in GBP is
costs is determined by reference to the expected flow of
of limited relevance. Internally, the board also bases its
revenues from the product based on historical experience.
performance evaluation and many investment decisions
Furthermore, the Group reviews, at the end of each financial
on USD financial information.
year, the capitalised development costs for each product
for indications of any loss of value compared to net book
Impairment of goodwill and intangibles
value at that time. This review is based on expected future
Determining whether goodwill is impaired requires an
estimation of the value in use of the cash-generating units
to which goodwill has been allocated. The value in use
calculation requires the Group to estimate the future cash
flows expected to arise from the cash-generating units and
the estimated future cash flows are discounted to their
present value using a pre-tax discount rate that reflects
current market assessments of the time value of money and
the risks specific to the cash-generating unit. This includes
the directors’ best estimate on the likelihood of current
deals in negotiation not yet concluded. Consequently,
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, based on feedback from existing and
potential customers, for the generation of future economic
benefits. In addition, amortisation rates are based on
estimates of the useful economic lives and residual values
the outcome of negotiations may vary materially from
of the assets involved.
management expectation.
Notes to the Financia l Statements / 43
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Year ended 31 March 2018 – 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 2018 are as follows:
Revenue
Segmental profit/(loss) (Adjusted EBITDA, see note 6)
Finance income
Finance expense
Depreciation
Amortisation
Share-based payment charge
Profit/(Loss) before taxation
Digital TV &
Broadcast
$000
Mobile
$000
7,938
(102)
—
—
(63)
(3,352)
—
878
209
—
—
(10)
—
—
Other
$000
—
Group
$000
8,816
(1,228)
(1,121)
84
(634)
—
—
(72)
84
(634)
(73)
(3,352)
(72)
(3,517)
199
(1,850)
(5,168)
$1.228 million (2017: $1.16 million) disclosed as “Other” comprises employment, legal, accounting and other central
administrative costs incurred at a Mirada Plc level.
The 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 impairment charge
Share-based payment charge
Irrecoverable sales tax expense
Profit/(Loss) before taxation
There is no material inter-segment revenue.
Digital TV &
Broadcast
$000
7,755
957
—
—
(44)
(2,715)
(3,744)
—
44
Mobile
$000
734
162
—
—
(2)
(3)
—
—
—
Other
$000
—
(1,160)
3
(423)
—
—
—
(69)
—
Group
$000
8,489
(41)
3
(423)
(46)
(2,718)
(3,744)
(69)
44
(5,502)
157
(1,649)
(6,994)
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 $5.2 million of $8.8m total revenue. This is approximately 61% of all revenue (2017:
$6.0 million, out of $8.5m) of the total Group revenues.
44 / Notes to th e F in anc i al Stat eme nt s
Review of the Year
Corporate Governance
Financial Statements
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Year ended 31 March 2018 – continued
5. Segmental reporting – continued
The segment assets and liabilities at 31 March 2018 are as follows:
Additions to non-current assets
Total assets
Total liabilities
Digital TV
$000
3,941
13,612
(9,590)
Mobile
$000
—
194
(74)
Other
$000
—
Group
$000
3,941
6,734
20,540
(7,656)
(17,320)
Capital expenditure comprises additions to property, plant and equipment and intangible assets.
The segment assets and liabilities at 31 March 2017 are as follows:
Additions to non-current assets
Total assets
Total liabilities
Digital TV
$000
3,496
9,933
(8,032)
Mobile
$000
—
218
(85)
Other
$000
—
Group
$000
3,496
5,695
15,846
(641)
(8,758)
Segment assets and liabilities are reconciled to the Group’s assets and liabilities as follows:
Digital TV – Broadcast & Mobile
Other:
Goodwill
Other financial assets & liabilities
Total other
Total Group assets and liabilities
Assets
2018
$000
Liabilities
2018
$000
Assets
2017
$000
13,807
9,664
10,151
Liabilities
2017
$000
8,118
6,492
241
6,733
—
7,656
7,656
5,643
52
5,695
—
640
640
20,540
17,320
15,846
8,758
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
Mexico
Europe
Other Americas
Asia
External revenue by
location of customer
Total assets by
location of assets
2018
$000
5,466
2,010
1,267
73
2017
$000
6,630
1,859
—
—
2018
$000
6
2017
$000
17
20,534
15,829
—
—
—
—
8,816
8,489
20,540
15,846
Notes to the Financia l Statements / 45
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Year ended 31 March 2018 – 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 13)
Amortisation of intangible assets (note 12)
Goodwill impairment charge (note 12)
Operating lease charges
Analysis of auditors’ remuneration is as follows:
Digital TV &
Broadcast
2018
$000
4,363
—
2,581
994
7,938
Mobile
2018
$000
—
878
—
—
878
Digital TV &
Broadcast
2017
$000
5,541
—
1,114
1,100
7,755
Mobile
2017
$000
—
734
—
—
734
2017
$000
46
2,718
3,744
411
2017
$000
74
17
2018
$000
73
3,352
—
473
2018
$000
87
34
Fees payable to the company’s auditor for the audit of the company's annual accounts
Audit of the account 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)
Operating profit/loss before interest, taxation, depreciation, amortisation,
impairment (EBITDA)
Share-based payment charge
Irrecoverable sales tax income
Adjusted EBITDA
2018
$000
2017
$000
(4,618)
(6,574)
73
3,352
—
46
2,718
3,744
(1,193)
(66)
72
—
(1,121)
69
(44)
(41)
46 / Notes to the F in anc i al State ments
Review of the Year
Corporate Governance
Financial Statements
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Year ended 31 March 2018 – 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
2018
$000
7,394
1,670
24
72
Group
2017
$000
6,673
1,367
22
69
9,160
8,131
Company
2018
$000
Company
2017
$000
244
13
1
72
330
240
13
—
69
322
Contained within staff costs are amounts capitalised as intangible assets totalling $3.6m (2017: $3.3m), with $5.6m
(2017: $4.8m) 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
2018
2017
11
132
6
149
10
118
6
134
The average number of persons, including executive directors, employed by the Company during the year was 7 (2017: 7)
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 21, the Director of Business Development
and the Sales Director.
Salaries and fees
Social Security costs
Other benefits
Share-based payments
2018
$000
1,171
69
28
56
2017
$000
1,149
50
26
56
1,324
1,281
Notes to the Fi nanci al Statement s / 47
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Year ended 31 March 2018 – continued
7. Staff costs and employee information – continued
Director’s remuneration
The emoluments received by the directors who served during 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 21.
Emoluments payable to the highest paid director are as follows:
Aggregate emoluments
2018
$000
2017
$000
680
707
133
813
133
840
2018
$000
279
2017
$000
302
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
2018
$000
84
84
2017
$000
3
3
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.
Bank interest payable
Related parties interests
2018
$000
243
391
634
2017
$000
423
—
423
48 / Notes to the F inan ci al Stat eme nt s
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Year ended 31 March 2018 – continued
Review of the Year
Corporate Governance
Financial Statements
10. Taxation
The tax assessed on the loss on ordinary activities for the period differs from the standard rate of tax of 19% (2017-20%). The
differences are reconciled below:
Loss before taxation
Loss on ordinary activities multiplied by 19% (2017: 20%)
Losses carried forward
Witholding Taxes
Total current tax
Decrease of deferred tax assets
Subtotal
R&D
Foreign exchange
Total tax (credit)/expense
Deferred Taxation
2018
$000
(5,168)
(982)
982
125
125
39
164
(497)
35
(298)
2017
$000
(6,994)
(1,399)
1,399
135
135
495
630
(491)
(36)
103
Deferred tax assets related to tax losses were reduced by $495,000 during FY17 in Mirada Iberia S.A. Foreign exchange
differences of $44,000 arising on consolidation of the deferred tax asset were recognised in other comprehensive income.
Deferred tax assets related to tax losses were reduced by $30,000 during FY18 in Mirada Connect. Foreign exchange
differences of $8,000 arising on consolidation of the deferred tax asset were recognised in other comprehensive income.
Reconciliation of deferred tax asset and liabilities:
Balance at 1 April
Reversal of Deferred tax asset
Foreign exchange
Balance at the end of year
Deferred taxation amounts not recognised are as follows:
Losses
Research & Development Tax Credits, useable against
future profits
2018
Asset
$000
30
(39)
9
—
2017
Asset
$000
569
(495)
(44)
30
Group
2018
$000
Group
2017
$000
Company
2018
$000
Company
2017
$000
16,272
15,290
23,870
22,459
3,082
2,739
—
—
Balance at the end of the year
19,354
18,029
23,870
22,459
The gross value of tax losses carried forward at 31 March 2018 equals $78.0 million (2017: $70.0 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.
Notes to the Fi nanci al Statements / 49
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Year ended 31 March 2018 – continued
11. Earnings per share
Loss for year
Weighted average number of shares
Basic loss per share
Diluted loss per share
Year ended
31 March 2018
Total
Year ended
31 March 2017
Total
$(4,870,019) $(7,096,551)
139,057,695 139,057,695
$(0.035)
$(0.051)
$(0.035)
$(0.051)
The Company has 4,697,166 (2017: 4,697,166) potentially dilutive ordinary shares arising from share options issued to staff.
However, in 2018 and 2017 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.
12. Intangible assets
Cost
At 1 April 2016
Additions
Foreign exchange
At 31 March 2017
At 1 April 2017
Additions
Foreign exchange
At 31 March 2018
Accumulated amortisation and impairment
At 1 April 2016
Provided during the year
Impairment charge
Foreign exchange
At 31 March 2017
At 1 April 2017
Provided during the year
Foreign exchange
At 31 March 2018
Net book value
At 31 March 2018
At 31 March 2017
At 31 March 2016
50 / Notes to the F in anc i al State me nts
Deferred
development
costs
$000
Completed
Technology
$000
Total Intangible
assets
$000
Goodwill
$000
15,698
3,258
(1,333)
17,623
17,623
3,732
2,818
1,633
17,331
41,978
180
(185)
1,628
1,628
48
221
3,438
—
(1,518)
(4,905)
19,251
19,251
3,780
3,039
37,073
37,073
—
4,904
24,173
1,897
26,070
41,977
10,306
2,625
—
(982)
11,949
11,949
3,234
2,143
1,445
11,751
31,867
92
—
2,717
—
—
3,744
(171)
(1,153)
(4,181)
1,366
1,366
118
188
13,315
13,315
3,352
2,331
31,430
31,430
—
4,055
17,326
1,672
18,998
35,485
6,847
5,674
5,392
225
262
188
7,072
5,936
5,580
6,492
5,643
10,111
Review of the Year
Corporate Governance
Financial Statements
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Year ended 31 March 2018 – continued
12. Intangible assets – continued
Company
Cost
At 1 April 2017
Foreign exchange
At 31 March 2018
Depreciation
At 1 April 2017
Foreign exchange
At 31 March 2018
Net book value
At 31 March 2018
At 31 March 2017
Deferred
development
costs
$000
173
22
195
173
22
195
—
—
The key assumptions for the value in use calculations are those regarding the discount rate applied, and the forecast
sales growth in a five years 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.
The cash flow forecast has been prepared with revenue being forecast per customer based on historical performance
of the business.
There are 2 CGUs that have been assessed for impairment are 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” (Mobile segment) 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 post-tax cash flows for both CGUs is 10.0% (2017: 10%). A 2% increase/decrease to the
discount rate does not result in an impairment. In the previous financial period, a 1% increase/decrease to the discount
rate resulted in a $500k increase and $600k decrease to the impairment processed. A 10% decrease in the five year
cash flow and terminal value forecast for both CGUs does not result in an impairment. In the previous financial period, a
1% increase/decrease to the average sales growth over the forecast period resulted in a $100k decrease and a $700k
increase to the impairment processed. A perpetual rate of 2% (2017: 2.5%) has been used in the impairment assessment.
During the previous financial period, the Group did not achieve 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 resulted in an impairment to goodwill of $3.7 million. During the current financial
period, no impairment has been recognised predominantely due to new contracts won. The split of goodwill by CGU is
as follows:
Digital TV – Broadcast
Connect
Group
2018
$000
5,521
971
6,492
Group
2017
$000
4,951
692
5,643
Notes to the Financia l Statements / 51
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Year ended 31 March 2018 – continued
13. Property, plant and equipment
Cost
At 1 April 2016
Additions
Foreign exchange
At 31 March 2017
At 1 April 2017
Additions
Foreign exchange
At 31 March 2018
Amortisation
At 1 April 2016
Provided during the year
Foreign exchange
At 31 March 2017
At 1 April 2017
Provided during the year
Foreign exchange
At 31 March 2018
Net book value
At 31 March 2018
At 31 March 2017
At 31 March 2016
The Company has no Property, plant and equipment.
14. Investments
Cost
At 1 April 2017
Additions
Foreign exchange
At 31 March 2018
Amounts provided
At 1 April 2017
Foreign exchange
At 31 March 2018
Net book value
At 31 March 2018
At 31 March 2017
52 / Notes to th e F in anc i al Stat eme nt s
Office and
computer
equipment
$000
Short-leasehold
improvements
$000
1,035
50
(109)
976
976
91
138
69
9
(11)
67
67
70
9
Total
$000
1,104
59
(120)
1,043
1,043
161
147
1,205
146
1,351
900
46
(102)
844
844
62
121
1,027
178
132
135
69
—
(11)
58
58
11
8
77
69
9
—
969
46
(113)
902
902
73
129
1,104
247
141
135
$000
12,843
6,163
1,642
20,648
7,849
985
8,834
11,814
4,994
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Year ended 31 March 2018 – continued
Review of the Year
Corporate Governance
Financial Statements
14. Investments – continued
The Company increased its investment in Mirada Iberia, SA by $6.2 million on March 12th, 2018 ($3.22 million for the financial
year ended 31 March 2017).
Despite a market capitalisation of £1.45m on the AIM London Stock Exchange, management have assessed the recoverable
amount of investments in Digital Impact and Mirada Iberia to be higher than their carrying amounts based on a 5 year
discounted cash flow forecast including a terminal value. Key assumptions include a post tax WACC of 10% (2017: 10%);
perpetual rate of 2% (2017: 2.5%) and sales growth based on historic win rate. BDO have sensitised the assumptions by
increasing WACC by 2%, decreasing the perpetual rate by 1% and reducing the five year cash flow and terminal value
forecast by 10% noting no impairment in any of the sensitivities.
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
Digital Interactive Television
Ordinary
100%
Group Limited
shares
Digital Impact (UK) Limited* Ordinary
100%
shares
Mirada Connect Ltd
Ordinary
100%
shares
UK
UK
UK
68 Lombard Street
Dormant
London EC3V 9LJ
68 Lombard Street
Interactive TV Services
London EC3V 9LJ
68 Lombard Street
Payment solutions
London EC3V 9LJ
provider
Mirada Iberia, S.A.
Ordinary
100%
Spain
Avda.General Fanjul
Interactive TV services
shares
2B 28044 Madrid
Mirada Mexico, S.A.*
Ordinary
100%
Mexico
Montes Urales 505-2º
Interactive TV services
shares
11000 México DF
* Held indirectly in Mirada Iberia S.A.
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
2018
$000
1,384
—
—
1,388
489
1,223
4,484
308
308
Group
2017
$000
999
—
—
1,266
272
677
3,214
635
635
Company
2018
$000
Company
2017
$000
95
476
—
7
—
39
617
—
—
—
166
—
5
—
37
208
—
—
Notes to the Fi nanci al Statements / 53
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Year ended 31 March 2018 – continued
15. Trade & other receivables – continued
Trade receivables
Trade receivables net of allowances are held in the following currencies:
Sterling
US Dollars
Euro
Total
2018
$000
239
1,016
129
1,384
2017
$000
90
481
428
999
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 $16,000 (2017: $423,000) which are
past due at the reporting date and have been collected before 31 July 2018. The average age of these receivables is 120
days (2017: 107 days).
Ageing of past due but not impaired trade receivables:
30-60 days
60-90 days
90+ days
Total
Movement in allowance for doubtful debts:
Balance at beginning of year
Utilised in year
Balance at the end of the year
2018
$000
—
—
16
16
2018
$000
—
—
—
2017
$000
45
95
283
423
2017
$000
33
(33)
—
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.
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.
54 / Notes to th e Fin an c ial Statem ents
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Year ended 31 March 2018 – continued
Review of the Year
Corporate Governance
Financial Statements
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 56 days (2016: 76 days).
Trade payables
Amount owed to group undertakings
Other payables
Other taxation and social security taxes
Accruals
Deferred income
Group
2018
$000
327
—
976
488
529
1,360
3,680
Group
2017
$000
585
—
401
268
130
1,844
3,228
Company
2018
$000
118
5,903
71
54
117
83
Company
2017
$000
84
4,246
61
39
—
64
6,346
4,494
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
Related parties loans
The borrowings are repayable as follows:
Up to 3 months
3 to 6 months
6 to 12 months
On demand or within one year
Group
2018
$000
1,271
84
477
Group
2017
$000
531
106
479
1,832
1,116
Company
2018
$000
Company
2017
$000
1,137
772
4,300
6,209
2,317
652
1,422
4,391
Group
2018
$000
985
3,083
178
6,917
Group
2017
$000
—
2,576
79
—
11,163
2,655
10,473
1,999
198
492
253
403
11,163
2,655
Company
2018
$000
Company
2017
$000
—
277
—
6,917
7,194
—
—
7,194
7,194
—
392
—
—
392
—
—
392
392
Notes to the Financia l Statements / 55
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Year ended 31 March 2018 – continued
17. Loans and borrowings – continued
At 31 March 2018, the Group has $0.37 million in available credit lines not used and $1.34 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
2018
$000
863
1,614
2,477
2017
$000
1,322
1,553
2,875
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 19).
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
2018
$000
11,163
2,477
(1,937)
11,703
2017
$000
2,655
2,875
(277)
5,253
56 / Notes to th e Finan ci al Stat em ent s
Review of the Year
Corporate Governance
Financial Statements
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Year ended 31 March 2018 – continued
18. Non-current liabilities – continued
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
Related parties loans
On demand or within one year
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
2018
$000
2017
$000
1,871
1,368
618
293
668
708
2,782
2,744
2,004
268
1,181
175
3,628
6,917
6,917
985
985
11,777
886
1,474
175
14,312
1,424
233
1,024
153
2,834
—
—
—
—
2,792
901
1,732
153
5,578
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 $29,230 (2017: $21,684).
At 31 March 2017, contributions amounting to $5,432 (2017: $5,149) were payable and included in other payables.
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.
Notes to the Fi nanci al Statements / 57
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Year ended 31 March 2018 – continued
20. Financial instruments – continued
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
* Excluding other taxation, social security and deferred income.
Financial risk management objectives
2018
$000
2017
$000
4,250
1,937
6,187
1,832
11,163
2,477
15,472
2,983
277
3,260
1,116
2,655
2,875
6,646
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.
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.
58 / Notes to the Fin an c ial Statem ents
Liabilities
Assets
2018
$000
—
2017
$000
—
9,512
7,961
2018
$000
1,017
5,747
2017
$000
481
3,040
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Year ended 31 March 2018 – continued
Review of the Year
Corporate Governance
Financial Statements
20. Financial instruments – continued
Foreign currency sensitivity analysis
In fiscal year 2017, the Company used the Sterling pound as presentational currency and disclosed the foreign exchange
sensitivity of the Euro and USD with the Sterling.
In fiscal year 2018, the Company has used USD Dollar as presentational currency. The following table details the Group’s
sensitivity to a 20% increase and decrease in USD against the Euro and to a 20% increase and decrease in USD against
Sterling. The sensitivity analysis includes Euro and Sterling denominated monetary items and adjusts their translation at
the period end for a 20% change in the Euro/USD rate and for a 20% change in the Sterling/USD rate at March 31, 2018.
A positive number below indicates an increase in profit and other equity where US Dollar strengthens against the relevant
currency. For a weakening of US Dollar 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 US Dollar.
Contained within Sterling are the related party loans (one of £1.7 million in November 2017 which was converted post year
end (August 29th, 2018) into equity, and a £3.0 million facility), totalling $3.3m. Without taking into account these two loans,
the total would be $1.5m.
Euro
Sterling
Interest rate risk management
Profit and loss impact
2018
$000
(941)
(1,530)
2017
$000
(1,230)
(1,621)
At 31 March 2018, 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 $456,473. The remaining bank loans totalling $1,282,460 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.
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.
Notes to the Fi nanci al Statement s / 59
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Year ended 31 March 2018 – continued
20. Financial instruments – continued
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
CaixaBank
BBVA
Barclays
Bankia
Bankinter
A
BBB+
A-
A
BBB
BBB+
Liquidity risk management
2018
% of overall
cash & cash
equivalents
—
91.9%
1.1%
6.7%
—
0.1%
Carrying
amount
$000
—
1,780
21
130
—
2
2017
% of overall
cash & cash
equivalents
7.0%
—
—
27.6%
6.2%
47.0%
Carrying
amount
$000
19
—
—
77
17
130
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 2018 is as follows:
Allotted, called up and fully paid
Ordinary shares of £0.01 each
22. Reserves
Share premium
2018
Number
2018
$000
2017
Number
2017
$000
139,057,695
2,261 139,057,695
2,261
The amount subscribed for share capital in excess of nominal value.
Other Reserves – 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.
Other Reserves- 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.
60 / Notes to the Finan ci al Stat eme nt s
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Year ended 31 March 2018 – continued
Review of the Year
Corporate Governance
Financial Statements
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
Javier Casanueva passed away on May 12th, 2018
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 12 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.
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
2018
2017
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
4,697,166
—
—
—
4,697,166
4,697,166
Weighted average
exercise price
(£)
0.10
—
0.10
—
0.10
0.10
Notes to the Financia l Statements / 61
23. Share based payments – continued
The options outstanding at 31 March 2018 and at 31 March 2017 had a range of exercise prices from £0.10 to £1.85.
The options outstanding at 31 March 2018 had a weighted average remaining contractual life of 3.4 years (2017: 4.4 years).
For the year ended 31 March 2018, the Group has recognised a total expense of $72,000 (2017: $69,000) 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
After 5 years
Group
2018
$000
498
596
1,360
1,094
Group
2017
$000
325
367
—
692
Company
2018
$000
Company
2017
$000
29
—
—
29
31
18
—
49
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 increase/(decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of year
Cash and cash equivalents at end of year
Cash and cash equivalents
Cash and cash equivalents are held in the following currencies:
Sterling
Mexican Peso
Euro
Total
62 / Notes to the F inan ci al Stat em ent s
2018
$000
1,937
1,660
277
1,937
2018
$000
130
2
1,805
1,937
2017
$000
277
(748)
1,025
277
2017
$000
77
10
190
277
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSYear ended 31 March 2018 – continued 25. Notes supporting cash flow statement – continued
Reconciliation of liabilities from financing activities:
Group
Loans received
Related parties loans
Related parties loans interests
Total liabilities from financing activities
Company
Loans received
Related parties loans
Related parties loans interests
Total liabilities from financing activities
26. Related party transactions
Non-cash
changes
Foreign
exchange
movement
—
—
329
329
Non-cash
changes
Foreign
exchange
movement
—
—
329
329
Cash
flows
1,193
6,588
—
7,781
Cash
flows
(115)
6,588
—
6,473
2018
$000
6,723
6,588
329
13,640
2018
$000
277
6,588
329
7,194
2017
$000
5,530
—
—
5,530
2017
$000
392
—
—
392
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.
On 28 November 2017, the Company announced it entered into agreements for the provision to the Company of unsecured
one-year loan facilities of up to an aggregate amount of $2.4 million. The Facility has certain conditional subscription rights in
respect of new ordinary shares of 1p each in the capital of the Company. The Facility is being provided by Kaptungs Limited,
Kronck Business S.A. and Minles Corporation Inc.
On 7 March 2018, the Company announced it entered into a secured one-year loan facility for up to $4.2 million. The Facility
is being provided by Kaptungs Limited.
Kaptungs is an investment company which is beneficially owned by Mr Ernesto Luis Tinajero Flores and, at March 31st 2018,
has a total beneficial interest in 37,593,449 Ordinary Shares in Mirada, which represents 27.03 per cent of the voting rights in
the Company.
Company
Details of balances and transactions with group companies:
Mirada Iberia
Digital Impact
Mirada Connect
2018
2017
Balance
$000
Transactions
$000
Balance
$000
Transactions
$000
(5,178)
(327)
77
256
24
—
(4,247)
(100)
265
284
18
—
27. Events after the reporting date
Refer to note 2 of the financial statements for detail on events after the reporting date.
Notes to the Fi nanci al Statements / 63
Review of the Year Corporate Governance Financial StatementsNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSYear ended 31 March 2018 – continued
OFFICERS AND PROFESSIONAL ADVISERS
Directors
Mr Javier Casanueva
Non-Executive Chairman (passed away on May 12th, 2018)
Mr José-Luis Vázquez
Chief Executive Officer
Mr Francis Coles
Non-Executive Director (new Chairman from May 17th, 2018)
Mr Matthew Earl
Mr Jose Gozalbo Sidro
Mr Gonzalo Babío
Non-Executive Director
Executive Director
Executive Director
Auditors
BDO LLP
55 Baker Street
London
W1U 7EU
Company Registrars
Link Registrars Limited
Bourne House
34 Beckenham Road
Kent
BR3 4TU
Company Secretary
Filex Services Limited
Nominated Adviser and Broker
Allenby Capital Limited
5 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
64 / Officers an d P rofessi o nal Adv is ers
Printed by Rubicon Corporate Print
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