UK
SPAIN
MEXICO
CHILE
PHILIPPINES
L O N D O N HE A D Q U A R T ER S
JL9 V3 CE - nodnoL ,teertS drabmoL 86
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A N N U A L R E PO R T
A N D A C C O UN T S
1 /
2020
COMMON ACRONYMS
AMS - Asset Management System
CMS - Content Management System
DTH - Direct-to-Home / Satellite transmission
IPTV - Internet Protocol Television
OTT - Over-the-top
SaaS - Software as a Service
SDP - Service Delivery Platform
STB - Set-top box
SVoD - Subscription Video on Demand
TVoD - Transactional Video on Demand
UI - User Interface
UX - User Experience
VoD - Video on Demand
2 /
OUR YEAR
Executive Management
About Mirada
Our Solution
Partners & clients
Our Products
Investor Insights
REVIEW OF THE YEAR
Highlights of the Year
CEO Statement
Strategic Report
CORPORATE GOVERNANCE
Directors’ Report
Audit Committee Report
2
3
4
5
6
8
12
15
19
23
29
Nominations and Remuneration Committee Report
30
Statement of Directors’ Responsibilities
31
FINANCIAL STATEMENTS
Independent Auditors’ Report
32
Consolidated Statement of Comprehensive Income
38
Consolidated Statement of Financial Position
39
Consolidated Statement of Changes in Equity 40
Consolidated Statement of Cash Flows
41
Notes to the Consolidated Financial Statements 42
Company Statement of Financial Position
76
Company Statement of Changes in Equity
77
Notes to the Company Financial Statements
78
Officers and Professional Advisers 85
3 /
EXECUTIVE MANAGEMENT
JOSÉ LUIS VÁZQUEZ
CEO
Founder and Chief Executive
Officer of Mirada PLC and the
Chairman of Spanish Associa-
tion of Interactive Technology
Companies (AEDETI). He holds
a degree in Advanced Telecom-
munications Engineering and
an MBA f rom IESE Business
School.
JOSÉ GOZALBO
CTO
José has been Chief Technolo-
gy Officer of Mirada since its
creation. He holds a degree in
Computer Science and he has
in depth experience in Softwa-
re Development and Digital TV
markets.
NURIA LAHUERTA
VP HUMAN RESOURCES
Nuria joined Mirada in 2011 as
Office Manager until finally
becoming VP Human Resour-
ces and the first female to join
Executive Management. She
studied History of Art at Zara-
goza University and a Masters
in Innovative HR Management.
JAVIER PEÑÍN
VP SALES
His previous experience inclu-
des 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.
He holds a BSc in Telecoms
f rom
Engineering and BMD
IESE.
2 / Executi ve Mana gem ent
2 / Executi ve Mana gem ent
GONZALO BABÍO
CFO
Prior to joining Mirada in 2015
as the Chief Financial Officer,
he worked as Finance Director
for both The Walt Disney Com-
pany (10 years) and Electronic
Arts (10 years). He holds an
EMBA
IESE Business
School, among other titles.
f rom
ANTONIO RODRÍGUEZ
VP BUSINESS DEV.
He joined Mirada f rom Jazztel
PLC, where he held the roles of
Network Engineering Manager
and Telco Platforms and OSS
Manager. He holds a BSc in
Telecommunications Enginee-
ring and an MBA f rom IE Busi-
ness School.
ROSZANA DALATI
VP MARKETING
Roszana
joined Mirada as
Marketing Manager before
forming part of Executive
Management in 2017. She holds
a degree in International Rela-
tions and a Masters in Strategic
Management of Sales & Marke-
ting f rom IE Business School.
SANTIAGO RODRÍGUEZ
VP PRODUCT
in Telco Enginee-
Graduated
ring
the Polytechnic
f rom
University of Madrid, Santiago
joined Mirada back in 2000. He
has broad R&D experience
within the audiovisual industry
and he is responsible for the
definition of Mirada's vision
and products.
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 more than twenty years
content providers such as Netflix, HBO, Fox and
ago, Mirada's products and solutions have been
more to come.
deployed by some of the biggest names in broad-
casting including Telefonica, Sky, Virgin Media,
The Company prides itself on being a pioneer in
BBC, ITV and Televisa, the largest media company
Digital TV technology. Following the success of
in the Spanish-speaking world. Mirada has also
Televisa’s izzi platform powered by Iris, Mirada's
established partnerships with key players in the
growing pipeline of opportunities is currently the
Digital TV world, along with integrations with
greatest the company has ever seen.
PRESENCE AROUND THE WORLD
OFFICES
REPRESENTATIVES
UK
SPAIN MEXICO
CHILE
PHILIPPINES
3 / About Mira da
3 / About Mira da
3 / About Mira da
OUR SOLUTION
We serve companies looking to launch a new video service to reap the rewards of the growing desire for content:
Telcos
Pay TV Operators
Broadcasters
Content owners
We help our customers tackle challenges by providing them with:
CHALLENGE
PROPOSAL
COMPETITIVE MARKET
A quality multiscreen user experience to attract,
engage, retain and grow subscriber base.
USER EXPECTATIONS
An unparalleled platform with advanced features,
constant integrations of devices and third-parties.
LIMITED EXPERTISE
Our experience and product portfolio to receive
and respond to a valuable, data-driven vision.
PLANNING DIFFICULTIES
Our forward-thinking vision and future-proof
product roadmap to keep at the cutting-edge.
INITIAL INVESTMENT
A choice of flexible business models to suit our
customers’ specific business needs.
4 / Ou r S oluti on
4 / Ou r Prop osal
OUR PARTNERS
OUR CLIENTS
and more
and more
“The most beautiful, smooth
and user-friendly TV interface
I have ever interacted with”
“The technology that powers
izzi’s multiscreen platform is
the most advanced in the
entire region”
CARLOS SOARES
GUILLERMO SALCEDO
PROJECT MANAGER
DIRECTOR OF MARKETING
5 / Par tn ers & Clients
5 / Par tn ers & Clients
OUR PRODUCTS
THE ULTIMATE
VIEWING EXPERIENCE
IRIS MULTISCREEN SOLUTION | Our Iris multiscreen solution provides pay TV operators, telcos, content
providers and broadcasters with a next-generation video platform to deliver live, catch up and on-demand
content to audiences anytime and anywhere. Iris empowers Mirada’s clients with a personalised and
intuitive user experience across all devices to attract, engage and retain audiences and maximise
consumption-based revenues.
The cost-effective, end-to-end software solution comes with an integrated set of advanced applications and
modules, including our Iris Inspire UI, Iris SDP and Iris CMS, to provide a flexible and universal DTH/IPTV/OTT
solution that is easy to deploy, customise and extend.
Iris is supported across all major devices to help customers satisfy the demands of an increasingly
connected and multiscreen world:
SET-TOP
BOXES
TABLETS &
MOBILES
VOICE
ASSISTANTS
STREAMING
DEVICES
6 / Ou r Produc ts
6 / Ou r Produc ts
SMART TV
AirPlay
WEB
CLIENT
IRIS CUSTOM LAUNCHER FOR
Our custom launcher for Android TV Operator Tier is our Iris-based proposal for operators looking to serve
growing consumer demands for a connected home experience with easy access to third-party content
apps, while maintaining a high quality and customised TV service.
Our powerful data intelligence platform,
LogIQ, arms our clients with valuable
consumption, navigational and operational
insights into their Iris-powered TV service to
make better, data-driven decisions.
A highly flexible and easy to use tool to provide
our clients with the ability to adapt, test and
evolve elements of their user experience to suit
changing consumption habits.
7 / Our Produc ts
7 / Our Produc ts
INVESTOR INSIGHTS
OUR 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.
designed to future-proof the platforms of operators
These markets display promising characteristics such
and broadcasters worldwide, by dramatically impro-
as high pay TV penetration rates, increasing populari-
ving their user experience with cutting-edge features
ty of multiscreen viewing and high annual growth
for content discovery and compatibility across all
rates of on-demand video services, along with
platforms and devices. This enables us to fully satisfy
burgeoning middle classes providing rapid growth in
the
increasing number of operators with a
consumer spending.
bring-your-own-device strategy, 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 the
resources to take full advantage of the augmented
needs of all operators, providing a choice between a
interest in our offerings following the successful
CAPEX model where they will have higher set-up fees
high-profile deployment of our flagship product with
and one-off subscriber licence fees, or a SaaS model
Tier 1 operator izzi Telecom. We offer our products
which means lower set-up fees but recurring monthly
worldwide and we benefit from an increased pipeline
subscriber fees.
of opportunities through a direct relationship with
customers, for whom we are a partner for growth.
MIRADA IN NUMBERS
FACTS ABOUT OUR COMPANY
20
years of
experience
58
satisfied
clients
+1.8M
daily active
devices
+2.8M
set-top boxes
deployed
+60
projects
developed
85%
engineering
experts
8 / Investor Insights
8 / Investor Insights
INVESTOR INSIGHTS
OUR TARGET MARKET
The global pay TV market is one of the largest industries in the world with subscribers expected to grow by 35
million between 2019 and 2025 to reach 1.06 billion. However, due to the huge advancements in technology,
changing consumer lifestyles and the arrival of OTT competitors, pay TV revenues are set to peak. As a result,
traditional operators are looking for new ways to enhance their existing propositions to keep subscribers
engaged and protect their market position.
Total revenues in our target markets are forecast to grow
by over 60% between 2017 and 2023 to reach $122 billion
— Omdia, 2020
Many traditional operators are turning their attention towards IPTV delivery or enhancing their existing TV
proposition with OTT features. These platforms allow operators to deliver content anytime and anywhere across
increasingly popular connected devices such as smart TVs, media streaming devices and game consoles. Other
operators are also turning towards Android TV Operator Tier to offer their viewers a next generation TV service
along with all the benefits of the Android environment and access to third-party content.
We pursue opportunities all around the world, with particular focus on the following regions of high growth:
Latin America
Eastern Europe
Middle East
Asia Pacific
Expected revenues growth in Pay TV & SVoD (2017-2023)
+33%
+35%
+30%
+76%
— Omdia, 2020
9 / Investor Insight s
9 / Investor Insight s
INVESTOR INSIGHTS
MIDDLE EAST
Pay TV and SVoD revenues between 2017 and 2023 in the Middle East are expected to grow by 30% to
reach just over $3 billion (Omdia, 2020). At the same time, the growing demand for richer, on-demand
video services from consumers in the region is encouraging operators to find new ways to enhance their
existing proposition and grow their customer base by forming partnerships with third-party OTT provi-
ders or introducing their own OTT services. Mirada’s Iris technology is well-positioned to empower opera-
tors with an advanced TV platform to provide live and OTT content with a quality viewing experience for
consumers. With Mirada’s custom launcher for Android TV, audiences can easily access third-party appli-
cations such as Netflix and Disney+, as well as and local OTT providers such as Starz Play through Google
Play Store.
PAY TV & SVOD REVENUES
GROWTH IN MIDDLE EAST
+30%
— Omdia, 2020
2017
2023
LATIN AMERICA
The Latin American market continues
to see strong pay TV and SVoD growth,
with revenues expected to grow by 33%
between 2017 and 2023 to reach over
$20 billion. With the growing popularity
of online TV and SVoD video services
such as Netflix, OTT TV and video
revenues in Latin America are expected
to reach $66 million in 2025, up from
$36 million in 2019. Traditional pay TV
operators in Latin America are looking
to launch their own OTT offerings to
appeal to content-hungry audiences.
However, they
face the hurdle of
less-than-flexible development environ-
ment for set-top boxes. Our Iris custom
launcher for Android TV helps put
operators on the same footing as pure
OTT providers, as it allows them to
personalise their platform, prioritise
their own content and provide an enga-
ging and attractive user experience to
appeal to audiences.
10 / Investor Insights
10 / Investor Insights
OTT TV & VIDEO REVENUE
REACH IN LATAM
— Research and Markets, 2019
$66M
2025
$36M
2019
EASTERN EUROPE
Pay TV and SVoD revenues in Eastern Europe are expected to grow by 35% between 2017 and 2023 to
reach almost $10 billion (Omdia, 2020). The territory is expected to have over 26 million SVoD subscriptions
by 2024, up from 10 million recorded at the end of 2018 (Digital TV Research, 2020). With the growing
popularity of SVoD services, along with Netflix actively seeking new partnerships with pay TV operators in
the region, customers are increasingly demanding an “entertainment hub” to access all of their favourite
content from their different subscriptions in one place. Mirada’s Iris multiscreen solution facilitates opera-
tors in the region with the ability to become the content aggregator and drive engagement by providing
a quality video platform with the ability to integrate third-party content apps.
GROWTH OF SVOD SUBS IN EASTERN EUROPE
— Digital TV Research, 2019
10.02M
2018
26.19M
2024
ASIA PACIFIC
With pay TV and SVoD revenues expec-
ted to grow by 76% between 2017 and
2023 to reach almost $90 billion (Omdia,
2020), Asia Pacific is the fastest growing
pay TV market in the world. The region
expects
to
see
subscription OTT
revenues reach $19.9 billion by 2024
(S&P Global, 2020). The huge appeal
amongst consumers of a TV anywhere
concept means it is crucial for operators
to provide a unified multiscreen expe-
rience to deliver all types of content, and
the ability to track and manage their
service and audiences across all devices.
Mirada’s Iris technology serves opera-
tors with an advanced TV platform with
seamless
cross-device
interactivity,
along with LogIQ, Mirada's data intelli-
gence platform, to provide valuable
insights into consumption, operational
and navigational aspects of their video
service.
11 / Inve stor Insight s
11 / Inve stor Insight s
$90B
PAY TV & SVOD REVENUE
GROWTH IN ASIA PACIFIC
+76%
— Omdia, 2020
2017
2023
HIGHLIGHTS OF THE YEAR
IZZI CONTINUES TO GROW
With our largest client, izzi, the use of Mirada’s Iris technology continues to grow rapidly, with more than 2.8
million set-top boxes deployed at the end of the fiscal year in approximately 1.5 million households. More than 1
million households are now using izzi’s OTT service as well, supplied by Mirada’s technology, on smartphones and
web browsers. During the year, Mirada has also been focused on deploying many new features for izzi, including
navigational analytics and addressable advertising to further enrich their service, in addition to preparing for the
upcoming launch of Android TV across izzi’s service, which is expected to become the largest Google-based
set-top box deployment in the Americas to date.
NETFLIX INTEGRATION
Earlier this year, we were delighted to announce the
with an excellent opportunity, as facilitating access
integration of Netflix, the world’s leading entertain-
to catalogues of popular content such as the
ment service, with our Iris multiscreen technology.
award-winning “Stranger Things” helps to attract
With this integration, all of Mirada’s clients that have
and retain more loyal subscribers and keep them
an agreement with Netflix now have the option to
active and consuming content within
their
provide their customers with access to the strea-
platform. The first operator to take advantage of
ming giant’s on-demand service directly from
Mirada’s integration with Netflix was izzi, which
Iris-powered set-top boxes. This provides operators
introduced Netflix across its service in July 2019.
12 / Highli ghts of th e year
12 / Highli ghts of th e year
HIGHLIGHTS OF THE YEAR
CONTRACT WIN IN SPAIN FOR “ZAPI”
In September, we secured a new contract with
the contract win, we have been working hard to
Plataforma Multimedia de Operadores (PMO), a
finalise the integration activities and we hope to
group of independent telecommunication suppliers
launch commercially in the very near future. Mirada
in Spain. The contract will see the launch of a new
attended a very successful trade event with PMO in
OTT platform, Zapi, to unify the historic cable indus-
the South of Spain in October where we showcased
try and their subscribers under the same brand and
our OTT technology to large crowds to attract more
to become the fourth TV platform in Spain. Since
independent suppliers to the Zapi brand.
UPDATE ON OTHER PROJECTS
Our client and one of Mongolia’s leading mobile and IPTV service
providers, Skytel, saw a much larger than anticipated adoption of their
OTT service facilitated by Mirada’s technology. The expectations of our
client for the first year was to reach less than 10,000 customers. Howe-
ver, in under nine months, Skytel was providing their OTT service to
more than 280,000 subscribers. The SkyGo applications for mobiles
both reached number one for the most downloads in the country in
both the Google Play Store and Apple’s App Store.
Regarding ATNi, our Atlanta-based client, we deployed our Iris techno-
logy into their Bermuda cable network, One Communications, where
our solution now covers the vast majority of households. Mirada is now
focused on the deployment in Viya, a leading operator in the US Virgin
Islands, which is expected to launch in the upcoming weeks.
As for Digital TV Cable in Bolivia, the client had to solve internal techni-
cal problems before the initial launch of their pay TV service back in
April 2019, and we continue providing support to their operations
while they work to fully deploy the rest of their pay TV service. This year
we also announced the first certifications of our Smart TV technology
and Roku-based services for Digital TV Cable.
13 / Highl ights of th e yea r
13 / Highl ights of th e yea r
HIGHLIGHTS OF THE YEAR
INCREASE IN CONSUMPTION DURING COVID-19
Regarding COVID-19, the whole company transitioned to remote-working and has been performing without
incident since the start of the lockdown. We have continued implementing and deploying new product features
as planned, without delays, and we do not foresee any operational constraints for the time being. During the
global pandemic, our clients have seen an exceptional increase in demand for their services owing to generali-
sed lockdowns in their territories. Our data analytics platform, LogIQ, noted an increase of 24% in total linear
consumption between February and April, with an 80% increase in consumption of linear news channels. The
data also revealed a 41% increase in total VoD consumption, with a staggering 122% increase in consumption of
VoD kids’ content. Our clients also saw a 41% increase in the number of purchases of TVoD content between
February and April, boosted by operators’ generous discounts on premium content, implemented by Mirada.
VoD
INCREASE IN AVERAGE
MONDAY - FRIDAY
VOD CONSUMPTION
+32%
FEB - APR
More people staying
at home from work
means more free time
mid-week to watch
VoD content
POST-YEAR END
LAUNCH OF IRIS IN SWIFT MODE
The swift way to launch a new video service
Post-year end, Mirada announced a new com-
while
reducing
the
time-to-market and
prehensive and affordable SaaS business
avoiding high upfront costs, without jeopardi-
model, Iris in Swift Mode, to reach more poten-
sing the quality cross-screen user experience
tial clients including operators, telcos, broad-
for increasingly demanding customers. Mirada
casters and content owners. Clients of Swift
has plans to launch an extensive marketing
Mode will be able to deploy and benefit from a
campaign in the upcoming months to boost
highly competitive, cloud-based video service,
our pipeline of opportunities with Swift Mode.
14 / H ighlights of th e year
14 / H ighlights of th e year
CEO STATEMENT
JOSÉ LUIS VÁZQUEZ
“Our customers have become even more
invaluable to consumers with an
unprecedented rise in consumption”
OVERVIEW
We present the Group’s financial results for the year
ended 31 March 2020. The year ended during a global
pandemic, which is still with us today and continues to
have devastating effects across the world. Our
thoughts and prayers are with all those affected.
For Mirada, even discounting the one-off effect of the
disposal of the non-core parking payment activities of
Mirada Connect, last year saw a significant improve-
ment financially, operationally, and commercially.
Despite having incurred an operating loss of $1.36m
(2019: $2.91m), the Company’s performance has drama-
tically improved over the past 12 months, with remarka-
ble growth in adjusted EBITDA. Operationally, the
Group has been able to augment itself to fully deploy
its flagship Iris solution across different markets. Com-
mercially, Mirada has benefited from the references
provided by its prior successful deployments, which
have reinforced the Group’s presence and credibility in
the market.
The main highlights for the year were the integration
with Netflix, our new contract win with PMO (Platafor-
ma Multimedia de Operadores) in Spain, and the sale of
Mirada Connect, among others. These provide further
proof of the quality of our solution and are important
steps forward in achieving a greater market footprint
and solid financial stability. In addition, we have a
growing proportion of recurrent revenues
from
present customers, and confidence that our operatio-
nal skills will enable us to continue to deliver for our
customers. We therefore view the year ahead with
cautious optimism, despite the uncertainties of the
present health and economic environment.
TRADING REVIEW
This was the first year the Group’s sole focus was on its
main area of business, the Digital TV sector. In July, the
mobile payments for parking division, Mirada Connect,
was acquired by PayByPhone, a subsidiary of Volkswa-
gen Financial Services, for a consideration of £2.12
million, representing a one-off gain in profit of approxi-
mately $1.7 million for the Group. This was an impor-
tant and positive development for the Company,
allowing it to reinforce the balance sheet and to focus
the management on the core Digital TV business.
Mirada’s main product, the Iris platform, continued to
gain traction across its installed customer base and the
Company was successful in winning new customers
during the year. The Company has continued deplo-
ying its business model, to benefit from the growth of
its customers, and we are pleased to see how our
customer’s subscriber bases using Mirada’s products
continue to grow.
Within our largest customer, izzi telecom, based in
Mexico, the use of our technology continues to grow
rapidly, with more than 2.8 million Linux-based set-top
boxes (STBs) deployed at the end of the fiscal year in
approximately 1.5 million households. Significantly,
more than 1 million households are now using izzi’s
over-the-top (OTT) product (based on mobile devices
and web browsers) supplied by Mirada. While the
customer adoption of Mirada’s products remains high,
there is still a large part of izzi’s installed base to cover,
as it has in excess of 4.2 million pay TV customers,
representing more than 8 million STBs, and our expec-
tation is that nearly two thirds of the installed base will
still need to be replaced with Mirada’s technology.
15 / C EO S tatem e nt
15 / C EO S tatem e nt
During the year, Mirada has also been focused on
deploying the next-generation service at izzi, based on
Android TV technology, which is likely to become the
largest Google-based set-top box deployment in the
Americas to date.
Regarding ATN International, our Atlanta-based custo-
mer with a footprint in the Caribbean and mainland
US, we are happy to have delivered our solution in their
Bermuda cable network, One Communications, where
our solution now covers the vast majority of house-
holds. Mirada is now focused on the deployment in
Viya, ATN Internationals’US Virgin Islands network,
which will launch our product in the next few weeks.
“Last year saw a significant
improvement financially, operationally
and commercially”
Regarding Digital TV Edmund, in Bolivia, the customer
is slowly solving internal technical problems that dela-
yed the deployment of our solution, and we foresee
those being resolved in the next few months. In the
meantime, we continue providing support to their
operations while they work to fully deploy their pay TV
service. Within this customer we are glad to announce
the first certifications of our Smart TV technology and
our Roku based services.
We are also happy to report a much larger than expec-
ted adoption of Iris in SkyTel, our Mongolian customer.
Our expectation was to have less than 10,000 of their
customers subscribe to our services in the first year of
operation. However, by the end of March, in less than
nine months, the customer was providing our techno-
logy to more than 280,000 subscribers, and our mobile
applications in Android and iOS were both number one
for the whole country in the Google Play and Apple
Store services.
We secured a new customer in September, Plataforma
Multimedia de Operadores (PMO), in Spain, which,
under the “Zapi” brand, aggregates a substantial
number of subscribers across multiple independent
telecommunication suppliers in the country. We have
been working hard to finalise the integration activities
since the contract win and, with integration and
deployment timelines
improving with each new
customer we win, we hope to launch commercially in
the next few weeks. Zapi has the potential to reach
hundreds of thousands of customers
in Spain,
becoming our largest deployment of Iris in Europe to
date.
16 / CEO Statem ent
16 / CEO Statem ent
The entire Group was able to transition to complete
remote working practices at the beginning of March
due to the outbreak of COVID-19, and we are satisfied
to note that, more than three months into this new
scenario, operations remain perfectly normal with no
impact on our capability to deliver our products and
services. Our customers, which are mostly telecommu-
nications providers of TV services, have become even
more invaluable to consumers and have experienced a
unprecedented increase of nearly 25% in linear TV
consumption and more than 40% for video ondemand
(VoD) consumption. In addition, broadband usage has
increased over 30% in our customers’ networks. This
increase in our customers’ activities has made our
visibility of revenues for the coming year much higher
at this stage than in any other prior year. This lends us
confidence in our abilities to continue our business
without disruption over the coming months.
Our pipeline also remains strong, despite the difficult
confinement and uncertain situation imposed by the
COVID-19 pandemic, although we are conscious that,
until the pandemic resides, there could be delays in
decisions from new customers. Although our custo-
mers, and the sector at large, are currently benefiting
from the sharp rise in demand for audiovisual and
connectivity services, it is still too early to predict if the
potential reduction in the purchasing power of consu-
mers will have an overall negative impact in the telco
and pay TV business.
As part of our SaaS strategy, Mirada has been able to
agree long term contracts with key customers, with an
increasing recurrent revenue component. This allows
our customers to benefit from continuous product
improvement and aligns their
long-term growth
objectives to ours, as we benefit from growth in their
subscriber numbers. While it usually means a higher
level of investment during the deployment stage,
which is not being capitalised, it also provides Mirada
with an improved medium and long-term return on
investment. The efforts made during prior years on
winning and deploying customers are now providing a
higher level of recurrent revenue as well as visibility
over future revenues. This is ultimately increasing our
total turnover, reducing operational
losses and
allowing the Group to steadily approach a stage of
sustained profitability.
“We are pleased to see how our
customers’ subscriber bases using
Mirada’s products continue to grow”
The Group continues to deliver high quality products
for the audiovisual sector, and we are delighted with
the growing relevance Mirada is enjoying in the
market. There has been a substantial improvement in
our EBITDA level, and the Board continues to believe
that the Company is close to a point of sustained profi-
tability. In these difficult times we are grateful to be
working in a business that can continue providing
quality experiences to millions of users, and we would
like to express our sincere gratitude to our fantastic
group of employees, customers, suppliers, partners
and investors.
“Mirada has been able to agree long-
term contracts with key customers with
an increasing revenue component”
FINANCIAL OVERVIEW
Revenue grew to $13.16 million (2019: $12.32 million), a
7% year-on-year increase. Excluding Mirada Connect,
which was sold in July 2019, revenue grew to $12.96
million (2019: 11.49 million), a 13% year-on-year increase.
Growth in development revenue was $1.47million to
reach $7.98 million for the year, driven by the customi-
sation of the Android TV custom launcher for izzi
Telecom.
Gross profit grew to $12.48 million (2019: $11.46 million)
and operating losses reduced to $1.36 million (2019:
$2.91 million). Staff Costs decreased by $0.46 million to
$6.79 million (2019: $7.25 million) and other administra-
tive expenses decreased by $0.20 million to $3.20
million (2019: $3.40 million). The
in
revenues and the reduction in costs led to an adjusted
EBITDA (as defined in Note 8) of $2.50 million (2019:
$0.81 million). There is a tax credit recognised in the
current period of $0.31 million (2019: $0.18 million) as a
result of Mirada Iberia’s research and innovation tax
deductions. As a result, the net impact was the achieve-
ment of net profit for the year of $0.59 million (2019: loss
of $3.11 million).
improvement
increased to $5.05 million (2019: $4.86
Net Debt
million). Long
loans and
interest-bearing
borrowings increased by 40% to $2.40 million (2019:
$1.72 million) and short term borrowings and related
term
party loans and interest decreased to $2.85 million
(2019: $3.26 million) - see note 20 for further details.
Trade receivables increased from $1.89 million to $1.99
million, due to increased revenues and activity at the
end of the fiscal year. A new €1.30 million credit facility
was granted by Leasa Spain, S.L.U., owned by Mr.
Ernesto Luis Tinajero Flores, who also owns 87.21% of
the voting rights of Mirada plc.
intangible assets have
Other
increased by $0.78
million, mainly due to the development of our custom
launcher for Android TV.
The Group generated $1.80 million of cash in operating
activities in the year (2019: cash used in operating
activities of $1.24 million), received $2.61 million from
the disposal of Mirada Connect and spent a further
$4.38 million (2019: $3.07 million) in investing activities.
The operating and investing cash flows were funded by
the movement in net debt explained above. This resul-
ted in an increase in cash and cash equivalents of $0.06
million.
The General Meeting held on 10 September 2019
approved a 100 to 1 share consolidation. The total outs-
tanding share options on 9 September 2019 was
4,148,316 (4,697,166 at 30 September 2018). Therefore, as
of 31 March 2020, the total outstanding share options
was 41,483.
The Company has adopted the following new accoun-
ting standards with effect from 1 April 2019:
IFRS 16- Leases
IFRIC 23 Uncertainty over Income Tax Treatments
Amendments to IFRS 9 Prepayment Features with
Negative Compensation
Amendments to IAS 28 Long-term Interests in Ass
ciates and Joint Ventures
Amendments to IAS 19 Employee Benefits
Annual Improvements to IFRS Standards 2015–2017
Cycle
See note 3 to the financial statements for further infor-
mation on the new IFRS standards.
“Despite the uncertain impact of
COVID-19, Mirada’s financial position
is continuously improving”
17 / CEO St atem en t
17 / CEO St atem en t
CURRENT TRADING & OUTLOOK
Mirada is focused on the Digital TV segment and is
increasing its market reach, with a growing healthy
pipeline of opportunities as a result of the successful
deployment and a wide appraisal of its Iris multi-
platform product for both Linux and Android TV
solutions, and the integration of Netflix. The Company is
now considered to be a top-end solution for potential
customers, with a flexible model that allows audiovisual
companies of any size to provide a competitive offering
for their subscribers.
Despite the uncertain impact of COVID-19, Mirada’s
financial position is continuously improving, reinforced
by the support of its largest shareholder. Together,
these factors have led to an improved commercial
in multiple deals,
performance, with participation
which, combined with the growing pipeline, provides
confidence in the Company’s ability to secure more
contract wins in the coming years.
José-Luis Vázquez
CHIEF EXECUTIVE OFFICER
15th July 2020
18 / CEO Statem ent
18 / CEO Statem ent
STRATEGIC REPORT
“The Company’s main activity is
the provision of software for the
Digital TV market”
BUSINESS MODEL
The Company’s main activity is the provision of software
for the Digital TV market (“Digital TV” segment), after the
disposal in July 2019 of Mirada Connect, the “Mobile
payment” segment, which previously represented 7% of
the revenues of the Group. Our major customers are
Digital TV platforms, composed mainly of Pay TV service
providers. We provide the technology needed to facilita-
te the final user’s interaction with the devices they provi-
de, including digital TV decoders (set-top boxes), tablets,
smartphones, computers, game consoles 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 protec-
tion 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 for their Digital
TV solution. Our expertise is widely recognised in the
industry, and we provide a value that goes beyond our
actual UI proposition. Aside from the professional servi-
ces related to deployment, support and maintenance,
our licencing model varies depending on the size of the
customer, from one-off fees per household for the
product as it is, to recurrent revenues for a Software as a
Service (“SaaS”) model. The Group also historically provi-
ded cashless payment solutions to car park operators
through a revenue-share agreement (Mobile payment
segment) but, as set out above, this division was dives-
ted during the year. Managed services such as quality
assurance on functionality add-ons to platforms are also
provided to customers.
STRATEGY
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
America, Eastern Europe and South East Asia markets.
The aim is to increase the number of customers being
fees, as these
charged subscriber-based
revenues command higher margins and, so 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.
licence
demands
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 its products to satisfy the
cutting-edge
customers, while
maintaining a fair balance between potential growth
and profitability. These include costs incurred towards
developing new functionality such as an increased
presence
search,
Cloud,
recommendation and personalisation functionalities,
and integration with more content providers, chipsets
and device manufacturers. Our continued investment
in Iris is essential in ensuring a proper implementation
of this strategy.
enhanced
the
of
in
“The Group is focused on extending its
presence in markets with higher
potential growth rates”
19 / Strategic Repor t
19 / Strategic Repor t
DEVELOPMENT,
PERFORMANCE AND
POSITION OF BUSINESS
Development, performance and position of our business
have been discussed in the CEO report, with key items
on pages 15 and 16.
PRINCIPAL RISKS AND
UNCERTAINTIES
The key business risks affecting the Group are set out
below. All these risks are consistent and stable compa-
red with the prior year, with the addition of COVID-19.
Dependence on people
The Group recognises the value of the commitment of
its key management personnel and is conscious that it
must keep appropriate reward systems, both financial
and motivational, in place to minimise this area of risk.
Our share option scheme and investment in training are
examples of this. Rotation of key management, conside-
red to be the main measure of risk, is very low as there
have been no changes in the key executive manage-
ment team in the last five years, except for a change in
the Finance Director in November 2015. The Group
invests a significant amount of resources to identify
market practices in our sector and to be up to date on
human resources policies, including employment bene-
fits, remote working and continued internal and exter-
nal training for our employees.
Digital TV and Broadcast markets
The sectors in which the Group operates may undergo
rapid and unexpected changes. It is possible, therefore,
that competitors will develop products that are similar
to those of the Group, or its technology may become
obsolete or less effective. The Group’s success depends
upon its ability to enhance its products and technolo-
gies and develop and introduce new products and
features that meet changing customer requirements
and incorporate technological advances on a timely and
cost-effective basis. As a result, the Group continues to
invest significantly in new product and product impro-
vements, research and development, totaling this year
circa 30% of our revenues, well above market standards.
As most of our market growth is related to Subscription
Video on Demand (SvoD) and OTT services, we have
been able to improve our OTT product line and integrate
20 / Strategic Rep or t
20 / Strategic Rep or t
our services with Netflix at our largest customer, izzi
Telecom, paving the way for potential future integration
in present and future customers.
Information technology
Data security, loss or corruption of data, and business
continuity pose inherent risks for the Group leading to a
loss of customer confidence in the Group being able to
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 backups and
regularly review plans on how to improve data manage-
ment.
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. So far no disputes have been raised and the
Company does not envisage any risks to its own intellec-
tual property. While the Group internally generates its
products and software and strongly believes that it has
not
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.
infringed any third-party
Liquidity Risk
Liquidity risk is managed through the assessment of
short, medium and long term cashflow forecasts to
ensure the adequacy of funding in order to meet the
Group’s working capital requirements. Cash and cash
flow forecasts are regularly reviewed by the Executive
Directors and the Group constantly monitors these to
ensure, among other scenarios, that the Group is able to
meet its liabilities as they fall due. Where a shortfall in
funding is identified the Company will look to meet this
shortfall through a variety of funding options including
but not limited to the issuing of new equity. The Com-
pany relies on the support of its shareholders and has
been able to secure new equity and loan facilities during
prior years from its main shareholder. This area is consi-
dered further in the report of the directors and the
accounting policies under ‘Going concern’.
Customer concentration
Revenues from the main customer represent 72% of the
total turnover. The Company has been reducing this
level from prior years (FY19: 79%), and it has a focus on
generating business with new customers. Revenue
from customers outside the main client increased by
86% to $3.66m in FY20 from $1.79m in FY19.
Brexit
The UK’s exit from the European Union (EU) creates
uncertainty that may impact the performance of our
business. The potential impact includes:
A continued deterioration in customer sentiment
Operational complexity and cost due to restrictions on
the movement of goods and stricter border controls
Costs passed through from our suppliers
Continuity of supply and supplier viability
Import and export duties
Additional regulatory responsibilities and costs
Increased complexity and cost in our international
operations
Specific mitigation plans have been implemented by
Mirada in order to reduce the potential negative impact
on its operational activity and Financial Statements. In
particular, the Company reduced its payroll based in the
UK through the divestment of Mirada Connect Ltd on
4th July 2019 and the closure of its Exeter office on 30th
September 2019.
Economic impact: although our customers have not
experienced yet a reduction of their activities due to the
impact, we cannot
pandemic potential economic
discard that the reduction of purchasing power in their
markets could have an effect on the level of subscrip-
tions and collections. The Group has successfully
progressed to secure early purchase orders from its
main customer and secured extra liquidity in the form
of additional bank loans and extension of loan agree-
ments, as detailed in the CEO’s report.
Costs management: even though the Company has
decided to keep all the employees and their know-how,
all other non-essential costs have been reviewed and
reduced when possible.
Section 172 statement
From 1 January 2019, legislation was introduced requi-
ring companies to include a statement pursuant to
section 172 of the Companies Act 2006.
The Board recognises the importance of the Group’s
wider stakeholders when performing their duties under
Section 172(1) of the Companies Act and their duties to
act in the way they consider, in good faith, would be
most likely to promote the success of the company for
the benefit of its members as a whole, and in doing so
have regard (among other matters) to:
COVID-19
As noted in the CEO’s report, the Group is continuously
monitoring the effects of the COVID-19 pandemic across
the markets in which it operates. This includes regular
meetings of the Management Team assessing the situa-
tion and reflecting on new policies developed by
relevant authorities. Remote working was mandatory for
all employees since the beginning of March, which has
not had a material operational or financial impact on the
Group to the date of this report. The main identified risk
factors associated with the pandemic are the following:
Health issues related to our employees and their
capability to perform their duties: the Group considers
that remote working will reduce the potential risk of
contagion to our employees, although there is always a
risk and we have been identifying those who would have
a higher risk and implementing redundancy processes
to prevent disruptions.
the likely consequences of any decision in the
long term,
the impact of his decisions in the value for
shareholders,
the interests of the company’s employees,
the need to foster the company’s business
relationships with suppliers, customers and partners,
the impact of the company’s operations on the
community and the environment,
the desirability of the company maintaining a reputa-
tion for high standards of business conduct, and
the need to act fairly as between members of
the company.
Psychological effects and morale erosion: a conti-
nued period of isolation and remote working could have
the de-motivational effect and reduce the sense of
belonging of the employees. The Company has increa-
sed regular meetings between the departments, has a
daily Management meeting to coordinate activities, and
has monthly global meetings to try to reduce this risk.
The Board considers that all their decisions are taken
with the long-term in mind, understanding that these
decisions need to regard the interests of the Company’s
shareholders, employees,
relationships with
suppliers, customers, partners, the communities and
the environment in which it operates. It is the view of
the Board that these requirements are addressed in the
its
21 / Strategic Repor t
21 / Strategic Repor t
Corporate Governance Statement, which can be found
on the company’s website at
www.mirada.tv/investors/corporate-governance.
For the purpose of this statement detailed descriptions
of the decisions taken are limited to those of strategic
importance. The Board believes that three decisions
taken during the year fall into this category and were
made with full consideration of both internal and exter-
nal stakeholders:
The decision to dispose Mirada Connect Ltd as a
subsidiary of the Group. The Board considered the views
of both the internal and external stakeholders on this
matter before entering formal discussions with the
buyer, and it was defined a preliminary valuation that
would be considered fair and reasonable. The Board also
consulted advisers and stakeholders about the proper
procedures for the alignment of the management of the
Group, allowing the remaining team to focus on the core
activities of the Company and concentrate on long-term
value generation for all stakeholders.
The decision to propose cancellation of share
premium, which was motivated by the share value
perception, the aim to increase share trading volumes
and the potential reduction of share price volatility. Both
internal and external stakeholders were consulted, and
the resolution was proposed to shareholders at a Gene-
ral Meeting on 10 September 2019.
The decision to migrate the Iris product to
Android TV technology, which has a major impact on
the Company roadmap and is essential to ensure the
presence of the Group in the new generation set-top
boxes opportunities. This project, directly and indirectly,
concentrated the majority of the product investment
for the fiscal year, and it was crucial to be present in the
main customer new generation service proposition. The
project involved conversations with advisers, partners,
shareholders and employees, a careful analysis of the
potential opportunities in the market, the investment to
be made and the impact on employees, partners and
present and future customers, as well as the long-term
value for all stakeholders.
APPROVAL
This strategic report was approved in behalf of the
Board on 15th July 2020 and signed on its behalf.
José-Luis Vázquez
CHIEF EXECUTIVE OFFICER
15th July 2020
22 / Strategic R ep or t
22 / Strategic R ep or t
DIRECTORS’ REPORT
REVIEW OF BUSINESS,
FUTURE DEVELOPMENTS
AND KEY PERFORMANCE
INDICATORS
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 15 to 22.
DIVIDENDS
No dividend is declared in respect of the year (2019: $nil).
FINANCIAL RISK
MANAGEMENT OBJECTIVES
AND POLICIES
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 22 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, 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, its exposure to credit and liquidity risks and
the impact of the COVID-19 pandemic.
As at 31 March 2020, the Group had cash and cash
equivalents of $0.19m (2019: $0.12m), had net current
assets of $0.29m (2019: net current liabilities of $0.70m)
and net assets of $10.55m (2019: $9.98m.). In the year
ended 31 March 2020, the Group generated net cash
from operating activities of $1.80m (2019: net cash used
in operating activities $1.24m), realised a profit for the
year of $0.59m (2019: a loss of $3.11m). Subsequent to the
year end, the Directors are pleased to announce that
they have secured the following additional funding for
the business:
l
l
€1.6m of new loans obtained between April 2020
and June 2020 from banks with 80% of these loans
guaranteed by the Spanish government under the
COVID-19 relief scheme.
An extension to the term of its €1.30 million credit
facility has been granted by Leasa Spain, S.L.U. The
term of the Facility has been extended by 12 months
and now expires on 30 November 2021.
The Directors have prepared detailed cash flow
forecasts for the period to at least 31 December 2021. The
Directors regularly review the detailed forecasts of sales,
costs and cash flows. The assumptions underlying the
forecasts are challenged, varied and tested to establish
the likelihood of a range of possible outcomes, including
reasonable cash flow sensitivities. The expected figures
are carefully monitored against actual outcomes each
month and variances are highlighted and discussed at
Board level. However, the uncertain impact of COVID-19
introduces more risks and uncertainty into this year’s
review. The Group has seen limited impact of COVID-19
on the operational capability of the business. From a
technology point of view, the Group is also offering and
developing the most advanced features in the market,
providing services to a growing subscriber base in our
core markets. To this end a base case cash flow forecast
has been prepared which takes into account the
following key assumptions:
l
l
The continued availability of the Group’s
discounting facility throughout the foreseeable future.
invoice
An average revenue growth of 13% in the foreseeable
future, which Directors believe, comprise of revenue
that is substantially already secured under signed
contracts.
l
Additional net funding of US$1.4m from lenders
l
An expected receipt of US$0.3m of Research and
Development tax credit in March 2021 from Spanish
tax authorities.
The Directors have also considered a number of downside
scenarios, including a scenario where all revenue growth
from new customers is removed, a scenario where no
further funding is obtained in the period and a reverse
stress test. The purpose of the reverse stress test for the
Group is to test at what point the cash facilities would
be fully utilised if the assumptions in the Director’s
base case forecasts are altered. This reverse stress test
23 / Dire c tors' Re por t
includes both a removal of all revenue growth from new
customers and a reduction of contracted revenue from
existing customers for the forecast period, resulting in
an overall reduction of revenue of c.20%, as well as the
removal of any potential future funding and the receipt
of the US$0.3m Research and Development tax credits
anticipated. In the event that the performance of the
Group is not in line with the projections, and more akin
to one of our downside scenarios, including the worst
case scenario, action will be taken by management
immediately to address any potential cash shortfall for
the foreseeable future. The actions that could be taken by
the Directors include both a review and restructuring of
employment related costs, including the deferral of any
potential bonuses due to employees. These measures
alone could save at least $1.0m in operating costs and
therefore cash flows. Further, the Directors could also
negotiate access to other sources of finances from our
lenders. Given the Director’s current relationship with
lenders and their recent success in negotiations with
these financial institutions, whilst there are no binding
agreements currently in place, negotiations are in very
advanced stages for additional funding. Therefore, they
Directors are confident that any additional funding
required would be obtained.
Whilst the cash flow forecasts prepared have been
sensitised to consider a number of downside scenarios,
including the reverse stress test, the Directors are
pleased to note that the post year end performance
of the Group has exceeded the original forecast for
April and May 2020. Therefore demonstrating that the
Group has not suffered negatively from the impact
of COVID-19 and is in a strong place to meet the base
case forecasts.
Overall, the sensitised cash flow forecasts demonstrate
that the Group will be able to pay its debts as they fall due
for the period to at least 31 December 2021. The Directors
are, therefore, satisfied that the financial statements
should be prepared on the going concern basis.
See note 4 to the financial statements for further
information on going concern.
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
The Group continues its development program of
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.
CORPORATE GOVERNANCE
The Board decided to update its current Corporate
Governance policy and adopt the QCA Corporate
Governance Code (April 2018) from 26 September 2018,
and there have not been any changes since then. Details
of the Company’s corporate governance policies and
compliance are available on the Mirada website: https://
www.mirada.tv/investors/corporate-governance/.
Compliance with the Quoted Companies Alliance
Corporate Governance Code
The Quoted Companies Alliance has published a
corporate governance code which includes a standard
of minimum best practice for AIM companies and
recommendations for reporting corporate governance
matters.
Chairman’s Corporate Governance Statement
As a Chairman, my role is to manage the Board in the
best interests of our stakeholders, to ensure that our
shareholders’ views are communicated to the Board
and to be responsible for ensuring the Board’s integrity
and effectiveness. I recognise that my role also involves
my responsibility over the correct implementation of
the QCA Corporate Governance Code into Mirada’s
corporate governance practices.
The Company is managed by the Board of Directors, and
it is the Board’s job to ensure that the Mirada group is
managed for the long-term benefit of all shareholders,
with effective and efficient decision-making. Corporate
governance is an important part of that job, reducing
risk and adding value to our business.
In addition to each of the 10 principles listed further
below, the following provides an overview of how the
Company applies the QCA Corporate Governance Code,
in order to support the Company’s medium to long-
term success.
The Board comprises three Executive and two
independent non-Executive Directors. The Board
24 / Direc tors ' Repor t
considers, after careful review, that the non-Executive
Directors bring an independent judgement to bear
length of service and are
notwithstanding their
therefore both considered independent. The Board has
decided to adopt voluntarily the practice that one third
of the Directors stand for re-election on an annual basis.
I, Francis Coles, the non-Executive Chairman, am
responsible for the running of the Board and corporate
governance. José-Luis Vázquez, the Chief Executive, has
executive responsibility for running the Group’s business
and implementing Group strategy. The Board meets at
least four times per year and has a formal schedule of
matters reserved to it. It is responsible for overall Group
strategy, approval of major capital expenditure projects,
approval of the annual and interim results, annual
budgets and Board structure. It monitors the exposure
to key business risks and reviews the strategic direction
of all trading subsidiaries, their annual budgets, their
performance in relation to those budgets and their
capital expenditure. The Board delegates day-to-
day responsibility for managing the business to the
Executive Directors and the senior management team.
The Board believes that, given its size, there is sufficient
opportunity for shareholders to raise any concerns they
may have with the non-Executive Chairman, the Chief
Executive, the Group Finance Director and the other
Directors.
Our values are based on two cornerstones: our
customers and our employees. The Board believes this
is vital for creating a sustainable, growing business
and is a key responsibility of the Group. This culture
supports the Company’s objectives to grow the
business through acquiring and retaining customers
by attending to their needs from the very beginning of
the sales process until successful delivery and during
ongoing services provision and support. The Company
recognises its employees as a key driver of success and
considers it crucial to recruit and retain the right people
with the appropriate set of skills and values. Corporate
governance is an important part of that job, reducing
risk and adding value to our business.
Francis Coles, Chairman
The QCA Corporate Governance Code sets out ten
principles which should be applied. These are listed
below together with a short explanation of how the
Group applies each of the principles:
1.
Establish a strategy and business model which
promote long-term value for shareholders:
The Mirada Group strategy is focused around four key
areas: market, product, sales, and business model, as
explained fully within the Strategic Report section of
our Report and Annual Accounts.
The Group’s strategy is to extend its presence in
the Digital TV markets, focusing on those with high
potential growth rates, for example the Latin American,
Eastern Europe and South East Asian markets. The aim
is to increase the number of customers being charged
subscriber-based
fees, as these revenues
command higher margins and, as long as the customer’s
subscriber base is growing, Mirada will continue to
earn licence fees even from projects completed several
years previously.
licence
The key challenges to the business and how these are
mitigated are detailed in the Strategic Report.
2. Seek to understand and meet shareholder needs
and expectations:
The Mirada Group encourages two-way communication
with both its institutional and private investors and
responds quickly to all queries received. The CEO talks
regularly with the Group’s major shareholders and
ensures that their views are communicated fully to
the Board.
The Board recognises the AGM and the GMs as
important opportunities to meet private shareholders.
The Directors are available to listen to the views of
shareholders informally immediately following these
meetings. The Group has set up a dedicated email
address for all investor queries. The Board has also
utilised digital technology to present virtually to current
and prospective investors.
line with the
Where voting decisions are not
Company’s expectations, the Board will engage
with those shareholders to understand and address
any issues.
in
3. Take into account wider stakeholder and social
responsibilities and their implications for long-
term success:
The Mirada Group has identified the following key
implementing the
stakeholders and decided on
following actions to cover their needs,
interests
and expectations:
l Employees – company meetings, CEO letters, work
council
l Customers – corporate website, social media,
international trade fairs, personal meetings, high-
and low-level bilateral meetings
l Sales Partners – internal blog, weekly industry press
reviews, weekly follow-up conferences, marketing
material
l Shareholders – see above
25 / Di re c tors' Re por t
l Technological Partners – corporate website, social
media, international trade fairs, personal meetings,
high- and low-level bilateral meetings
l Compliance advisors – periodic conference calls,
advice request when applicable
performance. Relevant information is circulated to the
Directors in advance of meetings. In addition, minutes
of the meetings of the Directors are circulated to the
Group Board of Directors. All Directors are able to take
independent professional advice in the furtherance of
their duties, if necessary, at the Company’s expense.
l Banks – periodic meetings
Mirada identifies its employees as its key asset and puts
a considerable amount of effort into ensuring employee
satisfaction by such measures as improving work-
life balance, providing fringe benefits, team building
activities and many more.
4. Embed effective risk management, considering
both opportunities and threats, throughout the
organisation:
The Board considers risk to the business at every Board
meeting (at least one meeting is held per quarter)
and the risk register is updated at each meeting. The
Company formally reviews and documents the principal
risks to the business at least annually.
Both the Board and senior managers are responsible for
reviewing and evaluating risk and the Executive Directors
meet at least monthly to review ongoing trading
performance, discuss budgets and forecasts and new
risks associated with ongoing trading. This process allows
the Board to gain assurance that the risk management
and related control systems in place are effective.
5. Maintain the board as a well-functioning,
balanced team led by the chair:
The Company is controlled by the Board of Directors.
Francis Coles, the Non-executive Chairman, is responsible
for the running of the Board and José Luis Vázquez, the
Chief Executive, has executive responsibility for running
the Group’s business and implementing Group strategy.
Directors attend one Board Meeting per quarter.
A summary of Board meetings attended by current
Directors in the twelve months to 31 March 2020 is set
out below:
Francis
Coles
Jose Luis
Vazquez
Matthew
Peter Earl
11 Jun 2019
4 Jul 2019
9 Sep 2019
4 Dec 2019
24 Mar 2020
Jose
Francisco
Gozalbo
Gonzalo
Babío
All Directors receive regular and timely information
and financial
about
the Group’s operational
26 / Di rec tors' R ep or t
The Board comprises three Executive Directors and
two Non-Executive Directors. All Executives Directors
work on a full-time basis and the Non-Executive
Director’s service agreements set out expected time
commitments. All Directors recognise that a certain time
of increased activity, the preparation and attendance at
meetings will increase. The Board considers that all Non-
executive Directors bring an independent judgement
to bear notwithstanding the varying lengths of service.
The Directors of Mirada (the “Directors”) have the
following experience and skills:
Francis Coles
Non-Executive Chairman
Frances Coles has nearly 40 years of experience in
corporate finance. He was a founder director of corporate
finance advisory boutique New Boathouse Capital
and later served as a director of AIM listed merchant
bank Quayle Munro following its aquisition of New
Boathouse Capital in 2007. Prior to that, Francis was a
director of Baring Brothers and subsequently Santander
Investment where his responsibilities included debt
and equity fundraisings and merger and acquisition
activities in the European and Latin American markets.
José Luis Vázquez
Chief Executive Officer
José L. Vázquez is CEO and Co-Founder of Fresh, a
leading interactive TV player in the Spanish market.
He holds a degree in Advanced Telecommunication
Engineering (UPM) and an MBA (IESE). He has more
than 15 years of experience in Telecommunication and
Interactivity markets, where he is an skilled professional.
He founded Fresh in year 2000 being the CTO and
became the CEO of the company in 2004. José is one of
the leading figures in the Hispanic Digital TV platforms
markets.
Gonzalo Babío
Chief Financial Officer
Gonzalo Babío has a broad experience in media and
technology sectors. His professional career includes
three years working at Arthur Andersen as an auditor,
ten years at Electronic Arts as Finance Director working
in Madrid, Lisbon, Sao Paulo, Lyon and London, and
ten years as Finance Director for The Walt Disney
Company Iberia in Madrid. He has a degree in Business
Administration from the Universidad de Deusto in
Bilbao, an EMBA from IESE Business School in Madrid
and a PED from IMD in Lausanne.
company and financial experience to the Board such that
it has the capabilities to deliver the Company’s strategy.
José Francisco Gozalbo Sidro
Chief Technology Officer
José joined Mirada as Chief Technology Officer in March
2008, bringing over 18 years of experience in software
development companies. In this role he has been
responsible for software development, quality assurance,
R&D and presales departments. He has a special focus
on the Latin America region and has helped to build
relationships with big telecoms partners that have led
to multiple deployments of Mirada’s products. Prior
to joining Mirada, José was Chief Technology Officer
at Fresh Interactive Technologies where he managed
the deployment of products and services worldwide,
working with some of the key partners in the Pay
TV market.
Matthew Peter Earl
Non-Executive Director
Matthew has spent over 12 years working in the financial
services sector primarily in Equity Capital Markets.
Matthew started his career with Royal Bank of Scotland
plc as an economist before working at Investec plc.
Matthew then joined Charles Stanley Securities as
an equity analyst in the support services sector, until
he moved to head up the business services research
team at Matrix Group Limited in 2010. More recently he
has become an active investor in small and medium
sized businesses.
The Audit Committee and the Remuneration and
Nomination Committee meet formally at least twice
a year. In the year ended 31 March 2020, Francis Coles
and Mathew Earl attended all meetings of the Audit,
Remuneration and Nomination Committees.
6. Ensure that between them the directors have
the necessary up-to-date experience, skills and
capabilities:
The Nomination Committee of the Board oversees the
hiring process and makes recommendations to the
Board on all new Board appointments. Where new Board
appointments are considered the search for candidates
is conducted, and appointments are made, on merit,
against objective criteria. Whilst there is not currently
a balance of genders on the Board, the Company’s
Directors look to appoint individuals with complementary
skills and experience to fulfil the Company’s strategy,
regardless of gender. The Nomination Committee also
considers succession planning.
The skills and experience of the Board are set out in
their biographical details against principle 5 above.
The Directors bring a mixture of relevant sector, public
The directors keep their skillsets up to date by attending
industry and qualification relevant seminars and
training sessions.
The directors seek advice from their corporate advisers
(including the Company’s nominated adviser, lawyers
and accountants) as necessary.
7. Evaluate board performance based on clear
and relevant objectives, seeking continuous
improvement:
The Board carries out an evaluation of its performance
annually, taking into account the Financial reporting
Council’s Guidance on Board Effectiveness. The
company has performed regular reviews of its Board
composition, considering whether each Director has
the appropriate skills for the proper performance of their
duties. The Board is satisfied that each individual has
the right balance of financial and market knowledge
to understand the performance and prospects of the
business for the proper development of the Group.
All Directors undergo a performance evaluation before
being proposed for re-election to ensure that their
performance is and continues to be effective, that where
appropriate they maintain their independence and that
they are demonstrating continued commitment to
the role.
Appraisals are carried out each year with all Executive
Directors.
All continuing Directors stand for re-election every
three years.
8. Promote a corporate culture that is based on
ethical values and behaviours:
Ethical values and behaviours are one of the key
elements of Board members’ appraisals. It also forms an
important part of every employee’s appraisal process,
with a special focus on employees with direct contact
with customers and vendors. Company values are
also included in the welcome package that every new
employee receives upon joining the company, which is
also available for everyone on the Intranet.
9. Maintain governance structures and processes
that are fit for purpose and support good
decision-making by the board:
Our corporate governance statement on structure and
processes is available on our corporate website, AIM Rule
26, Corporate Governance section. Direct link available
here: https://www.mirada.tv/investors/aim-rule-26/
27 / D irec tors' Repor t
10. Communicate how the Company is governed and
is performing by maintaining a dialogue with
shareholders and other relevant stakeholders:
The Company encourages two-way communication
with both its institutional and private investors and
responds quickly to all queries received. The CEO talks
regularly with the Group’s major shareholders and
ensures that their views are communicated fully to
the board.
The Board recognizes the AGM and other GMs as
important opportunities to meet private shareholders.
The Directors are available to listen to the views of
shareholders
immediately following any
General Meeting.
informally,
This situation
is affecting significantly the global
economy, due to disruption or slowdown of supply
in economic
chains and a significant
uncertainty, as shown by an increase of volatility in the
price of assets, exchange rates and a decrease in long
term interest rates.
increase
At the date of issuance of this report it is not possible
to make a reasonable estimation of the current and
future consequences of this crisis on the company. The
Company’s Management will evaluate the impact of
the matters previously described and those that could
be identified in the future on the financial position of
the Company.
DIRECTORS
The directors who held office during the year are given
below:
Executive directors
Mr José-Luis Vázquez Chief Executive Officer
Mr Jose Gozalbo
Mr Gonzalo Babío
Non-executive directors
Mr Francis Coles
Mr Matthew Earl
Non- Executive Chairman
EVENTS SINCE THE
REPORTING DATE
On 11 March 2020, the World Health Organisation
declared
the coronavirus COVID-19 outbreak a
pandemic, due to its fast spread around the World, after
impacting more than 150 countries. Most governments
are taking constraining measures to contain the spread,
which include: isolation, confinement, quarantine and
restrictions to free movement of people, closure of public
and private facilities, except for health and essential
goods, border closures and substantial reduction of air,
sea, and land traffic.
AUDITORS
Each of the persons who are directors at the date of
approval of this report confirms that:
1.
so far as the directors are aware, there is no relevant
audit information of which the auditors are unaware;
and
2. the directors have taken all the steps that they
ought to have taken as directors in order to make
themselves aware of any relevant audit information
and to establish that the auditors are aware of that
information.
This confirmation is given and should be interpreted in
accordance with the provisions of s418 of the Companies
Act 2006.
BDO LLP have expressed their willingness to continue
in office as auditors and a resolution to reappoint them
will be proposed at the forthcoming Annual General
Meeting.
Approved by the Board of Directors and signed on
behalf of the Board:
José-Luis Vázquez
CHIEF EXECUTIVE OFFICER
15th July 2020
28 / Direc tors ' Repor t
AUDIT COMMITTEE REPORT
I am pleased to present the report on behalf of the Audit
Committee.
The Committee is responsible for challenging the
quality of internal and external control and for ensuring
that the financial performance of the Group is properly
reported and reviewed. The Board considers that the
Company is not currently of a size to warrant the need
for an internal audit function although the Board has
put in place internal financial procedures to ensure
close internal controls.
Committee Composition
The members of the Audit Committee are myself,
Francis Coles, as Chair, and Matthew P. Earl both
independent non-executive directors. The Board is of
the view that we have recent and relevant experience.
Meetings are held on average twice a year. José Luis
Vázquez (CEO), and Gonzalo Babío (Finance Director),
attend by invitation. I report to the Board following an
Audit Committee meeting and minutes are available to
the Board.
Committee Duties
The main duties of the Committee are set out below:
l
l
l
Reviewing and recommending to the Board in
relation to the appointment and removal of the
external auditor.
Recommending the external auditor’s remuneration
and terms of engagement.
Reviewing the independence of the external auditors,
the objectivity and the effectiveness of the audit
process, taking into account relevant professional
and regulatory requirements.
l
l
l
Reviewing and monitoring the extent of the non-
audit work undertaken by the Group’s external
auditor.
Reviewing a wide range of financial matters
including the annual and half year results.
Monitoring the controls which ensure the integrity
information reported to the
of the financial
shareholders.
In the financial year commencing on 1 April 2019, the
Group applied the following new accounting standards:
IFRS 16- Leases
IFRIC 23 Uncertainty over Income Tax Treatments
Amendments to IFRS 9 Prepayment Features with
Negative Compensation
Amendments to IAS 28 Long-term Interests in
Associates and Joint Ventures
Amendments to IAS 19 Employee Benefits
Annual Improvements to IFRS Standards 2015–2017
Cycle
External auditor
BDO was reappointed as the Group’s auditor at the
Annual General Meeting held on the 14th January
2020. The Committee considers that its relationship
with the auditor is working well and is satisfied with
their effectiveness.
Francis Coles
CHAIR OF THE AUDIT COMMITTEE
29 / Audit Committee Repor t
NOMINATIONS AND REMUNERATION COMMITTEE REPORT
I am pleased to present the report on behalf of the Remuneration Committee.
The 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:
l the basic salaries and benefits available to executive directors and senior management of comparable companies;
l the need to attract and retain directors and others of an appropriate calibre; and
l the need to ensure all executives’ commitment to the success of the Group.
The members of the Nominations and Remuneration Committees are myself, Francis Coles, as Chair, and Matthew P.
Earl both independent non-executive directors. The Board is of the view that we have recent and relevant experience.
Meetings are held on average twice a year. José Luis Vázquez (CEO), and Gonzalo Babío (Finance Director), attend
by invitation. I report to the Board following a Nomination and Remuneration Committee meeting and minutes are
available to the Board.
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 2020.
Executive
José-Luis Vázquez
Jose Gozalbo Sidro
Gonzalo Babío
Non-executive
Javier Casanueva
Mathew Earl
Francis Coles
Salary & fees
Benefits
$000
$000
288
308
198
—
37
56
3
11
12
—
—
—
2020
Total
$000
291
319
210
—
37
56
2019
Total
$000
273
224
172
9
39
59
887
26
913
776
The directors’ participation in the company’s share option plan is detailed in Note 25 and, as confirmed in Note 9,
there were no contributions paid into a pension scheme for any director.
Francis Coles
CHAIR OF THE NOMINATIONS
AND REMUNERATION COMMITTEE
30 / N omi na ti ons an d Remun erati on Committe Rep or t
STATEMENT OF DIRECTORS’ RESPONSIBILITIES
l
the Company financial statements, state
for
whether applicable UK accounting standards have
been followed, subject to any material departures
disclosed and explained in the financial statements;
l prepare the financial statements on the going
concern basis unless it is inappropriate to presume
that the company will continue in business.
The directors are responsible for keeping adequate
accounting records that are sufficient to show and
explain the company’s transactions and disclose with
reasonable accuracy at any time the financial position
of the company and enable them to ensure that the
financial statements comply with the 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
The directors are responsible for ensuring the annual
report and the financial statements are made available
on the Company’s website. Financial statements are
published on the company’s website in accordance
with legislation in the United Kingdom governing the
preparation and dissemination of financial statements,
which may vary from legislation in other jurisdictions.
The maintenance and integrity of the Company’s
is the responsibility of the directors. The
website
directors’ responsibility also extends to the ongoing
integrity of the financial statements contained therein.
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 financial
statements in accordance with International Financial
(IFRSs) as adopted by the
Reporting Standards
European Union. The Directors have elected to prepare
the Company financial statements
in accordance
with applicable law and United Kingdom Generally
Accepted Accounting Standards (United Kingdom
Generally Accepted Accounting Practice including FRS
101 Reduced Disclosure Framework). Under company
law the directors must not approve the financial
statements unless they are satisfied that they give
a true and fair view of the state of affairs of the group
and company and of the profit or loss of the Group for
that year. The directors are also required to prepare
financial statements in accordance with the rules of the
London Stock Exchange
trading
securities on AIM.
for companies
In preparing these financial statements, the directors
are required to:
l select suitable accounting policies and then apply
them consistently;
l make judgements and accounting estimates that
are reasonable and prudent;
l
for the Group financial statements, state whether
applicable IFRSs have been followed, subject to any
material departures disclosed and explained in the
financial statements;
31 / Statem e nt of Dire c to rs' Re sponsibiliites
INDEPENDENT AUDITOR’S REPORT
TO THE MEMBERS OF MIRADA PLC
OPINION
We have audited the financial statements of Mirada Plc
(the ‘Parent Company’) and its subsidiaries (the ‘Group’)
for the year ended 31 March 2020 which comprise the
consolidated statement of comprehensive
income,
the consolidated statement of financial position,
the company statement of financial position, the
in equity, the
consolidated statement of changes
company statement of changes
the
consolidated statement of cash flows and notes to the
financial statements, including a summary of significant
accounting policies.
in equity,
The financial reporting framework that has been
applied in the preparation of the financial statements
is applicable law and International Financial Reporting
Standards (IFRSs) as adopted by the European Union.
The financial reporting framework that has been applied
in the preparation of the Parent Company financial
statements is applicable law and United Kingdom
Accounting Standards, including Financial Reporting
Standard 101 Reduced Disclosure Framework (United
Kingdom Generally Accepted Accounting Practice).
In our opinion:
l the financial statements give a true and fair view of
the state of the Group’s and of the Parent Company’s
affairs as at 31 March 2020 and of the Group’s profit
for the year then ended;
l the Group financial statements have been properly
prepared in accordance with IFRSs as adopted by
the European Union ;
l the Parent Company financial statements have
been properly prepared in accordance with United
Kingdom Generally Accepted Accounting Practice;
and
l 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.
CONCLUSIONS RELATING TO
GOING CONCERN
We have nothing to report in respect of the following
matters in relation to which the ISAs (UK) require us to
report to you where:
l the Directors’ use of the going concern basis of
in the preparation of the financial
accounting
statements is not appropriate; or
l the Directors have not disclosed in the financial
statements any identified material uncertainties
that may cast significant doubt about the Group’s
or the Parent Company’s ability to continue to adopt
the going concern basis of accounting for a period
of at least twelve months from the date when the
financial statements are authorised for issue.
KEY AUDIT MATTERS
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 a separate opinion on these matters.
32 / I n dep en dent Audito r's Re p or t
Key Audit Matter
Revenue recognition
How we addressed the key audit matter in our audit
The Group’s revenue recognition policy can be
found in note 4d to the financial statements.
A summary of procedures performed to address the risk
include:
Several revenue streams exist across the Group
involving different timings and recognition
entailing a degree of complexity as detailed in
note 4d. Therefore, revenue recognition related
to each deliverable requires judgement over the
assessment of the separate contract deliverables.
We assessed revenue recognition as a fraud risk
as revenue forms the basis for certain of the
Group’s key performance indicators, both in
external communications and for management
incentives. As a result, we consider a significant
risk of material misstatement to arise from the
recognition of revenue throughout the year.
Goodwill and intangible asset impairment
assessment
The accounting policies are detailed in notes 4f,
4g, 4i.
intangibles assets,
The Group continues to be loss making and,
as a result, the Directors have tested goodwill
and
including previously
capitalised development costs, for impairment.
There remains a degree of uncertainty around
expected revenues and profits to be realised
and be sufficient to ensure recoverability of the
assets recognised on the statement of financial
position.
Intangible assets
Determining if an impairment charge is required
for Goodwill and
involves
significant judgements about the future results
and cash flows of the business, including forecast
growth in future revenues and operating profit
margins, as well as determining an appropriate
discount factor and long term growth rate.
Details of these are included in note 14.
We therefore focused on these areas and the
judgements applied to future forecasts.
l A review of the revenue recognition policy for the Group in
light of the requirements of IFRS 15.
l Tested a sample of transactions from the revenue listing by
allocating transaction price to each performance obligation
and checked whether the revenue was recognised
appropriately at a point in time or over time.
l Tested a sample of sales invoices raised before and after
year end to ensure that these were accounted for in the
correct period and accrued for, or deferred, appropriately
by agreeing to supporting evidence.
l Tested completeness of deferred revenue and existence
of accrued revenue by agreeing the sales invoices to cash
receipts and ensuring that revenue was appropriately
recognised during the year.
l For all samples tested our testing included inspection of
the contracts, proof of payments and ensuring revenue
recognition as per the accounting policy. We confirmed
i.e. performance
that the appropriate trigger event
obligation had satisfied in order to ensure that the revenue
recognition criteria had been met.
l We also considered the adequacy of the Group’s disclosures
relating to revenue recognition in note 4d and 6.
Key observations
Based on procedures performed, we did not identify any
evidence of material misstatement in the revenue recognised
in the year.
Our audit procedures involved:
l We checked management’s
impairment assessment
for “Digital TV – Broadcast“ cash generating unit (CGU),
including the discounted cash flow analysis. As part of this,
we challenged the key assumptions, including the growth
rate and discount rates applied. This included consultation
with BDO’s valuations specialists on the appropriate use of
key assumptions i.e. discount rate and growth rate.
l Based on external evidence examined i.e. inflation and
growth rates for similar sized companies, we performed
sensitivity testing on revenue growth and discount rates
used in the impairment assessment to ensure there was
sufficient headroom in their calculation.
l Compared the discounted cash flow analysis to the
historical performance and the actual post year-end results
of the CGU.
l Considered the appropriateness of the disclosure included
in note 14.
Key observations
Based on procedures performed, we did not note any
material issues with the recoverability of the intangible
assets recognised on the balance sheet and concluded that
management’s judgements and disclosures were appropriate.
33 / In dep en dent Aud itor's R epor t
Key Audit Matter
How we addressed the key audit matter in our audit
Going concern assessment
Our audit procedures involved:
l Discussing with management their assessment of the
Group’s ability to continue as a going concern.
l Critically evaluating the revenue and cost projections
underlying the model with reference to market information
as well as past performance of the Group.
l Analysing the projected cash flow and working capital
assumptions;
l Assessing the
impact of COVID-19 on the cash-flow
projections as well as the assumptions and sensitivities
relating to this.
l Performing analysis of changes
in key assumptions
including a reasonable possible (but not unrealistic)
reduction in forecast revenue to understand the sensitivity
in the cash flow forecasts.
l A review of the directors’ statement in note 4(b) of the
financial statements as to whether it is appropriate to adopt
the going concern basis of accounting in preparation of the
financial statements.
Key observations
Covered by the conclusions relating to going concern above
section above.
The Group has continued to make operating
losses in the financial year, which indicates that
there is an elevated risk associated with the
Group’s going concern status.
The financial statements explain in note 4(b) how
the Directors have formed a judgement that it is
appropriate to adopt the going concern basis of
preparation for the Group financial statements.
That judgement is based on an evaluation of the
inherent risks to the Group’s business model and
how those risks might affect the Group’s financial
resources or ability to continue operations over a
period of at least a year from the date of approval
of the financial statements.
in
The Group’s ability to continue as a going
concern has been subject to increased audit
scrutiny
line of the anticipated financial
impact of COVID-19 and its potential impact on
the markets as a whole and the Group in specific.
The Directors have considered the impact of
COVID-19 and have sensitised their forecasts
accordingly.
As the full economic effect on the Group and the
overall economic environment are still uncertain
there is a significant level of judgement involved
in anticipating results.
Due to the high level of judgement involved
in these assessments there exists a risk, that
inappropriate assumptions might be utilised
in the determination of the Group’s ability to
continue as a going concern.
OUR APPLICATION OF MATERIALITY
We apply the concept of materiality in planning and performing our audit and evaluating the effect of misstatement.
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, misstatement
below these levels will not necessarily be evaluated as immaterial as we also take account of the nature of the identified
misstatements, and the particular circumstances of their occurrence when evaluating their effect on the financial
statements as a whole.
34 / In depen dent Aud ito r' s Re por t
We agreed with the audit committee that we would report to the committee all individual audit differences identified
during the course of our Group audit in excess of $10,000 (2019: $9000). We also agreed to report differences below
these thresholds that, in our view, warranted reporting on qualitative grounds.
Group Overall Materiality
$197,000 (2019: $186,000)
Group Performance Materiality
materiality)
(75% of Overall
$148,000 (2019: $139,500)
Basis for Determining (Group and Parent)
Group – 1.5% of Group revenue (2019: 1.5% of revenue).
Parent – 1% of total assets (2019: 1% of total assets)
Rationale for benchmark applied (Group and Parent)
Group – Revenue provides a consistent year on year
basis for determining materiality, is a main KPI and is
a significant driver of profit/loss for the year. In order to
arrive at this judgement, we considered the financial
measures which we believed to be most relevant to the
shareholders in assessing the performance of the Group.
Parent – Total assets has been used as the Company
primarily acts as a holding company for its subsidiaries.
Parent Company Overall Materiality
$88,000 (2019: $113,000)
Parent Company Performance Materiality
$66,000 (2019: $84,500)
Performance materiality was set at 75% (2019 – 75%) of the above materiality figures. 75% is based on our risk
assessment, together with our assessment of the Group’s overall control environment.
COMPONENT MATERIALITY
Each significant component of the Group was audited
to a lower level of materiality which is used to determine
financial statement areas that are included within the
We determined component materiality as follows:
scope of our audit and the extent of sample sizes used
during the audit.
Range of component materialit
45% to 83% 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.
In determining the scope of our audit we considered
the level of work to be performed at each component in
order to ensure sufficient assurance was gained to allow
us to express an opinion on the financial statements
of the Group as a whole. We tailored the extent of the
work to be performed by us at each component based
on our assessment of the risk of material misstatement
at each component. We identified three centrally
controlled components, of which, we have audited
two components. The third significant component is
based in Madrid, Spain and was audited by BDO Spain,
detailed instructions were issued and discussed with
the component auditor.
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.
For the two components not considered significant,
we performed analytical review procedures together
with substantive testing on Group audit risk areas
applicable to those components based on their relative
size, risks in the business and our knowledge of the
entity appropriate to respond to the risk of material
misstatement.
35 / In d epe n d ent Audi tor's Repor t
OTHER INFORMATION
The Directors are responsible for the other information.
The other
information
information comprises the
included in the annual report, other than the financial
statements and our auditor’s report thereon. Our
opinion on the financial statements does not cover the
other information and, except to the extent otherwise
explicitly stated in our report, we do not express any
form of assurance conclusion thereon.
In connection with our audit of the financial statements,
our responsibility is to read the other information and,
in doing so, consider whether the other information is
materially inconsistent with the financial statements
or our knowledge obtained in the audit or otherwise
appears to be materially misstated. If we identify
such material inconsistencies or apparent material
misstatements, we are required to determine whether
there is a material misstatement in the financial
statements or a material misstatement of the other
information. If, based on the work we have performed,
we conclude that there is a material misstatement of
this other information, we are required to report that
fact. We have nothing to report in this regard.
OPINIONS ON OTHER
MATTERS PRESCRIBED BY
THE COMPANIES ACT 2006
In our opinion, based on the work undertaken in the
course of the audit:
l 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
l the Strategic report and the Directors’ report have
been prepared in accordance with applicable legal
requirements.
MATTERS ON WHICH WE ARE
REQUIRED TO REPORT BY
EXCEPTION
In the light of the knowledge and understanding of the
Group and the Parent Company and its environment
obtained in the course of the audit, we have not
identified material misstatements
in the Strategic
report or the Directors’ report.
We have nothing to report in respect of the following
matters in relation to which the Companies Act 2006
requires us to report to you if, in our opinion:
l adequate accounting records have not been kept
by the Parent Company, or returns adequate for our
audit have not been received from branches not
visited by us; or
l the Parent Company financial statements are not in
agreement with the accounting records and returns;
or
l certain disclosures of Directors’
specified by law are not made; or
remuneration
l we have not received all the
information and
explanations we require for our audit.
RESPONSIBILITIES OF
DIRECTORS
As explained more fully in the Statement of directors’
responsibilities set out on page 31, the Directors
are responsible for the preparation of the financial
statements and for being satisfied that they give a
true and fair view, and for such internal control as
the Directors determine is necessary to enable the
preparation of financial statements that are free from
material misstatement, whether due to fraud or error.
In preparing the financial statements, the Directors
are responsible for assessing the Group’s and the
Parent Company’s ability to continue as a going
concern, disclosing, as applicable, matters related to
going concern and using the going concern basis
of accounting unless the Directors either intend to
liquidate the Group or the Parent Company or to cease
operations, or have no realistic alternative but to do so.
AUDITOR’S RESPONSIBILITIES
FOR THE AUDIT OF THE
FINANCIAL STATEMENTS
Our objectives are to obtain reasonable assurance
about whether the financial statements as a whole
are free from material misstatement, whether due
to fraud or error, and to issue an auditor’s report that
includes our opinion. Reasonable assurance is a high
level of assurance, but is not a guarantee that an audit
conducted in accordance with ISAs (UK) will always
detect a material misstatement when it exists.
36 / I n depen dent Auditor' s Rep or t
Misstatements can arise from fraud or error and are
considered material if, individually or in the aggregate,
they could reasonably be expected to influence the
economic decisions of users taken on the basis of these
financial statements.
A further description of our responsibilities for the
audit of the financial statements is located on the
Financial Reporting Council’s website at: www.frc.org.
uk/auditorsresponsibilities. This description forms part
of our auditor’s report.
USE OF OUR REPORT
This report is made solely to the Parent Company’s
members, as a body, in accordance with Chapter 3 of
Part 16 of the Companies Act 2006. Our audit work has
been undertaken so that we might state to the Parent
Company’s members those matters we are required
to state to them in an auditor’s report and for no other
purpose. To the fullest extent permitted by law, we do
not accept or assume responsibility to anyone other
than the Parent Company and the Parent Company’s
members as a body, for our audit work, for this report, or
for the opinions we have formed.
David Butcher (Senior Statutory Auditor)
FOR AND ON BEHALF OF BDO LLP,
STATUTORY AUDITOR
London
United Kingdom
15 July 2020
BDO LLP is a limited liability partnership registered in
England and Wales (with registered number OC305127).
37 / In dep en dent Aud itor's R epor t
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 MARCH 2020
Revenue
Cost of sales
Gross profit
Depreciation
Amortisation
Share-based payment charge
Staff costs
Other administrative expenses
Total administrative expenses
Operating loss
Gain on disposal of Mirada Connect
Non operating profit
Finance income
Finance expense
Foreign currency translation differences
Profit/(loss) before taxation
Taxation
Profit/(loss) for year
Other comprehensive income for the period
Amounts that will or may be reclassified to the profit or loss
Forex on translation of foreign operations
Total comprehensive profit/(loss) for the period
Earning/(loss) per share
Earning/(loss) per share for the year
– basic & diluted
The notes on pages 42 to 75 form part of these financial statements.
Note
2020
$000
2019
$000
6
13,157
12,322
(676)
(857)
12,481
11,465
15,16
(360)
(80)
14
25
9
8
2,7
10
11
12
(3,499)
(3,578)
—
(70)
(6,790)
(7,249)
(3,196)
(3,402)
(13,845)
(14,379)
(1,364)
(2,914)
1,699
1,699
65
(177)
52
275
313
588
—
—
141
(523)
—
(3,296)
184
(3,112)
2,888
(565)
3,476
(3,677)
Year ended
Year ended
31 March 2020
31 March 2019
$
$
13
0.001
(0.006)
38 / Consolida ted Statem en t of Comp reh en si ve In com e
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 31 MARCH 2020
Company number 03609752
Goodwill
Other Intangible assets
Right of use assets
Property, plant and equipment
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
Lease liabilities
Current liabilities
Net current assets/(liabilities)
Total assets less current liabilities
Related parties loans
Interest bearing loans and borrowings
Lease 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
Note
14
14
15
16
17
17
27
19
19
18
18
15
20
20
15
23
24
2020
$000
5,098
6,631
482
228
486
2019
$000
5,924
5,855
—
222
398
12,925
12,399
6,966
185
7,151
20,076
5,421
117
5,538
17,937
(2,820)
(3,257)
(7)
—
(2,019)
(1,958)
(1,785)
(1,019)
(229)
—
(6,860)
(6,234)
291
(696)
13,216
11,703
(1,210)
(1,195)
(259)
—
(1,721)
—
(2,664)
(1,721)
(9,524)
(7,955)
10,552
9,982
12,015
—
18,286
12,015
15,995
15,398
(19,749)
(33,426)
10,552
9,982
These financial statements were approved and authorised for issue on July 15 2020
Signed on behalf of the Board of Directors
José-Luis Vázquez
CHIEF EXECUTIVE OFFICER
The notes on pages 42 to 75 form part of these financial statements.
39 / Co nso lidated Statem ent of Fi nan cial Po sition
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 MARCH 2020
Share
capital
Share
premium
Foreign
exchange
reserve
Merger
reserves
Accumulated
losses
Total
$000
$000
$000
$000
$000
$000
Balance at 1 April 2019
12,015
15,995
10,535
4,863
(33,426)
9,982
Profit for the year
Other comprehensive income
Movement in foreign exchange
Total comprehensive income
for the year
Transactions with owners
—
—
—
—
—
—
—
2,888
2,888
—
—
—
588
588
—
588
2,888
3,476
Share premium cancelation
—
(15,995)
—
—
13,089
(2,906)
Balance at 31 March 2020
12,015
—
13,423
4,863
(19,749)
10,552
Balance at 1 April 2018
Prior Year Adjustment-IFRS 15
(Note 2)
Loss for the year
Other comprehensive income
Movement in foreign exchange
Total comprehensive loss for
the year
Transactions with owners
Share-based payment
Share
capital
Share
premium
$000
2,261
$000
15,760
Foreign
exchange
reserve
$000
11,122
Merger
reserves
Accumulated
losses
Total
$000
$000
$000
4,863
(30,786)
3,220
—
—
—
—
—
—
—
—
—
—
235
—
—
(587)
(587)
—
—
—
—
—
—
—
—
—
—
380
380
(3,112)
(3,112)
22
(565)
(2,710)
(3,297)
70
—
—
70
6,093
3,896
9,982
Conversion of convertible loans
into shares
5,858
Issue of shares
3,896
—
Balance at 31 March 2019
12,015
15,995
10,535
4,863
(33,426)
The notes on pages 42 to 75 form part of these financial statements.
40 / Consolida ted St atem ent o f C han g e s in Eq uity
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 MARCH 2020
Cash flows from operating activities
Profit/(loss) after tax
Adjustments for:
Depreciation of property, plant and equipment
Amortisation of intangible assets
Share-based payment charge
Finance income
Finance expense
Foreign currency translation differences
Taxation
Gain on disposal of Mirada Connect
Operating cash flows before movements in working capital
Increase in trade and other receivables
Increase/(decrease) in trade and other payables
Interest paid
Taxation received
Net cash used in operating activities
Cash flows from investing activities
Interest and similar income received
Purchases of property, plant and equipment
Purchases of other intangible assets
Cash proceeds from sale of Mirada Connect
Net cash used in investing activities
Cash flows from financing activities
Interest and similar expenses paid
Issue of share capital
Payment of principal on lease liabilities
Loans received
Related parties loans received
Repayment of loans
Net cash (used in)/from financing activities
Net decrease 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
The notes on pages 42 to 75 form part of these financial statements.
Note
2020
$000
2019
$000
588
(3,112)
15,16
14
360
80
3,499
3,578
—
(65)
177
(52)
70
(141)
523
—
(313)
(184)
(1,699)
2,495
—
814
(2,011)
(1,654)
1,065
(703)
(14)
265
—
307
1,800
(1,236)
65
(126)
141
(80)
(4,319)
(3,127)
2,605
—
(1,775)
(3,066)
10
16
14
2
11
(163)
(523)
—
3,896
(242)
1,958
1,210
—
1,201
—
(2,824)
(2,150)
(61)
(36)
117
104
185
2,424
(1,878)
1,937
58
117
27
27
27
27
27
27
41 / Co nso lidated Statem e nt of Ca sh F lows
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
YEAR ENDED 31 MARCH 2020
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. CHANGE IN
CONSOLIDATION SCOPE
Main changes for the year ended as at 31 March 2020:
On 5 July 2019, the Group announced the sale of
the wholly owned subsidiary Mirada Connect Ltd. to
PayByPhone UK Limited (subsidiary of Volkswagen
Financial Services, AG), for a consideration of $2.61
million (£2.12 million). As a result, the Group recognised
a gain of $1.70 million as shown in the Consolidated
Income Statement. As a consequence of said disposal,
the results of Mirada Connect Ltd are included as part of
the consolidation scope from 1 April 2019 to the effective
date of disposal. For the purpose of IFRS 5, this is not a
discontinued operation.
3. CHANGES IN ACCOUNTING
POLICIES
a. Adoption of new and revised standards effective
from 1 April 2019
IFRS 16 – Leases
This Standard replaces the following standards: (a)
IAS 17 Leases; (b) IFRIC 4 Determining Whether an
Arrangement Contains a Lease; (c) SIC-15 Operating
Leases – Incentives; and SIC-27 Evaluating the Substance
of Transactions in the Legal Form of a Lease.
IFRS 16 establishes that companies that are lessee
in lease contracts will recognise in the consolidated
balance sheet the liabilities and assets of lease contracts
(except short-term and low-value lease agreements).
Furthermore, the operating lease expense has been
replaced by a charge for straight-line amortisation
of right of use assets and an interest expense on
lease liabilities.
This standard has not introduced significant changes in
the accounting for lease contracts by the lessor.
42 / Notes to th e Cons olidate d Finan c ial St atem e nts
The Group previously classified leases as operating
or finance leases under IAS 17 (refer to Note 26). With
respect to the leases classified as finance leases in
accordance with IAS 17, the book value of the right of
use asset and the lease liability on the date of first-time
application will be the carrying amount of the lease
asset and the lease liability immediately prior to that
date, measured in accordance with IAS 17. With respect
to operating leases, the lessee will record the asset by
right of use and the lease liability in accordance with
this standard as of the date of first-time application.
the
The Group has opted to apply the modified retrospective
approach, without
comparative
restating
information presented as at 31 March 2019 under the
aforementioned standards. On transition to IFRS 16,
the Group elected to apply the practical expedient to
grandfather the assessment of which transactions are
leases. It applied IFRS 16 only to contracts that were
previously identified as leases. Under this option, the
Group has calculated the lease liability as the current
value of the outstanding instalments on the contracts
in force at the date of first-time application determined
on the basis of the incremental interest rates on the
aforementioned date and has recognised the value of
the right-of-use asset for the same amount of the lease
liability calculated at 1 April 2019.
The average incremental borrowing rates for the main
countries affected by this standard, used for calculating
the current value of the rights of use and of the
operating lease liabilities recognised at the date of first-
time application of IFRS 16 are detailed in Note 15.
The right of use and lease liability were defined
according to the original contract term.
the
that
lease
IFRS 16 establishes two exceptions for the
recognition
lease
low-value
included
agreements (amount equal or less than to $5 thousand)
and short-term lease agreement (for a period equal or
less of 12 months). For these cases, the expenditures
are recognised as expense during the term of the lease
agreement. The Group has taken advantage of these
two practical expedients in determining ROU assets
and Lease liability
To calculate this impact, the Group has analysed, among
other factors, the duration of the significant leases
considering whether the agreements can be terminated
early or not and whether or not the durations can be
unilaterally extended by the lessee and, in both cases,
the degree of certainty, which, in turn, depends on the
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
YEAR ENDED 31 MARCH 2020 – CONTINUED
expected use of the assets located in the underlying
properties leased.
following table shows the
The
impact on the
consolidated statement of financial position at 1 April
2019 of application of the standard:
Lease liabilities
Right-of-use assets
IFRS 16
at 1 April 2019
$000
492
492
The following table reflects a reconciliation between the
operating lease commitments presented at 31 March
2019 and the lease liabilities recognised at 1 April 2019:
Operating lease commitments at
31.03.2019 as reported in the Statements
of Financial Position (Note 26)
Impact due to the discount of the
future payments using the incremental
borrowing rate at 1 April 2020
Recognition exemption for short-term at
transition
Recognition exemption for low value at
transition
Lease liabilities recognised at 1 April
2019
Current Lease liabilities recognised at
1 April 2019
Non-current Lease liabilities recognised
at 1 April 2019
1 April 2019
$000
960
(19)
(246)
(203)
492
207
285
There was no material impact on the Consolidated
Statement of Cashflows.
Other new amended standards and Interpretations
issued by the IASB that apply to the financial statements
do not impact the Group as they are either not relevant
to the Group’s activities or require accounting which is
consistent with the Group’s current accounting policies.
These standards are:
IFRIC 23 – Uncertainty over Income Tax Treatments
Amendments to IFRS 9 – Prepayment Features with
Negative Compensation
Amendments to IAS 19 – Employee Benefits
Annual Improvements to IFRS Standards 2015–2017
Cycle
b. Adoption of new and revised standards effective
from 1 April 2020
New Standards, interpretations and amendments
not yet effective
There are a number of standards and amendments to
standards, and interpretations which have been issued
by the IASB that are effective in future accounting
periods that the group has decided not to adopt early.
The most significant of these are as follows, effective
for the period beginning 1 April 2020. The Group is
currently assessing the impact of these new standard
and amendments. The Group does not expect any other
standards issued by the IASB, but not yet effective, to
have a material outcome on the group.
Amendments to IAS 1 and IAS 8
Definition of materiality or with relative importance.
This amendment clarifies the definition of materiality
or relative importance and how it should be applied
by introduction in the definition of guides that until
now have been addressed in other parts of the IFRS
Standards; improving the explanations that accompany
the definition and ensuring that the definition of
materiality or with relative importance is consistent
throughout all IFRS Standards. The Group will consider
the new definition of materiality and do not foresee
significant impact in the preparation of the consolidated
financial statement.
Amendments to IFRS 3 – Business combinations
At the date of authorisation for
issue of these
consolidated financial statements, the amendments to
IFRS 3 – Business combinations have been approved by
the International Accounting Standards Board (IASB).
Amendments to IFRS 3 – Business combinations.
IFRS 3 is amended to limit and clarify the definition
of a business, and to enable a simplified evaluation of
whether a set of activities and assets acquired is a group
of assets instead of a business.
43 / Note s to th e Consol ida ted Fina n c ia l St atem ent s
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
YEAR ENDED 31 MARCH 2020 – CONTINUED
4. SIGNIFICANT ACCOUNTING
POLICIES
a. Basis of accounting
These Group financial statements have been prepared
in accordance with International Financial Reporting
Standards, International Accounting Standards and
Interpretations issued by the International Accounting
Standards Board as adopted by European Union
(“IFRSs”) and with those parts of the Companies Act
2006 applicable to companies preparing their accounts
under IFRSs.
b. 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, its exposure to credit and liquidity risks and
the impact of the COVID-19 pandemic.
As at 31 March 2020, the Group had cash and cash
equivalents of $0.19m (2019: $0.12m), had net current
assets of $0.29m (2019: net current liabilities of $0.70m)
and net assets of $10.55m (2019: $9.98m.). In the year
ended 31 March 2020, the Group generated net cash
from operating activities of $1.80m (2019: net cash used
in operating activities $1.24m), realised a profit for the
year of $0.59m (2019: a loss of $3.11m). Subsequent to the
year end, the Directors are pleased to announce that
they have secured the following additional funding for
the business:
l €1.6m of new loans obtained between April 2020
and June 2020 from banks with 80% of these loans
guaranteed by the Spanish government under the
COVID-19 relief scheme.
l An extension to the term of its €1.30 million credit
facility has been granted by Leasa Spain, S.L.U.The term
of the Facility has been extended by 12 months and now
expires on 30 November 2021.
The Directors have prepared detailed cash flow
forecasts for the period to at least 31 December 2021. The
Directors regularly review the detailed forecasts of sales,
costs and cash flows. The assumptions underlying the
forecasts are challenged, varied and tested to establish
the likelihood of a range of possible outcomes, including
reasonable cash flow sensitivities. The expected figures
are carefully monitored against actual outcomes each
month and variances are highlighted and discussed at
Board level. However, the uncertain impact of COVID-19
introduces more risks and uncertainty into this year’s
review. The Group has seen limited impact of COVID-19
on the operational capability of the business. From a
technology point of view, the Group is also offering and
developing the most advanced features in the market,
providing services to a growing subscriber base in our
core markets. To this end a base case cash flow forecast
has been prepared which takes into account the
following key assumptions:
l The continued availability of the Group’s invoice
discounting facility throughout the foreseeable future.
l An average revenue growth of 13% in the foreseeable
future, which Directors believe, comprise of revenue that
is substantially already secured under signed contracts.
l Additional net funding of US$1.4m from lenders
l An expected receipt of US$0.3m of Research and
Development tax credit in March 2021 from Spanish tax
authorities.
The Directors have also considered a number of downside
scenarios, including a scenario where all revenue growth
from new customers is removed, a scenario where no
further funding is obtained in the period and a reverse
stress test. The purpose of the reverse stress test for the
Group is to test at what point the cash facilities would
be fully utilised if the assumptions in the Director’s
base case forecasts are altered. This reverse stress test
includes both a removal of all revenue growth from new
customers and a reduction of contracted revenue from
existing customers for the forecast period, resulting in
an overall reduction of revenue of c.20%, as well as the
removal of any potential future funding and the receipt
of the US$0.3m Research and Development tax credits
anticipated. In the event that the performance of the
Group is not in line with the projections, and more akin
to one of our downside scenarios, including the worst
case scenario, action will be taken by management
immediately to address any potential cash shortfall for
the foreseeable future. The actions that could be taken by
the Directors include both a review and restructuring of
employment related costs, including the deferral of any
potential bonuses due to employees. These measures
alone could save at least $1.0m in operating costs and
therefore cash flows. Further, the Directors could also
negotiate access to other sources of finances from our
44 / N otes to th e Conso lidated Fin an ci al St atem e nts
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
YEAR ENDED 31 MARCH 2020 – CONTINUED
lenders. Given the Director’s current relationship with
lenders and their recent success in negotiations with
these financial institutions, whilst there are no binding
agreements currently in place, negotiations are in very
advanced stages for additional funding. Therefore, they
Directors are confident that any additional funding
required would be obtained.
Whilst the cash flow forecasts prepared have been
sensitised to consider a number of downside scenarios,
including the reverse stress test, the Directors are
pleased to note that the post year end performance of
the Group has exceeded the original forecast for April
and May 2020. Therefore demonstrating that the Group
has not suffered negatively from the impact of COVID-19
and is in a strong place to meet the base case forecasts.
Overall, the sensitised cash flow forecasts demonstrate
that the Group will be able to pay its debts as they fall due
for the period to at least 31 December 2021. The Directors
are, therefore, satisfied that the financial statements
should be prepared on the going concern basis.
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.
Since the Group has determinate the works incurred
are specific to the customer and cannot be used
on alternative contracts and Mirada has right to
payment for all incurred works, the revenue is
recognised over the time.
2) Sale of licence: Revenue from licences are earned
from two specific and separate streams.
i)
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:
l The software has been provided to the
customer in a form that enables the customer
to utilise it;
See note 4b to the financial statements for further
information on going concern.
l The ongoing obligations of the Group to the
customer are minimal; and
c. 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 2020.
Where the company has control over an investee, it
is classified as a subsidiary. The company controls an
investee if all three of the following elements are present:
power over the investee, exposure to variable returns from
the investee, and the ability of the investor to use its power
to affect those variable returns. Control is reassessed
whenever facts and circumstances indicate that there
may be a change in any of these elements of control.
All intra-group transactions, balances, income and
expenses are eliminated on consolidation.
d. Revenue recognition
Interactive service revenues are divided into 5 types:
development fees, the sale of licences, SaaS, managed
services and self-billing revenues.
1)
Revenues from development fees (which include
set-up fees): these are recognised according to
management’s estimation of the stage of completion
l The amount payable by the customer is
is a reasonable
determinable and there
expectation of payment.
The performance obligation included in this type
of contract is to provide initially licence and key
to access.
ii) Contract licence fees payable by customers are
dependent upon the number of end user subscribers
signing up to the customer’s digital television
service, purchased Set Top Boxes or active devices.
Licences cover the right of use of the software in the
initial conditions without any right to modify it. None
of the contracts have an end or termination date.
Typically, once you sign a contract, you keep using
the software for many years.
For this type of contract, revenues are recognised
by multiplying the individual licence fee by the
net increase in the customer’s subscriber base,
purchased Set Top Boxes or active devices.
The Group promises to grant a licence that provides a
customer with a right to use and obtain substantially all
the benefits from the licence. As a consequence of this,
the recognition of the revenue is at a point in time at
which the licence is granted.
45 / Note s to th e Consolid ate d Fi nan cial St atem ent s
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
YEAR ENDED 31 MARCH 2020 – CONTINUED
3) SaaS: Some of the licence software are under Software
as a Service model (SaaS). Under this model, lower
integration set up fees than in other agreements
are offset by recurrent monthly licence fee revenues.
Revenue for SaaS arrangements are recognised over
the period of the arrangement to reflect the ongoing
service provision. This is on the basis that the Group’s
performance under these services does not create
an asset with an alternative use to the Group and
that the Group has an enforceable right to payment
for performance completed to date.
4) Managed services. Revenue
is measured on a
straight-line basis over the length of the contract i.e.
as and when the service is being provided. Length of
service is pre-defined in the contract and there are
no performance obligations after the contract term
is complete.
5) Transactions revenues: These are earned through a
revenue-share agreement between Mirada Connect
Ltd and the customers for the cashless parking
services which are presented in the Mobile segment.
The Group are informed by the customer of the
amount of revenue to invoice and the revenues are
recognised at a point in time in the period these
parking services happen. Mirada Connect Ltd was
sold in July 2019 to PaybyPhone Ltd, a subsidiary of
the Volkswagen Group.
Where agreements involve multiple obligations, the
entire fee from such arrangements is allocated to each
of the individual obligations based on each obligation’s
fair value. The revenue in respect of each element is
recognised in accordance with the above policies.
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.
e. Business combinations
Acquisitions of businesses are accounted for using
the purchase method. The cost of the acquisition is
measured at the aggregate of the fair values, at the
date of exchange, of assets given, liabilities incurred
or assumed, and equity instruments issued or to be
issued, by the Group in exchange for control of the
acquiree, plus any costs directly attributable to the
business combination. The acquiree’s
identifiable
assets, liabilities and contingent liabilities that meet the
conditions for recognition under IFRS 3 are recognised
at their fair value at the acquisition date.
Goodwill arising on acquisition is recognised as an asset
and initially measured at cost and is accounted for
according to the policy below.
f. Goodwill
Goodwill represents the excess of the cost of acquisition
over the Group’s interest in the fair value of the
identifiable assets and liabilities of the acquired business
at the date of acquisition. Goodwill is initially recognised
as an asset at cost and is subsequently measured at
cost less any accumulated impairment losses.
On disposal of a subsidiary the attributable amount of
goodwill is included in the determination of the profit
or loss on disposal.
For the purpose of impairment testing, goodwill is
allocated to each of the Group’s cash-generating
units expected to benefit from the synergies of tat the
balance sheet datehe 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.
g. 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
Deferred development costs – over a useful life of
3 to 4 years
46 / N otes to th e Consolidate d Finan c ial St atem en ts
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
YEAR ENDED 31 MARCH 2020 – CONTINUED
The amortisation is charged to administrative expenses
in the consolidated income statement. Completed
technology relates to software and other technology
related intangible assets acquired by the Group from a
third party. Deferred development costs are internally-
generated
from work
intangible assets arising
completed by the Group’s product development team.
h. Internally-generated intangible assets – research
and development expenditure
Any internally generated intangible asset arising from
the Group’s development projects are recognised only if
all of the following conditions are met:
l The technical feasibility of completing the intangible
asset so that it will be available for use or sale.
l The intention to complete the intangible asset and
use or sell it.
l The ability to use or sell the intangible asset.
l 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.
l The availability of adequate technical, financial and
other resources to complete the development and
to use or sell the intangible asset.
l
Its ability to measure reliably the expenditure
attributable to the
its
development.
intangible asset during
If a development project has been abandoned, then
any unamortised balance is immediately written off to
the income statement. Where no internally-generated
intangible asset can be recognised, development
expenditure is recognised as an expense in the period
in which it is incurred. The amortisation is charged to
administrative expenses in the consolidated statement
of comprehensive income.
i.
Impairment of non-current assets excluding
deferred tax assets
its tangible and
At each reporting date, the Group reviews the carrying
amounts of
intangible assets to
determine whether there is any indication that those
assets have suffered an impairment loss. If any such
indication exists, the recoverable amount of the asset
is estimated in order to determine the extent of the
impairment loss (if any).
Recoverable amount is the higher of fair value less costs
to sell and value in use. In assessing value in use, 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 asset for which the estimates
of future cash flows have not been adjusted.
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 an expense immediately.
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.
j. Property, plant and equipment
Property, plant and equipment is stated at cost less
accumulated depreciation and any impairment in value.
Depreciation is provided on all property, plant and
equipment, other than freehold land, at rates calculated
to write off the cost, less estimated residual value based
on current prices, of each asset evenly over its expected
useful life, as follows:
– Office & computer equipment
33.3% per annum
– Short-leasehold improvements
10% per annum
The carrying values of property, plant and equipment
are reviewed for impairment if events or changes in
circumstances indicate the carrying value may not be
recoverable. The asset’s residual values, useful lives and
methods are reviewed, and adjusted if appropriate, at
each financial period end.
47 / Note s to th e Con so lidate d Fin an ci al Sta tem e nts
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
YEAR ENDED 31 MARCH 2020 – CONTINUED
k. Right-of-use assets and Lease liabilities (policy
applicable as from 1 April 2019)
On 1 April 2019, the Group adopted IFRS 16, on Leases.
The Group opted to use the modified retrospective
approach on transition which involves applying the
standard retroactively with the cumulative effect from
the date of first application, without restating the
information presented as at 31 March 2019 under the
aforementioned standards.
At the start of a contract, the Group evaluates whether
it contains a lease. A contract is or contains a lease if it
grants the right to control the use of the asset identified
for a period of time in exchange for a consideration. The
length of time during which the Group uses an asset
includes consecutive and non-consecutive periods of
time. The Group only re-assesses the conditions when a
contract is amended.
In contracts with one or more lease and non-lease
components, the Group deems all components as one
sole lease component.
The Group has also chosen to not recognise in the
balance sheet the lease liabilities and the right-of-use
asset corresponding to short term lease agreements
(leases for one year or less) and leases for low value
assets ($5 thousand or less). For this type of contracts,
the Group recognises straight-line payments during the
lease term.
i) Lessee accounting
At the commencement of the lease term, the Group
recognises a right-of-use asset and lease liability. The
right-of-use asset is composed of the amount of the
lease liability, any payment for the lease made on or
prior to the starting date, less any incentives received,
the initial direct costs incurred and an estimate of the
costs for decommissioning or restoration to be incurred,
as indicated in the accounting policy provisions.
The Group measures the lease liability as the present
value of the lease payments which are outstanding at
the commencement date. The Group discounts lease
payments at the appropriate incremental interest rate,
unless the implicit interest rate of the lessor may be
determined reliably.
The pending lease payments are comprised of fixed
payments, less any incentive to be collected, the variable
payments that depend on an index or rate, initially
appraised by the index or rate applicable on the starting
date, the amounts expected to be paid for residual
value guarantees, the price of exercising the purchase
option whose exercise is reasonably certain and any
4 8 / Notes to t h e Conso lidate d Finan cial St atem en ts
compensation payments for contract termination,
providing the term of the lease reflects the termination
option.
The Group measures the right-of-use assets at cost, less
depreciation and accrued impairment losses, adjusted
by any re-estimate of the lease liability.
If the contract transfers ownership of the asset to the
Group at the end of the lease term or if the right-of-
use asset includes the price of the purchase option, the
depreciation criteria indicated in Note 4.j are applied
from the lease commencement date until the end of the
useful life of the asset. Otherwise, the Group depreciates
the right-of-use asset from the commencement date
until the date of the useful life of the right or the end of
the lease term, whichever is the earlier.
The Group applies the criteria for impairment of non-
current assets set out in Note 4.i to right-of-use assets.
The Group measures the lease liability increasing it by
the interest accrued, decreasing it by the payments
made and re-assessing the carrying amount due to any
amendments to the lease or to reflect any reviews of the
in-substance fixed lease payments.
The Group records any variable payments that were
not included in the initial valuation of the liability in the
Consolidated Income Statement for the period in which
the events resulting in payment were produced.
The Group records any re-assessments of the liability
as an adjustment to the right-of-use asset, until it is
reduced to zero, and subsequently in the Consolidated
Income Statement.
The Group re-assesses the lease liability discounting
the lease payments at an updated rate, if any change
is made to the lease term or any change in the
expectation of the purchase option is being exercised
on the underlying asset.
The Group re-assesses the lease liability if there is
any change in the amounts expected to be paid for a
residual value guarantee or any change in the index
or rate used for determining payments, including any
change for reflecting changes in market rents once
these have been reviewed.
The Group recognises an amendment to the lease as
a separate lease if it increases the scope of the lease
by adding one or more rights of use and the amount
of consideration for the lease increases by an amount
consistent with the individual price for the increased
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
YEAR ENDED 31 MARCH 2020 – CONTINUED
scope and any adjustment to the individual price to
reflect the specific circumstances of the contract.
If the amendment does not result in a separate lease,
on the amendment date the Group assigns the
consideration to the amended contract as indicated
above, it re-determines the term of the lease and re-
estimates the value of the liability discounting the
revised payments at the revised interest rate. The Group
writes down the carrying amount of the right-of-use
asset to reflect the partial or total end of the lease in
any amendments that reduce the scope of the lease
and it records the profit or loss in income. For all other
amendments, the Group adjusts the carrying amount
of the right-of-use asset.
the provision is based on whether there has been a
significant increase in credit risk since initial recognition
of the financial asset. For those where the credit risk
has not increased significantly since initial recognition
of the financial asset, 12 month expected credit losses
along with gross interest income are recognised. For
those for which credit risk has increased significantly,
lifetime expected credit losses along with the gross
interest income are recognised. For those that are
determined to be credit impaired, lifetime expected
credit losses along with interest income on a net basis
are recognised.
The provision
losses against
for expected credit
receivables from related parties were not material and
no charge is made in the current and last year.
l. Financial instruments
Financial assets and financial liabilities are recognised
on the Group’s statement of financial position at
fair value when the Group becomes a party to the
contractual provisions of the instrument.
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.
Trade receivables
Trade receivables are initially recognised at fair value
plus transaction costs that are directly attributable to
their acquisition or issue, and subsequently measured
at amortised cost using effective interest method less
provision from impairment
liabilities and equity
Financial liabilities and equity instruments
instruments are
Financial
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.
receivables
Trade
customers in the normal course of business.
represent amounts due
from
Equity instruments issued by the Company are recorded
at the proceeds received, net of direct issue costs.
The group applies the IFRS 9 simplified approach to
measuring expected credit losses which uses a lifetime
expected credit loss allowance for all trade receivables
and contract assets. During this process the probability
of non-payment of a trade receivable balance is assessed
and multiplied by an expected amount of credit loss
as a result of the likely credit default. The group has
set up a matrix using the age a debtor is overdue and
any likely events as a criteria to determine the default
probability. This uses 5 categories ranging from 0% to
90% probability.
The Group only have assets that are categorised as
amortised cost and the application of ECL has not
had a material impact to the impairment provision. As
a conclusion, the impact of the IFRS 9 on the Group
was immaterial.
Impairment provisions for receivables from related
parties and loans to related parties are recognised
based on a forward looking expected credit loss model.
The methodology used to determine the amount of
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.
49 / Notes to th e Co nsolid ate d Fi nan ci al St atem e nts
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
YEAR ENDED 31 MARCH 2020 – CONTINUED
Invoice discounting
The Group has an invoice discounting facility secured
on the trade debtors as specified in Note 17. Liabilities
under this arrangement are shown in borrowings.
Trade payables
Trade payables are initially measured at fair value, and
are subsequently measured at amortised cost, using
the effective interest rate method.
m. Employee share incentive plans
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.
n. Leases (policy applied through 1 April 2019)
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.
o. 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.
If the Group considers it is likely that the tax authority
will accept an uncertain tax treatment, the Group will
establish the taxable gain (loss), the tax bases, unused
tax losses, unused tax credits or the tax rates consistent
with the tax treatment used or intended to be used in
its income tax returns.
If the Group considers it unlikely that the tax authority
will accept an uncertain tax treatment, the Group will
reflect the effect of the uncertainty to establish the
taxable gain (loss), the tax bases, unused tax losses or
credits or the corresponding tax rates. The Group will
reflect the effect of the uncertainty for each uncertain
tax treatment by using the most likely amount or the
expected value of the probability weighted amounts.
liabilities
Deferred tax is the tax expected to be payable or
recoverable on differences between the carrying
amounts of assets and
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 all taxable temporary
differences and deferred tax assets are recognised
to the extent that it is probable that taxable profits
will be available against which deductible temporary
differences can be utilised. Such assets and liabilities are
not recognised if the temporary difference arises from
the initial recognition of goodwill or from the initial
recognition (other than in a business combination) of
other assets and liabilities in a transaction that affects
neither the tax profit 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.
50 / N otes to th e Cons olidate d Finan c ial St atem ents
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
YEAR ENDED 31 MARCH 2020 – CONTINUED
p. Research and development tax credit
Companies within the group may be entitled to claim
special tax allowances in relation to qualifying research and
development expenditure (e.g. R&D tax credits). The group
accounts for such allowances as tax credits and recognise
them when it is probable that the benefit will flow to the
group and that benefit can be reliably measured. R&D tax
credits reduce current tax expense and, to the extent the
amounts due in respect of them are not settled by the
balance sheet date, reduce current tax payable.
or an expense in the period in which the operations is
disposed of.
Goodwill and fair value adjustments arising on the
acquisition of a foreign entity are treated as assets and
liabilities of the foreign entity and translated at the
closing rate. The Group has elected to treat goodwill and
fair value adjustments arising on acquisitions before
the date of transition to IFRS as sterling denominated
assets and liabilities.
q. 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.
Differences between contributions payable
in the
period and contributions actually paid are shown as
either accruals or prepayments in the statement of
financial position.
r. Foreign exchange
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 is 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 transactions are used.
Exchange differences arising on
the
opening statement of financial position and the current
year income statements are classified as equity and
transferred to the Group’s foreign exchange reserve.
Such translation differences are recognised as income
translating
5. CRITICAL ACCOUNTING
JUDGEMENTS AND KEY
SOURCES OF ESTIMATION
UNCERTAINTY
In the application of the Group’s accounting policies,
which are described in notes 3 and 4, the directors
are required to make judgements, estimates and
assumptions about the carrying amounts of assets
and liabilities that are not readily apparent from other
sources. The estimates and associated assumptions are
based on historical experience and other factors that
are considered to be relevant. Actual results may differ
from these estimates.
The estimates and underlying assumptions are reviewed
on an ongoing basis.
a. Key judgements
The following are the critical judgements that the
in the process of applying
directors have made
the Group’s accounting policies that has the most
significant effect on the amounts recognised in the
financial statements.
l Presenting financial information in USD
The reporting currency is US Dollar due to the growing
exposure to the US Dollar, as all major contracts and
most of the new potential deals for the Company are
denominated in this currency. The board therefore
believes that USD financial reporting provides the
best presentation of the group’s financial position,
funding and treasury functions, financial performance
and its cash flows. Coupled with the evolution of the
business, the group’s shareholder base is now largely
comprised of investors to whom financial reporting in
GBP is of limited relevance. Internally, the board also
bases its performance evaluation and many investment
decisions on USD financial information.
51 / Notes to th e Con so lidate d Fina n cia l St atem ent s
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
YEAR ENDED 31 MARCH 2020 – CONTINUED
l Capitalised development costs
Any internally generated intangible asset arising from
the Group’s development projects are recognised only
once all the conditions set out in the accounting policy
Internally Generated Intangible Assets (refer to Note
3.h) are met. The amortisation period of capitalised
development costs is determined by reference to the
expected flow of revenues from the product based on
historical experience. Furthermore, the Group reviews,
at the end of each financial year, the capitalised
development costs for each product for indications
of any loss of value compared to net book value at
that time. This review is based on expected future
contribution less the total expected costs.
The Group capitalises spend on development of 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 of the assets involved.
b. Key sources of estimation uncertainty
l
Impairment of goodwill and intangibles
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, the outcome of
negotiations may vary materially from management
expectation. See Note 14 for more details.
6. REVENUE FROM CONTRACTS WITH CUSTOMERS
Year to 31 March 2020
Development
Transactions
Licenses
Managed
services
Mexico
Europe
Other Americas
Asia
Revenue recognised over a period
Revenue recognised at a point in time
Year to 31 March 2019
Mexico
Europe
Other Americas
Asia
Revenue recognised over a period
Revenue recognised at a point in time
$000
5,642
627
1,046
668
7,983
7,923
60
7,983
$000
5,065
381
913
148
6,507
6,182
325
6,507
$000
—
193
—
—
193
—
193
193
$000
—
833
—
—
833
—
833
833
$000
2,945
10
569
247
3,771
—
3,771
3,771
$000
3,964
73
17
—
4,054
—
4,054
4,054
Licenses revenue are including both contract licenses and SaaS revenue.
52 / Notes to th e Conso lidate d Finan c ial St atem e nts
Total
$000
9,688
939
1,615
915
13,157
9,133
4,024
13,157
$000
9,798
1,446
930
148
12,322
7,110
5,212
$000
1,101
109
—
—
1,210
1,210
—
1,210
$000
769
159
—
—
928
928
—
928
12,322
Contract balances
The following table provides information about contract assets (included as accrued income) and contract liabilities
(included as deferred income) from contracts with customers:
Contract assets (accrued income)
Contract liabilities (deferred income)
The movement in the contract assets and liabilities during the year is set out below:
At 1 April
Transfers in the period from contract assets to trade receivables
Excess of revenue recognised over cash (or rights to cash) recognised during the period
At 31 March
At 1 April
Amounts included in contract liabilities recognised as revenue in the period
Cash received in advance of performance and not recognised as revenue during the
period
At 31 March
31 March 2020 31 March 2019
$000
3,478
1,785
5,263
$000
1,891
1,019
2,910
Contract assets
31 March 2020 31 March 2019
$’000
1,891
(1,891)
3,478
3,478
$’000
989
(989)
1,891
1,891
Contract liabilities
31 March 2020 31 March 2019
$’000
1,019
$’000
1,360
(1,019)
(1,360)
1,785
1,019
1,785
1,019
Contract assets (‘accrued income’) and contract liabilities (‘deferred income’) are included within ‘Trade and other
receivables’ and ‘deferred income’ respectively on the face of the Statement of Financial Position. They arise from the
Group’s revenue contracts, where work has been performed in advance of invoicing customers, and where revenue
is received in advance of work performed. Cumulatively, payments received from customers at each balance sheet
date do not necessarily equate to the amount of revenue recognised on the contracts.
7. 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.
53 / Note s to th e Con so lid ated Finan c ia l St atem ent s
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSYEAR ENDED 31 MARCH 2020 – CONTINUED
Segmental results for the year ended 31 March 2020 are as follows:
March 2020
Revenue
Segmental profit/(loss)
(Adjusted EBITDA, see note 8)
Gain on disposal of Mirada Connect
Finance income
Finance expense
Depreciation
Amortisation
Foreign currency translation differences
Digital TV &
Broadcast
Mobile
Other
Group
$000
$000
$000
12,963
2,392
—
—
—
(358)
(3,499)
—
194
16
1,699
—
—
(2)
—
—
—
87
—
65
(177)
—
—
52
27
$000
13,157
2,495
1,699
65
(177)
(360)
(3,499)
52
275
Profit / (Loss) before taxation
(1,465)
1,713
$0.087 million (2019: $0.100 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 2019 are as follows:
March 2019
Revenue –
Segmental profit/(loss)
(Adjusted EBITDA, see note 8)
Finance income
Finance expense
Depreciation
Amortisation
Share-based payment charge
Profit / (Loss) before taxation
Digital TV &
Broadcast
$000
11,490
1,905
—
—
(70)
(3,578)
—
Mobile
Other
Group
$000
832
171
—
—
(10)
—
—
$000
—
(1,262)
141
(523)
—
—
$000
12,322
814
141
(523)
(80)
(3,578)
(70)
(70)
(1,743)
161
(1,714)
(3,296)
There is no material inter-segment revenue.
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 $9.5 million of $13.16m total revenue. This is approximately 72% of all
revenue (2019: $9.7 million, out of $12.4m) of the total Group revenues.
54 / Notes to th e Cons olidated Fi nan c ial Statem e nts
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSYEAR ENDED 31 MARCH 2020 – CONTINUED 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
Assets 2020 Liabilities 2020
Assets 2019 Liabilities 2019
$000
14,488
$000
9,328
$000
11,360
$000
7,675
5,098
490
5,588
—
196
196
5,924
653
6,577
—
279
279
Total Group assets and liabilities
20,076
9,524
17,937
7,954
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
Revenues by Products:
Development
Transactions
Licenses
Managed Services
External revenue by #location
of customer
Total assets by
location of assets
2020
$000
2019
$000
9,688
9,799
2020
$000
34
2019
$000
23
939
1,615
915
1,445
20,042
17,914
930
148
—
—
—
—
13,157
12,322
20,076
17,937
Digital TV &
Broadcast
2020
$000
7,983
193
3,771
1,210
Mobile
2020
$000
—
—
—
—
Digital TV &
Broadcast
2019
$000
6,508
832
4,054
928
Mobile
2019
$000
—
—
—
12,964
193
11,490
832
55 / Note s to th e Consol idate d Fi na n ci al Sta tem ents
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSYEAR ENDED 31 MARCH 2020 – CONTINUED 8. OPERATING LOSS
This has been arrived at after charging:
Depreciation of owned assets (notes 15 and 16)
Amortisation of intangible assets (note 14)
Operating lease charges
2020
$000
360
3,499
339
2019
$000
80
3,578
596
Total R&D expenditure capitalised as intangible assets amounts to $4.35m (2019: $3.12m).
The total lease expense not subject to IFRS 16 for short-term as well as low-value leases amounts to $0.339 (refer to
Note 15).
Analysis of auditors’ remuneration is as follows:
Fees payable to the company’s auditor for the audit of the company’s annual accounts
Audit of the account of subsidiaries
2020
$000
65
25
2019
$000
119
36
Reconciliation of operating profit for continuing operations to adjusted earnings before interest, taxation,
depreciation and amortisation:
Operating loss
Depreciation
Amortisation
Operating profit before interest, taxation, depreciation, amortisation, impairment
(EBITDA)
Share-based payment charge
Adjusted EBITDA
9. STAFF COSTS AND EMPLOYEE INFORMATION
Staff costs (including directors) comprise:
Wages and salaries
Social security costs
Other pension costs
Share based payments
Staff costs
2020
$000
2019
$000
(1,364)
(2,914)
360
3,499
2,495
—
2,495
Group
2020
$000
9,037
2,066
41
—
80
3,578
744
70
814
Group
2019
$000
8,577
1,796
33
70
11,144
10,476
Contained within staff costs are amounts capitalised as intangible assets totalling $4,354 (2019: $3,115), with $6,790
(2019: $7,249) charged to administrative expenses.
56 / Notes to th e Co nso lid ated Fin an c ial St atem e nts
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSYEAR ENDED 31 MARCH 2020 – CONTINUED 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
2020
2019
12
152
9
173
12
142
9
163
The average number of persons, including executive directors, employed by the Company during the year was 9
(2019: 8) 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 2, the Director of
Business Development and the Sales Director.
Salaries and fees
Social Security costs
Other benefits
Share-based payments
Directors remuneration
The emoluments received by the directors who served during the year were as follows:
Executive directors
Aggregate emoluments
Non-Executive directors
Aggregate emoluments
2020
$000
1,325
67
46
—
2019
$000
1,037
65
44
52
1,438
1,198
2020
$000
2019
$000
820
669
93
913
107
776
The directors’ remuneration is disclosed in the Nominations and Remuneration Report on page 30.
Emoluments payable to the highest paid director are as follows:
Aggregate emoluments
2020
$000
319
2019
$000
273
There were no Company contributions to the pension scheme or benefits on behalf of the highest paid director.
57 / Note s to th e Consol idate d Fi nan ci al St atem e nt s
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSYEAR ENDED 31 MARCH 2020 – CONTINUED 10. FINANCE INCOME
Interest received on bank deposits
11. FINANCE EXPENSE
2020
$000
65
65
2019
$000
141
141
Finance expenses exclude all fees directly incurred to facilitate borrowing. These include professional fees paid to
bank arrangement fees and fees to secure required guarantees.
2020
$000
122
41
14
177
2019
$000
221
302
—
523
2020
$’000
2019
$’000
(1)
(312)
(313)
(113)
(71)
(184)
—
—
—
—
(313)
(184)
Bank interest payable
Interest on loans from related parties
Interests on lease liabilities
12. TAXATION
Analysis of tax credit for the year
Current tax
UK tax for the current financial year
Foreign tax on income for the year
Total current tax (credit)
Deferred tax
Origination and reversal of temporary differences
Adjustment in respect of prior periods
Total deferred tax (credit)
Total tax (credit) for the year
58 / Notes to th e Conso lid ated Fin an c ial Statem e nts
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSYEAR ENDED 31 MARCH 2020 – CONTINUED The tax assessed on the loss on ordinary activities for the period differs from the standard rate of tax of 19% (2019-
19%). The differences are reconciled below:
Profit/(loss) before taxation
Loss on ordinary activities multiplied by 19% (2019: 19%)
Losses carried forward/(utilised)
Witholding Taxes
Total current tax
Subtotal
Tax benefit from research and development expenditure
Foreign exchange
Total tax credit
Deferred Taxation
Deferred taxation amounts not recognised are as follows:
Losses
Research & Development Tax Credits, Useable against future profits
Balance at the end of the year
2020
$000
275
52
(52)
112
112
112
(486)
61
(313)
2019
$000
(3,296)
(626)
626
321
321
321
(462)
(43)
(184)
Group
2020
$000
Group
2019
$000
16,828
16,880
2,722
2,868
19,550
19,748
The gross value of tax losses carried forward at 31 March 2020 equals $78.6 million (2019: $78.7 million).
13. EARNINGS PER SHARE
Profit/(loss) for year
Weighted average number of shares
Basic loss per share
Diluted loss per share
Year ended
31 March 2020
Total
Year ended
31 March 2019
Total
$588,607
$(3,111,688)
890,843,408 520,652,606
$0.001
$(0.006)
$0.001
$(0.006)
After the cancellation of share premium approved by the General Meeting on 10 September 2019, the Company has
41,483 (2019: 4,697,166) potentially dilutive ordinary shares arising from share options issued to staff. However, in 2020
and 2019 the profit/(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.
59 / Note s to th e Co nsoli dated Fin an cial Sta tem en ts
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSYEAR ENDED 31 MARCH 2020 – CONTINUED 14. INTANGIBLE ASSETS
Cost
At 1 April 2018
Additions
Foreign exchange
At 31 March 2019
At 1 April 2019
Additions
Disposal
Foreign exchange
At 31 March 2020
Accumulated amortisation and impairment
At 1 April 2018
Provided during the year
Foreign exchange
At 31 March 2019
At 1 April 2019
Provided during the year
Foreign exchange
At 31 March 2020
Net book value
At 31 March 2020
At 31 March 2019
At 31 March 2018
Deferred
development
costs
Completed
Technology
Total
Intangible
assets
Goodwill
$000
$000
$000
$000
24,173
3,116
1,897
26,070
41,977
11
3,127
—
(2,252)
(147)
(2,399)
(3,128)
25,037
25,037
4,314
—
(369)
1,761
1,761
5
—
26,798
38,849
26,798
38,849
4,319
—
—
(688)
(69)
(438)
(1,690)
28,982
1,697
30,679
36,471
17,326
3,455
(1,502)
19,279
19,279
3,455
(328)
1,672
18,998
35,485
123
(131)
1,664
1,664
44
(66)
3,578
—
(1,633)
(2,560)
20,943
20,943
3,499
32,925
32,925
—
(394)
(1,552)
22,406
1,642
24,048
31,373
6,576
5,758
6,847
55
97
225
6,631
5,855
7,072
5,098
5,924
6,492
The key assumptions for the value in use calculations are those regarding the discount rate applied, and the forecast
sales growth in a five year budget period approved by management. Management estimates discount rates using
pre-tax rates that reflect current market assessments of the time value of money and the risks specific to the CGUs.
The cash flow forecast has been prepared with revenue being forecast per customer based on historical performance
of the business.
There is 1 CGUs that has been assessed for impairment, being Digital TV – Broadcast. The sales growth forecasts are
based on current contracts and management’s estimate of revenues relating to opportunities that are currently
being pursued. CGUs defined is: “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. 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 the CGU is 10% (2019: 10%). A 2% increase/decrease to the discount rate does not result in an impairment. A
10% decrease in the five years cash flow and terminal value forecast for both CGUs does not result in an impairment.
A perpetual rate of 2% (2019: 1.5%) has been used in the impairment assessment. Even without perpetual rate, no
impairment is required. If WACC had increased to 87%, the CGU would have impaired.
60 / Notes to th e Conso lidated Fin an ci al St atem en ts
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSYEAR ENDED 31 MARCH 2020 – CONTINUED During the current and last financial periods, no impairment has been recognised. The split of goodwill by CGU is
as follows:
Digital TV – Broadcast
Connect
Group
2020
$000
5,098
—
5,098
Group
2019
$000
5,199
725
5,924
On 5 July 2019, the Group announced the sale of the wholly owned subsidiary Mirada Connect Ltd. to PayByPhone
UK Limited (subsidiary of Volkswagen Financial Services, AG), for a consideration of $2.36 million (£2.12 million). As a
result, the Group recognize a gain of $1.70 million as shown in the Consolidated Income Statement. As a consequence
of said disposal, the results of Mirada Connect Ltd are included as part of the consolidation scope from 1 April 2019
to the effective date of disposal.
15. RIGHT-OF-USE ASSETS AND LEASE LIABILITIES
On 1 April 2019, the Group adopted IFRS 16 on Leases (refer to Note 3.a). The breakdown of changes in right-of-use
assets for the year ended as at 31 March 2020 is as follows:
Cost
Balance at 31 March 2019
First application IFRS 16 (Note 3.a)
Balance at 1 April 2019
Additions
Foreign exchange
Balance at 31 March 2020
Amortization
Balance at 1 April 2019
Provided during the year
Balance at 31 March 2020
Balance at 31 March 2019
Balance at 1 April 2019
Balance at 31 March 2020
Short term
leasehold
improvements
$000
—
492
492
249
(10)
731
—
(249)
(249)
–
492
482
Of the total amount of rights-of-use assets at 31 March 2020, $0.301 m correspond to buildings and $0.181 m to
vehicles.
Regarding to the lease contracts, the Group has a dispersed portfolio. The average duration of property lease
contracts is 2 years, and 3 years for vehicles.
The right-of-use has been defined according to the duration of the contract in force for each asset.
61 / Notes to th e Con so lidated Finan cial Sta tem en ts
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSYEAR ENDED 31 MARCH 2020 – CONTINUED
The liabilities recognized as a consequence of the IFRS 16 first application as of 1 April 2019 (refer to Note 3.a) are
included in the heading “Lease liabilities”. The breakdown of changes in lease liabilities for the year ending at
31 March 2020 is as follows:
Balance at 31 March 2019
First application IFRS 16 (Note 3.a)
Balance at 1 April 2019
Additions
Write offs
Finance expense (Note 11)
Foreign exchange
Balance at 31 March 2020
$000
–
492
492
248
(256)
14
(10)
488
The analysis of the contractual maturity date of the lease liabilities, including the current interest, is as follows:
Currency
Interest Rate
Less than
one year
1 to 3 years
More than
3 years
2020
$000
Lease liabilities
EUR
3%
229
229
216
216
43
43
Total
488
488
The average incremental discount rates for the main countries affected by this standard, used for calculating the
current value of the rights of use and lease liabilities recognised at the date of first-time application of IFRS 16 were
as follows:
Spain
Average rate
Average rate
Between 1
and 3 years
More than
3 years
3%
3%
As indicated in Note 3.a, the Group has chosen to not recognise in the balance sheet the lease liabilities and the
right-of-use asset corresponding to short term lease agreements and leases for low value assets. Those exceptions
have been recorded entirely under the heading of operating leases. The total lease expense not subject to IFRS 16
for short-term as well as low-value leases amounts to $0.339 m (refer to Note 8).
62 / Notes to th e Consolidate d Finan c ial St atem e nts
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSYEAR ENDED 31 MARCH 2020 – CONTINUED
16. PROPERTY, PLANT AND EQUIPMENT
Cost
At 1 April 2018
Additions
Foreign exchange
At 31 March 2019
At 1 April 2019
Additions
Disposals
Foreign exchange
At 31 March 2020
Amortisation
At 1 April 2018
Provided during the year
Foreign exchange
At 31 March 2019
At 1 April 2019
Provided during the year
Disposals
Foreign exchange
At 31 March 2020
Net book value
At 31 March 2020
At 31 March 2019
Office and
computer
equipment
Short term
leasehold
improvements
Total
$000
$000
$000
1,205
80
(98)
1,187
1,187
126
(30)
(36)
1,247
1,027
64
(78)
1,013
1,013
67
(24)
(35)
1,021
226
174
146
—
(10)
136
136
—
(9)
(6)
121
77
16
(5)
88
88
44
(6)
(7)
119
2
48
1,351
80
(108)
1,323
1,323
126
(39)
(42)
1,368
1,104
80
(83)
1,101
1,101
111
(31)
(42)
1,140
228
222
63 / Note s to th e Co nsolid ate d Fin an ci al St atem e nts
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSYEAR ENDED 31 MARCH 2020 – CONTINUED 17. TRADE & OTHER RECEIVABLES
Trade receivables
Other receivables
R&D tax credit
Contract assets
Prepayments
Non current R&D tax credit
Group 2020
Group 2019
$000
1,987
1,025
327
3,478
149
6,966
486
486
$000
1,889
1,183
281
1,891
177
5,421
398
398
As of 31 March 2020, the Group has a short-term receivable with the Spanish Tax Agency amounting to $0.327m
(2019: $0.281m) regarding the FY19 deductions for technological innovation.
Furthermore, there is a long-term receivable of $0.486m (2019: $0.398m) related to the estimation of the deduction
for technological innovation generated in FY20.
Trade receivables
Trade receivables net of allowances are held in the following currencies:
Sterling
US Dollars
Euro
Total
2020
$000
402
1,487
98
2019
$000
105
1,691
93
1,987
1,889
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 terms 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.
Movement in allowance for doubtful debts:
Balance at beginning of year
Utilised in year
Balance at the end of the year
2020
$000
—
—
—
2019
$000
—
—
—
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.
64 / N otes to th e Consolidate d Finan c ial St atem en ts
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSYEAR ENDED 31 MARCH 2020 – CONTINUED 18. TRADE & OTHER PAYABLES
The fair values of trade and other payables are the same as book values as due to the short terms 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 46 days (2019: 37 days).
Trade payables
Other payables
Other taxation and social security taxes
Accruals
Contract liabilities
2020
$000
342
880
536
261
1,785
3,804
2019
$000
253
903
335
468
1,018
2,977
Maturity analysis of the group 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
19. 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 2020
Group 2019
$000
1,080
86
317
1,483
2020
$000
1,081
1,502
237
7
$000
444
1,055
125
1,624
2019
$000
882
2,134
241
—
2,827
3,257
2,132
2,289
140
555
248
720
2,827
3,257
At 31 March 2020, the Group had $0.53 million in available credit lines not used (2019: $0.33 million) and $1,064 million
in available invoice discounting facilities not used (2019: $2.37 million), with a 3% interest rate in average (2019: 3%).
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.
65 / Note s to th e Co nsoli dated Fin an cial Sta tem en ts
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSYEAR ENDED 31 MARCH 2020 – CONTINUED On 4 June 2019, the Company announced that the subsidiary Mirada Iberia, S.A.U., had entered into a new revolving
credit facility for up to €1.3 million (the “Facility”). The proceeds from the Facility are to be used alongside Mirada’s
existing debt financing facilities for general working capital purposes and capex of the Company, including the
implementation of customer contracts announced and in prospect.
The total amount withdrawn at 31 March 2020 was €1.1 million.
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.
20. NON-CURRENT LIABILITIES
Interest bearing loans and borrowings:
Bank loans
Other loans
Related parties loans
2020
$000
228
967
1,210
2,405
2019
$000
494
1,227
—
1,721
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 (pages 23-28)
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
2020
$000
2,827
2,405
2019
$000
3,257
1,721
(185)
(117)
5,047
4,861
66 / N otes to th e Conso lid ated Fin an c ial Statem e nts
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSYEAR ENDED 31 MARCH 2020 – 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
Between one and two years
Advances drawn on invoice discounting
On demand or within one year
Total borrowings
On demand or within one year
Between one and two years
Between two and five years
More than 5 years
2020
$000
661
171
87
919
2019
$000
1,062
272
239
1,573
1,103
1,346
345
470
156
247
674
318
2,074
2,585
7
1,210
1,217
1,081
1,081
2,851
1,726
557
156
—
—
—
882
882
3,290
519
914
318
5,290
5,041
21. 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 $40,769 (2019: $33,196).
At 31 March 2020, contributions amounting to $7,655 (2019: $7,440) were payable and included in other payables.
67 / Note s to th e Co nsolid ate d Fin an ci al St atem en ts
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSYEAR ENDED 31 MARCH 2020 – CONTINUED 22. 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 19 and 20, 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 23.
Externally imposed capital requirement
The Group is not subject to externally imposed capital requirements.
Categories of financial instruments
Financial assets
Amortised cost:
- Trade and other receivables, excluding prepayments
- Cash and cash equivalents
Financial liabilities
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 contract liabilities.
2020
$000
2019
$000
6,490
185
6,675
1,483
2,827
2,405
6,715
3,072
117
3,189
1,624
3,257
1,721
6,602
Financial risk management objectives
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 increasingly 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.
68 / N otes to th e Conso lidated Fi nan c ial St atem e nts
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSYEAR ENDED 31 MARCH 2020 – CONTINUED The company is aware that the UK’s 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
2020
$000
—
2019
$000
—
Euro denominated assets and liabilities
8,813
7,487
Entities from United Kingdom have no balances denominated in Euro/USD.
2020
$000
1,487
6,649
2019
$000
1,691
5,184
Liabilities
Assets
Foreign currency sensitivity analysis
In fiscal years 2019 and 2020, the Company has used US 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, 2019 and March 31, 2020. 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.
Euro
Sterling
Profit and loss impact
2020
$000
(541)
(314)
2019
$000
(553)
(772)
Interest rate risk management
At 31 March 2020, 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 $76,148. The remaining bank loans totalling $1,993,641 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.
69 / Note s to th e Consoli dated Fin an cial Sta tem en ts
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSYEAR ENDED 31 MARCH 2020 – CONTINUED The risk of financial loss arising from defaults on trade receivables is mitigated by the Group using a credit approval
process to assess the potential customers’ credit quality and also establishes credit limits by customer. The limits
and credit scores attributed to customers is reviewed bi-annually however, the sales ledger is reviewed at least
monthly to ensure all receivables are recoverable.
Please refer to Note 17 for further details on trade receivables, including analyses of bad debts, ageing and profile
by currency.
The Group believes the credit risk on liquid funds, being cash and cash equivalents, to be limited because the
counterparties are banks with high-credit ratings assigned by international credit-rating agencies. 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
La Caixa
BBVA
Barclays
Ibercaja
Bankia
Sabadell
Banamex
A
BBB+
A-
A
BB+
BBB
BBB
BBB
2020
2019
% of overall
cash & cash
equivalents
Carrying
amount
$000
% of overall
cash & cash
equivalents
Carrying
amount
$000
1.5%
0.0%
51.5%
28.9%
0.4%
6.6%
3.3%
6.4%
3
0
95
53
1
12
6
12
4.9%
0.1%
25.8%
62.5%
3.0%
—
—
—
6
—
30
73
4
—
—
—
Liquidity risk management
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 18, 19 and 20.
23. SHARE CAPITAL
A breakdown of the authorised and issued share capital in place as at 31 March 2020 and 2019 is as follows:
Allotted, called up and fully paid
Ordinary shares of £0.01 each
890,843,408
12,015 890,843,408
12,015
2020
2019
Number
$000
Number
$000
70 / N otes to th e Conso lida ted Fin an ci al St atem en ts
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSYEAR ENDED 31 MARCH 2020 – CONTINUED On 28 November 2017, the Company announced it had 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 had certain conditional
subscription rights in respect of new ordinary shares of 1p each in the capital of the Company. The facility was
provided by Kaptungs Limited, Kronck Business S.A. and Minles Corporation Inc. This facility was converted into
share capital as announced on 29 August 2018, through the issue of 151,785,713 ordinary shares.
On 7 March 2018, the Company announced it had entered into a secured one-year loan facility for up to $4.2 million.
This facility was provided by Kaptungs Limited. This facility was converted into capital as announced on 4 October
2018 through the issue of 300 million ordinary shares.
On 5 October 2018, the Company announced it had raised £3 million before expenses, by way of a subscription of
300 million new Ordinary Shares at 1p per share by a substantial shareholder of the Company, Kaptungs Limited.
Kaptungs Limited is an investment company which is beneficially owned by Mr. Ernesto Luis Tinajero Flores and
has a total beneficial interest of 776,879,163 Ordinary Shares in Mirada, which represents 87.21 per cent of the voting
rights in the Company.
24. RESERVES
Share premium
The amount subscribed for share capital in excess of nominal value.
On 21 January 2020, the Group announced the completion of the Share Premium account cancelation amounting
to $16 millions (£10 millions). The Share Premium reduction was performed in order to create a new reserve against
which the Group have performed credit its profit and loss account included as part of the heading “other reserves”.
As at 31 March 2019, the amount credited to the Company’s balance sheet as paid up share capital was £8,908,435.
Accordingly, the proportion of the Company’s accumulated losses to the aggregate of its share capital, share
premium and other reserves was approximately 65.7%. In accordance with EU Regulation 651/2014 the Company’s
overseas subsidiary, Mirada Iberia SAU, would currently be restricted from obtaining certain types of additional
publicly funded research and development loans that are available in Spain from the Centre for the Development
of Industrial Technology on advantageous commercial terms, unless the accumulated losses of the Company are
less than 50% of the aggregate of its total share capital, share premium and other reserves. Therefore, by cancelling
the Company’s share premium account and crediting such amount to the Company’s balance sheet Mirada Iberia
SAU should then be able to improve its position to access such publicly funded loans, should it be required, as its
accumulated losses will then be less than 50% of its share capital and other reserves.
The Share Premium Account Cancellation has not affected the voting or dividend rights of Shareholders and will not
affect the number of Ordinary Shares in issue or the nominal value per Ordinary Share.
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.
7 1 / Notes to th e Consolid ated Fi nan ci al Sta tem ents
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSYEAR ENDED 31 MARCH 2020 – CONTINUED 25. 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:
José Gozalbo Sidro
José Luis Vázquez
Francis Coles
No. of share
options
938,728
631,464
185,888
In prior periods the Company has granted share options to employees and directors through approved and
unapproved share option schemes. The exercise of options for all options granted during the 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:
2020
2019
Counterparty
Number of
share options
Weighted
average
exercise price
(£)
Number of
share options
Weighted
average
exercise price
Outstanding at the beginning of period
4,697,166
0.10
4,697,166
Lapsed during period
100-1 Share consolidation
Outstanding at the end of the period
Exercisable at the end of the period
(548,850)
41,483
41,483
41,483
0.10
—
—
—
0.10
4,697,166
0.10
4,697,166
(£)
0.10
0.10
—
0.10
0.10
The General Meeting held on 10 September 2019 approved a 100 to 1 share consolidation. The total outstanding
share options on 9 September 2019 was 4,148,316 (4,697,166 at 30 September 2018). Therefore, as of 31 March 2020,
the Company may issue up to 41,483 additional ordinary shares arising in connection with existing share options
granted to staff, management and directors.
The options outstanding at 31 March 2020 and at 31 March 2019 had an exercise price of £0.10.
The options outstanding at 31 March 2020 had a weighted average remaining contractual life of 1.4 years (2019:
2.4 years).
For the year ended 31 March 2020, the Group has recognised a total expense of $0 (2019: $70,000) related to equity-
settled share-based payment transactions.
72 / Notes to th e Co nso lidate d Fin an ci al St atem en ts
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSYEAR ENDED 31 MARCH 2020 – CONTINUED 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.
26. OPERATING LEASE ARRANGEMENTS
On 1 April 2019, the Group adopted IFRS 16 on Leases (refer to Note 3.a). The Group has chosen to not recognise in
the balance sheet the lease liabilities and the right-of-use asset corresponding to short term lease agreements and
leases for low value assets (refer to Note 4.k).
The total lease expense not subject to IFRS 16 for short-term as well as low-value leases amounts to $0.339 (refer to
Note 8).
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
2020
$000
157
94
251
2019
Restated
$000
492
468
960
In the prior year financial statements, the commitment amounting US$ 398k relating to an “option to renew a
lease for 7 years” was mistakenly disclosed as a non-cancellable operating lease. This has resulted in restating prior
year’s disclosure of Operating lease arrangements Note. This adjustment does not impact Consolidated Statement
of Comprehensive Income or Consolidated Statement of Financial Position. 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 lessee to pay all insurance, maintenance and repair costs. 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.
27. 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
2020
$000
185
68
117
185
2019
$000
117
(1,820)
1,937
117
73 / Notes to th e Consolid ated Fin an cia l S tatem ent s
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSYEAR ENDED 31 MARCH 2020 – CONTINUED Cash and cash equivalents
Cash and cash equivalents are held in the following currencies:
Sterling
Mexican Peso
Euro
Total
Reconciliation of liabilities from financing activities:
2020
$000
53
12
120
185
2019
$000
Cash
outflows
Cash
inflows
Non-cash changes
Other
non-cash
movement
Foreign
exchange
movement
Bank loans
Other loans
Related party loans
Advances
discounting
drawn
on
invoice
Payment of principal on lease liabilities
Interests on lease liabilities
Total liabilities from financing
activities
2,628
1,468
—
882
—
—
(1,723)
(237)
—
(864)
(242)
(14)
877
—
1,210
1,081
—
—
4,978
(3,080)
3,168
—
—
7
—
—
—
7
Significant non-cash transactions are as follows:
Financing activities
Conversion of related party loans
2019
$000
74
—
43
117
2020
$000
1,730
1,204
1,217
1,081
(242)
(14)
(52)
(27)
—
(18)
—
—
(97)
4,976
2020
$000
2019
$000
—
6,093
28. RELATED PARTY TRANSACTIONS
On 4 June 2019, the Company announced that the subsidiary Mirada Iberia, S.A.U., had entered into a new revolving
credit facility for up to €1.3 million (the “Facility”). The Facility was provided by Leasa Spain, S.L.U. The proceeds from
the Facility are to be used alongside Mirada’s existing debt financing facilities for general working capital purposes
and capex of the Company, including the implementation of customer contracts announced and in prospect.
The total amount drawdown at 31 March 2020 was €1.1 million.
74 / Notes to t h e Conso lidated Fi nan c ial Statem e nts
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSYEAR ENDED 31 MARCH 2020 – CONTINUED 29. EVENTS AFTER THE REPORTING DATE
On 11 March 2020, the World Health Organisation declared the coronavirus COVID-19 outbreak a pandemic,
due to its fast spread around the World, after impacting more than 150 countries. Most governments are taking
constrain measures to contain the spread, which include: isolation, confinement, quarantine and restrictions to free
movement of people, closure of public and private facilities, except for health and essential goods, border closures
and substantial reduction of air, sea, and land traffic.
This situation is affecting significantly the global economy, due to disruption or slowdown of supply chains and a
significant increase in economic uncertainty, as shown by an increase of volatility in the price of assets, exchange
rates and a decrease in long term interest rates.
At the date of issuance of this report it is not possible to make a reasonable estimation of the current and future
consequences of this crisis on the company. The Company’s Management will evaluate, during between 1 April 2020
and 31 March 2020, the impact of the matters previously described and those that could be identified in the future
on the financial position of the Company as at 31 March 2021.
On 21 May 2020, Mirada Iberia, S.A.U., has agreed an extension to the term of its €1.30 million credit facility granted
by Leasa Spain, S.L.U. The term of the Facility has been extended by 12 months and now expires on 30 November
2021, although the Company retains the option to repay any drawn amounts earlier. The Board of Mirada considered
it prudent to extend the Maturity Date in order to provide cashflow flexibility and bearing in mind the global
uncertainties presented by the COVID-19 pandemic.
75 / Notes to th e Con so lidate d Fina n cia l St atem ent s
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSYEAR ENDED 31 MARCH 2020 – CONTINUED COMPANY STATEMENT OF FINANCIAL POSITION
AT 31 MARCH 2020
Company number 03609752
Investments
Non-current assets
Trade and other receivables
Cash and cash equivalents
Current assets
Total assets
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
Note
iv
v
vi
2020
$000
10,430
10,430
437
53
490
2019
$000
10,991
10,991
649
4
654
10,920
11,644
(1,744)
(1,744)
(3,161)
(3,161)
(1,254)
(2,508)
9,176
8,483
(1,744)
(3,161)
9,176
8,483
ix
12,015
—
848
12,015
15,995
(1,630)
(3,687)
(17,897)
9,176
8,483
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 profit for the financial year for the parent
company was $1,120,787 (2019 – loss of $732,000).
These financial statements were approved and authorised for issue on 15 July 2020.
Signed on behalf of the Board of Directors
José-Luis Vázquez
CHIEF EXECUTIVE OFFICER
76 / Compa ny Statem ent o f Finan ci al Pos i ti on
COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 MARCH 2020
Share
capital
Share
premium
Foreign
exchange
reserves
Accumulated
losses
Total
$000
$000
$000
$000
$000
Balance at 1 April 2019
12,015
15,995
(1,630)
(17,897)
8,483
Profit for the year
Other comprehensive income
Movement in foreign exchange reserve
Total comprehensive profit for the year
Transactions with owners
Share premium cancelation
—
—
—
—
—
—
—
—
1,121
1,121
2,478
2,478
—
1,121
2,478
3,599
(15,995)
—
13,089
(2,906)
Balance at 31 March 2020
12,015
—
848
(3,687)
9,176
Balance at 31 March 2018 (as previously
restated)
Share
capital
Share
premium
Foreign
exchange
reserves
Accumulated
losses
Total
$000
2,261
$000
$000
$000
$000
15,760
(1,609)
(17,420)
(1,008)
Prior year adjustement (Note i)
—
—
—
185
Balance at 1 April 2018 (restated)
2,261
15,760
(1,609)
(17,235)
Loss for the year
Other comprehensive income
Movement in foreign exchange reserve
Total comprehensive loss for the year
Transactions with owners
Share-based payment
Issue of shares
Conversion of convertible loans into
shares
—
—
—
—
—
3,896
5,858
—
—
—
—
—
235
—
(732)
(21)
(21)
—
—
—
—
(732)
70
—
—
185
(823)
(732)
(21)
(753)
70
3,896
6,093
Balance at 31 March 2019
12,015
15,995
(1,630)
(17,897)
8,483
77 / Company Statem ent of C han ges in Equity
NOTES TO THE COMPANY FINANCIAL STATEMENTS
YEAR ENDED 31 MARCH 2020
I. ACCOUNTING POLICIES
Leases – Incentives; and SIC-27 Evaluating the Substance
of Transactions in the Legal Form of a Lease.
Basis of accounting
The separate financial statements of the Company have
been prepared in accordance with Financial Reporting
Standard 101 Reduced Disclosure Framework. Principal
accounting policies for the company are consistent of
those for the group company which are disclosed in
Note 4 of the group accounts, page 44. Further polices
considered in the company financial statements are
listed below.
Disclosure exemptions adopted
In preparing these financial statements the company
has taken advantage of certain disclosure exemptions
conferred by FRS
101. Therefore, these financial
statements do not include:
l certain comparative
information as otherwise
required by EU endorsed IFRS;
l certain disclosures regarding the company’s capital;
l a statement of cash flows;
l the effect of future accounting standards not yet
adopted;
l the disclosure of
the
remuneration of key
management personnel; and
l disclosure of related party transactions with other
wholly owned members of the group.
In addition, and in accordance with FRS 101 further
disclosure exemptions have been adopted because
equivalent disclosures are included in the consolidated
financial statements of Mirada plc. These financial
statements do not
in
respect of:
include certain disclosures
l Financial Instruments (other than certain disclosures
required as a result of recording financial instruments
at fair value); and
l Fair value measurement
than certain
disclosures required as a result of recording financial
instruments at fair value).
(other
New standards, amendments and IFRIC
interpretations
l
IFRS 16 – Leases
This Standard replaces the following standards: (a)
IAS 17 Leases; (b) IFRIC 4 Determining Whether an
Arrangement Contains a Lease; (c) SIC-15 Operating
78 / N otes to th e Company Fin an c ial St atem e nt s
IFRS 16 establishes that companies that are lessee
in lease contracts will recognise in the consolidated
balance sheet the liabilities and assets of lease contracts
(except short-term and low-value lease agreements).
Furthermore, the operating lease expense has been
replaced by a charge for straight-line amortisation of
right of use assets and an interest expense on lease
liabilities.
This standard has not introduced significant changes in
the accounting for lease contracts by the lessor.
The Company previously classified leases as operating
or finance leases under IAS 17 (refer to note 26). With
respect to the leases classified as finance leases in
accordance with IAS 17, the book value of the right of
use asset and the lease liability on the date of first-time
application date will be the carrying amount of the
lease asset and the lease liability immediately prior to
that date, measured in accordance with IAS 17. With
respect to those leases, the lessee will record the asset
by right of use and the lease liability in accordance with
this standard as of the date of first-time application.
restating
approach, without
The Company has opted to apply the modified
retrospective
the
comparative information presented as at 31 March
2019 under the aforementioned standards. Under this
option, the Group has calculated the lease liability as
the current value of the outstanding instalments on the
contracts in force at the date of first-time application
determined on the basis of the incremental interest
rates on the aforementioned date and has recognised
the value of the right-of-use asset for the same amount
of the lease liability calculated at 1 April 2019.
The average incremental discount rates for the main
countries affected by this standard, used for calculating
the current value of the rights of use and of the
operating lease liabilities recognised at the date of first-
time application of IFRS 16 are detailed in note 15.
The right of use and lease liability were defined
according to the original contract term.
the
that
lease
IFRS 16 establishes two exceptions for the
recognition
lease
low-value
included
agreements (amount equal or less than to $5 thousand)
and short-term lease agreement (for a period equal or
less of 12 months). For these cases, the expenditures
are recognised as expense during the term of the
lease agreement. Group has taken advantage of
NOTES TO THE COMPANY FINANCIAL STATEMENTS
YEAR ENDED 31 MARCH 2020 – CONTINUED
these 2 exceptions in determining ROU assets and
Lease liability.
To calculate this impact, the Company has analysed,
among other factors, the duration of the significant
leases considering whether the agreements can
be terminated early or not and whether or not the
durations can be unilaterally extended by the lessee
and, in both cases, the degree of certainty, which, in
turn, depends on the expected use of the assets located
in the underlying properties leased.
An updated accounting policy has been set out in the
Leases policy below.
The impact of application of the standard is included in
note 3.a.
l
IFRIC 23 – Uncertainty over Income Tax Treatments
l
Amendments to IFRS 9 – Prepayment Features
with Negative Compensation
l Amendments to IAS 19 – Employee Benefits
l
Annual Improvements to IFRS Standards 2015–
2017 Cycle
New Standards, interpretations and amendments
not yet effective
The Group expects to adopt the following standards,
which have not been adopted early, as of 1 April 2020:
Amendments to IAS 1 and IAS 8
Definition of materiality or with relative importance.
This amendment clarifies the definition of materiality
or relative importance and how it should be applied
by introduction in the definition of guides that until
now have been addressed in other parts of the IFRS
Standards; improving the explanations that accompany
the definition and ensuring that the definition of
materiality or with relative importance is consistent
throughout all IFRS Standards. The Group will consider
the new definition of materiality and do not foresee
significant impact in the preparation of the consolidated
financial statement.
Going concern
As disclosed in Note 4 from the consolidated financial
statement, Directors have prepared a cash flow forecast
covering a period extending beyond 12 months from the
date of these financial statements. Different scenarios
have been considered including worse possible cases.
The forecast contains certain assumptions about the
performance of the business. These assumptions are
the directors’ best estimate of the future development
of the business, including consideration of cash reserves
required to support working capital and its new growth
initiatives. Based on this cash flow forecasts, directors
continue to adopt the going concern basis of accounting
in preparing the annual financial statements.
Investments in subsidiaries
Investments
accumulated impairment losses.
in subsidiaries are held at cost
less
Right-of-use assets and Lease liabilities (policy
applicable as from 1 April 2019)
On 1 April 2019, the Company adopted IFRS 16, on Leases.
The Company opted to use the modified retrospective
approach on transition which involves applying the
standard retroactively with the cumulative effect from
the date of first application, without restating the
information presented as at 31 March 2019 under the
aforementioned standards.
At the start of a contract, the Company evaluates
whether it contains a lease. A contract is or contains
a lease if it grants the right to control the use of the
asset identified for a period of time in exchange for a
consideration. The length of time during which the
Company uses an asset includes consecutive and non-
consecutive periods of time. The Company only re-
assesses the conditions when a contract is amended.
In contracts containing one or more components which
are lease-related and non-lease related, the Company
assigns the consideration set in the contract for each
lease component according to the sales price of each
individual lease-related component, and the aggregate
individual price of the non-lease related components.
In contracts with one or more lease and non-lease
components, the Company deems all components as
one sole lease component.
The Company has also chosen to not recognise in the
balance sheet the lease liabilities and the right-of-use
asset corresponding to short term lease agreements
(leases for one year or less) and leases for low value
assets ($5 thousand or less). For this type of contracts,
the Group recognises straight-line payments during the
lease term.
79 / No tes to th e Com pany Fina n ci al St atem ent s
NOTES TO THE COMPANY FINANCIAL STATEMENTS
YEAR ENDED 31 MARCH 2020 – CONTINUED
Lessee accounting
At the commencement of the lease term, the Company
recognises a right-of-use asset and lease liability. The
right-of-use asset is composed of the amount of the
lease liability, any payment for the lease made on or
prior to the starting date, less any incentives received,
the initial direct costs incurred and an estimate of the
costs for decommissioning or restoration to be incurred,
as indicated in the accounting policy provisions.
The Company measures the lease liability as the present
value of the lease payments which are outstanding at
the commencement date. The Company discounts
lease payments at the appropriate incremental interest
rate, unless the implicit interest rate of the lessor may
be determined reliably.
The pending lease payments are comprised of fixed
payments, less any incentive to be collected, the variable
payments that depend on an index or rate, initially
appraised by the index or rate applicable on the starting
date, the amounts expected to be paid for residual value
guarantees, the price of exercising the purchase option
whose exercise is reasonably certain and any compensation
payments for contract termination, providing the term of
the lease reflects the termination option.
The Company measures the right-of-use assets at
cost, less depreciation and accrued impairment losses,
adjusted by any re-estimate of the lease liability.
If the contract transfers ownership of the asset to the
Company at the end of the lease term or if the right-of-
use asset includes the price of the purchase option, the
depreciation criteria indicated in Note 4.j are applied
from the lease commencement date until the end of the
useful life of the asset. Otherwise, the Group depreciates
the right-of-use asset from the commencement date
until the date of the useful life of the right or the end of
the lease term, whichever is the earlier.
The Company applies the criteria for impairment of non-
current assets set out in note 4.i to right-of-use assets.
The Company measures the lease liability increasing it
by the interest accrued, decreasing it by the payments
made and re-assessing the carrying amount due to any
amendments to the lease or to reflect any reviews of the
in-substance fixed lease payments.
The Company records any variable payments that were
not included in the initial valuation of the liability in the
Consolidated Income Statement for the period in which
the events resulting in payment were produced.
80 / Notes to th e Company Finan cial St atem e nt s
The Company records any re-assessments of the liability
as an adjustment to the right-of-use asset, until it is
reduced to zero, and subsequently in the Consolidated
Income Statement.
The Company re-assesses the lease liability discounting
the lease payments at an updated rate, if any change
is made to the lease term or any change in the
expectation of the purchase option is being exercised
on the underlying asset.
The Company re-assesses the lease liability if there is
any change in the amounts expected to be paid for a
residual value guarantee or any change in the index
or rate used for determining payments, including any
change for reflecting changes in market rents once
these have been reviewed.
The Company recognises an amendment to the lease
as a separate lease if it increases the scope of the lease
by adding one or more rights of use and the amount
of consideration for the lease increases by an amount
consistent with the individual price for the increased
scope and any adjustment to the individual price to
reflect the specific circumstances of the contract.
If the amendment does not result in a separate lease,
on the amendment date the Company assigns the
consideration to the amended contract as indicated
above, it re-determines the term of the lease and re-
estimates the value of the liability discounting the
revised payments at the revised interest rate. The
Company writes down the carrying amount of the
right-of-use asset to reflect the partial or total end of the
lease in any amendments that reduce the scope of the
lease and it records the profit or loss in income. For all
other amendments, the Company adjusts the carrying
amount of the right-of-use asset.
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.
NOTES TO THE COMPANY FINANCIAL STATEMENTS
YEAR ENDED 31 MARCH 2020 – CONTINUED
If the Group considers it is likely that the tax authority
will accept an uncertain tax treatment, the Group will
establish the taxable gain (loss), the tax bases, unused
tax losses, unused tax credits or the tax rates consistent
with the tax treatment used or intended to be used in
its income tax returns.
differences can be utilised. Such assets and liabilities are
not recognised if the temporary difference arises from
the initial recognition of goodwill or from the initial
recognition (other than in a business combination) of
other assets and liabilities in a transaction that affects
neither the tax profit nor the accounting profit.
If the Group considers it unlikely that the tax authority
will accept an uncertain tax treatment, the Group will
reflect the effect of the uncertainty to establish the
taxable gain (loss), the tax bases, unused tax losses or
credits or the corresponding tax rates. The Group will
reflect the effect of the uncertainty for each uncertain
tax treatment by using the most likely amount or the
expected value of the probability weighted amounts.
liabilities
Deferred tax is the tax expected to be payable or
recoverable on differences between the carrying
amounts of assets and
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 all taxable temporary
differences and deferred tax assets are recognised
to the extent that it is probable that taxable profits
will be available against which deductible temporary
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.
II. DEFERRED TAXATION
Deferred taxation provided in the financial statements is $nil (2019: $nil) and the amounts not recognised are as
follows:
Losses
Balance at the end of the year
2020
$000
24,118
24,118
2019
$000
25,239
25,239
The deferred tax asset 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.
81 / Note s to th e Company Fi nan ci al Sta tem en ts
NOTES TO THE COMPANY FINANCIAL STATEMENTS
YEAR ENDED 31 MARCH 2020 – CONTINUED
III. INTANGIBLE ASSETS
Cost
At 1 April 2019
Foreign exchange
At 31 March 2020
Depreciation
At 1 April 2019
Foreign exchange
At 31 March 2020
Net book value
At 31 March 2020
At 31 March 2019
IV. INVESTMENTS
Cost
At 1 April 2019
Disposal of Mirada Connect
Foreign exchange
At 31 March 2020
Amounts provided
At 1 April 2019
Foreign exchange
At 31 March 2020
Net book value
At 31 March 2020
At 31 March 2019
Deferred
development
costs
$000
136
(7)
129
136
(7)
129
—
—
$000
19,210
(1)
(979)
18,230
8,219
(419)
7,800
10,430
10,991
On 5 July 2019, the Company announced the sale of Mirada Connect Ltd to PayByPhone UK Limited (part of
Volkswagen Financial Services).
82 / Notes to th e Company Fin an c ial Statem e nt s
NOTES TO THE COMPANY FINANCIAL STATEMENTS
YEAR ENDED 31 MARCH 2020 – CONTINUED
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
Group Limited
Ordinary shares 100%
UK
Digital Impact (UK) Limited* Ordinary shares 100%
UK
Mirada Iberia, S.A.
Ordinary shares 100%
Spain
Mirada Mexico, S.A.*
Ordinary shares 100%
Mexico
68 Lombard Street
London EC3V 9LJ
Dormant
68 Lombard Street
London EC3V 9LJ
Interactive TV
Services
Avda. de las Águilas 2B
28044 Madrid
Interactive TV
services
Montes Urales 505-2º
11000 México DF
Interactive TV
services
* Held indirectly in Mirada Iberia S.A.
V. TRADE AND OTHER RECEIVABLES
Trade receivables
Amounts owed by group undertakings
Other receivables
Prepayments
VI. TRADE AND OTHER PAYABLES
Trade payables
Amount owed to group undertakings
Other payables
Other taxation and social security taxes
Accruals
Contract liabilities
2020
$000
402
—
9
26
437
2019
$000
—
605
8
36
649
2020
$000
69
2019
$000
81
1,548
2,882
5
14
96
12
67
40
91
—
1,744
3,161
Maturity analysis of the 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
2020
$000
903
761
54
1,718
2019
$000
459
861
1,801
3,121
83 / Note s to th e Company Fina n cial St atem en ts
NOTES TO THE COMPANY FINANCIAL STATEMENTS
YEAR ENDED 31 MARCH 2020 – CONTINUED
VII. OPERATING LEASE ARRANGEMENTS
Within one year
VIII. SHARE CAPITAL
2020
$000
24
24
2019
$000
28
28
A breakdown of the authorised and issued share capital in place as at 31 March 2020 and 2019 is as follows:
Allotted, called up and fully paid
Ordinary shares of £0.01 each
890,843,408
12,015 890,843,408
12,015
2020
Number
2020
$000
2019
Number
2019
$000
On 28 November 2017, the Company announced it had 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 had certain conditional
subscription rights in respect of new ordinary shares of 1p each in the capital of the Company. The facility was
provided by Kaptungs Limited, Kronck Business S.A. and Minles Corporation Inc. This facility was converted into
share capital as announced on 29 August 2018, through the issue of 151,785,713 ordinary shares.
On 7 March 2018, the Company announced it had entered into a secured one-year loan facility for up to $4.2 million.
This facility was provided by Kaptungs Limited. This facility was converted into capital as announced on 4 October
2018 through the issue of 300 million ordinary shares.
On 5 October 2018, the Company announced it had raised £3 million before expenses, by way of a subscription of
300 million new Ordinary Shares at 1p per share by a substantial shareholder of the Company, Kaptungs Limited.
Kaptungs Limited is an investment company which is beneficially owned by Mr. Ernesto Luis Tinajero Flores and
has a total beneficial interest of 776,879,163 Ordinary Shares in Mirada, which represents 87.21 per cent of the voting
rights in the Company.
IX. EVENTS AFTER THE REPORTING DATE
See Note 29 of the Group financial statements.
84 / N otes to th e Company Fin an c ial St atem e nt s
OFFICERS AND PROFESSIONAL ADVISERS
Directors
Mr José-Luis Vázquez Chief Executive Officer
Mr Francis Coles
Mr Matthew Earl
Mr José Gozalbo Sidro Executive Director
Executive Director
Mr Gonzalo Babío
Non-Executive Director and Chairman
Non-Executive Director
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
Auditors
BDO LLP
55 Baker Street
London
W1U 7EU
Company Registrars
Link Asset Services
The Registry
34 Beckenham Road
Kent
BR3 4TU
85 / Off i cers an d Profe ssion al Advise rs
UK
SPAIN
MEXICO
CHILE
PHILIPPINES
L O N D O N HE A D Q U A R T ER S
JL9 V3 CE - nodnoL ,teertS drabmoL 86
+44 (0)207 868 2104 · investors@mirada.tv
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