Mode Global Holdings PLC Annual Report 2020

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FY2020 Annual Report · Mode Global Holdings PLC

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2020 Annual Report
Mode (LSE:MODE)

Introduction

Contents

Company Information

Directors:

Jonathan Rowland - (Chairman)
Richard Morecroft
Rita Liu
Gary Wilkinson
Ryan Moore

Registered office:

Finsgate,
5-7 Cranwood Street,
London, EC1V 9EE

Corporate Brokers:

Peterhouse Capital
3rd Floor, 80 Cheapside,
London, EC2V 6EE

Registrar:

Neville Registrars
Neville House,
Steelpark Road,
Halesowen, B62 8HD

Bankers:

Auditors:

Jeffreys Henry LLP
Finsgate
5-7 Cranwood Street
London, EC1V 9EE

Solicitors:

Locke Lord (UK) LLP
Second Floor,
201 Bishopsgate,
London, EC2M 3AB

Company Secretary:

Nathalie Hoon
5-7 Cranwood Street
London, EC1V 9EE

Company Number:

12794676

Website:

https://www.modeplc.com/

National Westminster bank Plc
250 Bishopsgate,
London, EC2M 4AA

For all enquiries, please contact:
info@modeplc.com

Mode Global Holdings Plc Annual Report. For the year ended 31 December 2020.Mode Global Holdings Annual Report. For the year ended in XX MONTH XXX.06

Strategic Report

Business Review

Our Mission

Mode is a Fintech Group listed on the
London Stock Exchange (LSE) Main Market.
Born in London in 2019 by a group of entre-
preneurs and financial professionals, Mode
was set up to “challenge the challengers”
and build a disruptive, digitally-native
financial ecosystem, where exchanging
value and creating wealth can be truly
seamless and easy for all.

•

Over the last decade there have been nu-
merous advancements in Fintech that have
aimed to transform the way we use finan-
cial products today. However, it is clear
that the core infrastructure and technology
that powers these systems is still reliant
on inefficient financial intermediaries that
create friction and take a cut out of trans-
actions, increasing the cost for consumers.

These inefficiencies have paved the way
for the development of technological pro-
tocols promoting efficiency, transparency
and democratisation in financial services –
Bitcoin and Open Banking.

We believe that Bitcoin and Open Banking
have the ability to truly transform financial
services, as they:

• Offer access to a decentralised finan-
cial system whose store of value tech-
nology, Bitcoin, is digitally codified and
whose supply cannot be manipulated.
Bitcoin’s characteristics are unique in
today’s world, and it is enabling people
to move away from traditional, opaque
investment products offering all-time-
low returns to transparent, technolo-
gy-powered, global investments with

Business Review

The Team

Directors

Jonathan Rowland

Ryan Moore

Richard Morecroft

Chairman

Director

Rita Liu

Director

Gary Wilkinson

Director

Executive Team

high rewards, which will become the
store of value asset within our digital-
ly-native economy.

Facilitate a cheaper, safer and smart-
er way to exchange value between
people and businesses. Thanks to Open
Banking, we are able to transition from
slow, fragmented and expensive pay-
ments networks to real-time, data-en-
riched and cheaper bank-to-bank
payments with instant authorisation
and settlement. As a result, we can
eliminate the need for card networks
and card payments once and for all,
and enable seamless transactions, in
traditional and digital currency.

At Mode, our mission is to spearhead these
developments and help accelerate the
world’s transition to a truly digitally-native
world, where exchanging value and creat-
ing wealth become seamless for all. We are
embracing the power of Bitcoin and Open
Banking to build products and services
that deliver value and efficiency to all par-
ticipants in the financial system.

Ryan Moore

Rita Liu

Richard Morecroft

Jonathan Conway

Chief Executive
Officer

Commercial

Operations

Technology

Janis Legler

Ariane Murphy

Nathalie Hoon

Richard Stones

Shelley Schachter-Cahm

Product

Investor Relations

Legal

Finance

Compliance

Mode Global Holdings Plc Annual Report. For the year ended 31 December 2020.Mode Global Holdings Plc Annual Report. For the year ended 31 December 2020.08

Strategic Report

2020 Highlights in a Snapshot

/ January

/ July

/ October

/ December

Launch of Mode App
Minimum Viable Product
(MVP)

Launch of free and in-
stant Open Banking top-
ups feature

Mode IPO (£7.5m raised) –
London Stock Exchange
Main Market listing

Adoption of Bitcoin as
treasury reserve asset

Mode no #2 in the App
Store

1,500% surge in Mode App
trading volumes (vs. August
2020)

/ April

/ August

Introduction of Bitcoin
Jar (5% APY on Bitcoin)

Appointment of Rita
Liu as CCO

Launch of free and in-
stant Bitcoin transfers

/ November

Purchase of remain-
ing stake in payments
subsidiary

950% increase in Mode
App trading volumes
(vs. August 2020)

Mode Global Holdings Annual Report. For the year ended in XX MONTH XXX.Mode Global Holdings Annual Report. For the year ended in XX MONTH XXX.10

Strategic Report

2020 Highlights Explained

Covid-19 caused unprecedented disruption
to people and businesses around the world
in 2020. Within the UK financial services
sector, we saw an acceleration in the ap-
petite for alternative investment products
generating above-average returns such
as Bitcoin, which offers scarcity and resist-
ance to inflation in times of unprecedented
quantitative easing. At Mode, we were able
to take advantage of this opportunity and
prove that our business model will have a
strong future in the post-Covid-19 world.

It also became clear that with the extraor-
dinary shift to digital in every aspect of
business, including advertising, loyalty and
payments, our upcoming payments solu-
tion was more relevant than ever, and will
have the potential to reach high levels of
adoption, as businesses look for new ways
to boost their e-commerce engagement
efforts in our new digital-first world.

Additionally, our capacity to quickly adapt
to the changes brought about by the
pandemic and our use of smart modern
technology enabled us to embrace remote
working and ensured business continuity as
well as business growth. We were able to
successfully execute our plans for 2020 and
reached the following key milestones:

January – Launch of Mode App MVP

In January 2020, we officially launched the
iOS Minimum Viable Product (MVP) of our
Mode app on the App Store, which was in
a testing phase until the end of the summer
of 2020. The launch marked the beginning
of our journey to become the go-to finan-
cial app for growing wealth and spending
smarter, reaching our first 1,000 downloads
one month after launch.

April – Introduction of the Bitcoin Jar

At the start of Q2, we rolled out our new
interest-generating product for Bitcoin
within the app – the Bitcoin Jar. Through
the Bitcoin Jar, customers were able to earn
a reward rate on their Bitcoin holdings and
receive their payments weekly.

July – Launch of Open Banking top-
ups

Looking for new ways to improve the cus-
tomer experience and reduce money trans-
fer friction, in July we became one of the
first companies in the cryptocurrency space
to introduce Open Banking top-ups, allow-
ing Mode customers to top up their account
instantly and seamlessly from high-street
banking apps without leaving the Mode
app or having to enter any details.

August – Appointment of ex-Alipay
executive Rita Liu as Chief Commer-
cial Officer and introduction of in-
stant Bitcoin transfers

In August, we announced the appointment
of ex-Alipay UK CEO Rita Liu as Mode’s
Chief Commercial Officer, serving as a
Director on the board. This was an excit-
ing addition to the team as Rita played an
instrumental role in building Alipay’s oper-
ations in Europe, essential for the expan-
sion of our business-focused arm, Mode for
Business.

To help us turn Mode into a one-stop shop
for easily managing, buying, selling and
transferring Bitcoin without cost, in August
we also introduced free and instant Bitcoin
transfers for Mode customers. This ena-
bles Mode customers to send and receive

Bitcoin to and from other customers, any-
time, anywhere, for free (without paying for
Bitcoin blockchain fees).

demonstrate our commitment to underpin
the business’ future strategy and support
our long-term mission of seamlessly con-
necting consumers and businesses.

November - 950% increase in app
trading volumes

Bitcoin’s price rallied month on month from
August to November, gaining as much as
75%, which resulted in record breaking trad-
ing volumes and assets under custody for
Mode. Mode app customers traded 950%
more Bitcoin in November compared to
August and assets under custody increased
by 210%.

December – Ranked no #2 in the
App Store and hit record trading
volume

In December, our numbers grew further
allowing us to hit our yearly trading volumes
record, 1,500% surge compared to August’s
numbers. We also reached a record high for
active app customers, leading us to No2 in
the UK App Store’s finance category and
being ranked above all high-street banks
in the UK. Bitcoin breaking its 2020 all time
high record of $20,000 attracted many
first-time Bitcoin investors looking for a safe
and easy way to get involved in crypto
assets.

October – Mode’s IPO

October marked a historical moment for
Mode as we became one of the world’s
first companies with a consumer-facing
Bitcoin offering to become publicly listed.
By conducting an IPO on the London Stock
Exchange Main Market – one of the most
reputable stock exchanges in the world –
we sent a strong message of longevity and
credibility to the world.

That same month, we announced that we
adopted Bitcoin as a treasury reserve asset,
allocating up to 10% of our cash reserves to
purchase Bitcoin. We made this decision to
demonstrate our endorsement of the po-
tential of Bitcoin as a modern, reliable store
of value, and to diversify risk for our inves-
tors at a time when extraordinary monetary
and fiscal measures could impact the value
of country-backed currencies.

November - Purchase of remaining
stake in payments subsidiary

In November, Mode officially announced
that it had bought-out the 45% minority
interest in one of its operating subsidiaries
- JGOO Limited (operating as part of Mode
for Business) - from Pure NZ Gateway Ltd.
The purchase provided us with complete
ownership of the technology and rights
associated with the business, as well as a
direct relationship with our preferred part-
ners, technology giants Tencent and Alipay.

By securing this technology and taking full
control of the business, we were able to

Mode Global Holdings Plc Annual Report. For the year ended 31 December 2020.Mode Global Holdings Plc Annual Report. For the year ended 31 December 2020.

Strategic Report

Mode App: Key Performance Metrics

The Key Performance Indicators (KPIs) displayed below were used to
monitor the performance of our Mode App in 2020.

130%

Average month on
month trading volume
growth

£3,555

Average Bitcoin balance
per customer with pos-
itive BTC balances (in
GBP)*

£2,735

72%

Average trading volume
per trading customer (in
GBP)*

Of trading customers are
repeat buyers (traded
more than once)

5 Stars

76% of our reviews on
Trustpilot were 5 stars/
Excellent.

*Exchange rate as of 31 December 2020 (1 BTC = ~£21,198)

Please note that these metrics will likely change in the next Annual Report as new
products and services are added to the Mode app.

Mode Global Holdings Plc Annual Report. For the year ended 31 December 2020.Mode Global Holdings Annual Report. For the year ended in XX MONTH XXX.14

Strategic Report

Bitcoin: Trends & Adoption

2020 was the strongest year on record
for Bitcoin as it hit historical records
and secured adoption by major banks
and institutions.

Over two years ago, we chose to embrace
Bitcoin as a vehicle for financial empower-
ment for our consumers and investors. To-
day, our confidence in its long-term value is
stronger than ever as a result of the chal-
lenges of Covid-19 and global economic
uncertainties.

In 2020, Bitcoin became significantly de-
risked as an asset class as incumbent finan-
cial services players including traditional U.S.
banks and payments giants launched cryp-
tocurrency-related services including cus-
tody, investment and compliance solutions.
Advanced regulatory frameworks were put in
place by major regulators around the world,
including banking charters for crypto com-
panies. All of these developments resulted in
reduced regulatory and technology risk, and
thus contributed to Bitcoin’s de-risking as an
asset class.

Significant quantitative easing by central
banks has also highlighted the need for infla-
tion-resistant assets. Over the last decade,

many nations have experienced systemic
banking crises such as Venezuela (2010),
Greece (2013) and Cyprus (2010). This has
increased demand for assets whose supply is
limited and cannot be manipulated, such as
Bitcoin.

In terms of demand, Bitcoin has seen its
adoption rate grow faster than mobile
phones, the internet and virtual banking. In
just 12 years, Bitcoin has transformed from
a concept on a whitepaper to a dominant
digital asset worth circa $750 billion (as of the
time of this report) in market capitalisation,
with a large and growing retail and institu-
tional following. We believe that this growth
trend will continue to accelerate, and that
Bitcoin is just at the beginning of the adop-
tion curve.

At Mode, we intend to take advantage of this
structural shift by offering a robust and con-
venient platform for investors to buy and hold
Bitcoin and access it 24/7 using their smart-
phones. We will continue to leverage our
position as a pioneer in the cryptocurrency
space and our compliance-first approach to
capture the growing demand for the emerg-
ing asset class. We also plan to launch new
products to make Bitcoin more accessible
and bring it to a wider consumer audience.

Impact of Mode’s IPO

In 2020, Mode became one of the
first UK companies to list on the
London Stock Exchange with a
consumer-facing Bitcoin offering,
in a move to bring credibility to the
crypto space.

Listing on the LSE in October 2020 marked
an important step towards cementing our
position as a pioneer as well as promoter
of transparency and accountability in the
UK financial services sector.

As a business offering Bitcoin services, it
was important to demonstrate our ability
to comply with regulatory requirements
and heightened scrutiny from the Finan-
cial Conduct Authority (FCA) in order to
build trust and credibility in the market.
Many stakeholders including regulators,
politicians and investors have criticised
cryptocurrencies, making it ever more vital

to provide a regulated vehicle that custom-
ers could trust when buying and holding
Bitcoin.

Through the IPO, retail investors were able to
gain access to an early stage fintech build-
ing innovative and disruptive financial prod-
ucts. In the UK, Mode is currently the only
publicly listed fintech with a Bitcoin consum-
er-facing offering.

Today, Mode is a trustworthy and credible
player who has successfully attracted cus-
tomers who believe in our product today
and where it is headed. We are seeing a
growing number of retail investors buying into
our business and ready to follow us through
every stage of growth.

Official Virtual IPO Ring Bell Moment on Zoom

Mode Global Holdings Plc Annual Report. For the year ended 31 December 2020.Mode Global Holdings Plc Annual Report. For the year ended 31 December 2020.

Strategic Report

Partner Network

In 2020, Mode established key stra-
tegic partnerships with best-in-class
providers to deliver high-quality
products with quicker time-to-mar-
ket.

Since inception, our approach at Mode has
been to enter strategic partnerships with
specialised vendors when appropriate. This
has allowed us to launch high-quality prod-
ucts with quick time-to-market and build
an infrastructure that satisfies the security,
compliance and scalability standards of our
stakeholders.

Various failed crypto ventures and the
collapse of German payments company
Wirecard have proven the importance of
having strong and carefully vetted partners
for an emerging fintech business. We have
a rigid partner selection and due diligence
process to ensure our partners provide the
best outcome for our customers and oth-
er stakeholders, including our regulators,
whilst having our own commercial interests
in mind.

We are confident that we are utilising
industry-leading Software-as-a-Service
(SaaS) providers for core business functions
such as digital asset custody and liquidity
provision, core banking, and compliance.
This way, we can focus on building core
competencies that seek to achieve com-
petitive advantages in the market and to
provide added value internally, particularly
within our marketing, business intelligence
and operations functions.

Once certain business objectives have
been achieved, we aim to build out core

functionalities while developing value-add-
ed differentiator services and bespoke
proprietary systems that further add value
to the technology stack and customers.

Our strategic partners are industry-leading
in three key aspects:

Technology

Our products and internal platforms are
designed to be cloud native, extremely
scalable and utilise Zero Trust design for
security. The third-party providers that we
integrate with have modern Application
Programming Interfaces (APIs) with best-in-
class capabilities that offer differentiating
and greater potential over legacy finan-
cial services players. This cloud native and
modular architectural approach allows us
to remain flexible while ensuring the highest
degree of stability and scalability.

Security

In dealing with customer funds and corpo-
rate treasury, we provide the highest level of
security through our partners who offer as-
set custody, both for e-money and crypto.

On the e-money side, we have entered
a strategic partnership with UK-based
E-Money Institution (EMI) Modulr, who
provide a regulatory umbrella for e-money
accounts, access to Faster Payments and
hold funds directly with the Bank of Eng-
land. Modulr is well-funded and allows us to
offer a highly scalable payments infrastruc-
ture through their industry-leading, API-first
technology stack.

With regards to crypto custody and liquidity provision, we have established key partner-
ships with leading global companies. For custody, BitGo provides highly secure custody
for crypto assets and insurance coverage up to $100m is provided by Lloyds of London for
assets held in cold storage. We have integrated BitGo’s technology stack in a way that
enables instant Bitcoin deposits and withdrawals for customers, with a neo-bank-like
experience.

Compliance

At Mode, we aim to be at the forefront of compliance in everything we do. In order to com-
ply with UK regulatory requirements, we have integrated market-leading SaaS providers
into our technology infrastructure for onboarding, account verification and transaction
monitoring. We utilise providers that are powered by state-of-the-art technology and ar-
tificial intelligence to ensure the highest level of convenience, mitigate risk and operational
overhead, whilst providing the best customer experience for customers.

Mode Global Holdings Plc Annual Report. For the year ended 31 December 2020.Mode Global Holdings Plc Annual Report. For the year ended 31 December 2020.18

Strategic Report

Bitcoin Investment Strategy

historically been followed by bull markets as
demand overwhelmed the reduced supply
(2013, 2017). The latest halving event hap-
pened in May 2020.

If the demand for Bitcoin continues to rise,
Bitcoin’s price is expected to increase in the
coming years, making it a rewarding use of
the firm’s treasury funds. We have reasons
to assume that demand will continue to
increase as:

•

Institutions have been increasingly
announcing that they are entering the
cryptocurrency space;

• Many family offices and endowments

have been building positions;

• Digital wallets and retail investment

platforms are adding cryptocurrency
services to their offering;

• Publicly listed and private companies
have been adding Bitcoin to their bal-
ance sheets.

Mode was the first UK public com-
pany to officially announce the
adoption of Bitcoin as a treasury
reserve asset.

At the core of Mode’s business strategy lies
protecting shareholders’ assets and max-
imising their value. Rather than allocating
all of its reserves into near-zero and even
negative yielding, common treasury assets
such as cash, savings or bonds, we chose
to execute an innovative investment strate-
gy and adopt Bitcoin as a treasury reserve
asset.

In October 2020, we announced the de-
cision to allocate up to ten percent (10%)
of our cash reserves to purchase Bitcoin,
making us the first publicly listed company
in the UK to officially announce a significant
purchase of Bitcoin as part of its treasury
investment strategy.

We have always recognised the potential
of Bitcoin as a reliable store of value and
a highly attractive investment opportuni-
ty for companies. Bitcoin was significantly
de-risked in 2020, due to a series of events
that reduced its regulatory and technolo-
gy risk (as stated earlier in this report), and
provides an asymmetric return profile due to
its inherent characteristics of being the only
financial asset available whose supply is
truly scarce and finite.

Bitcoin’s limited supply is fixed by code,
cannot be altered and has been historically
characterised by its halving cycles. Bitcoin’s
protocol is programmed to reduce mining
rewards by 50% every four years which have

Mode Global Holdings Plc Annual Report. For the year ended 31 December 2020.Mode Global Holdings Annual Report. For the year ended in XX MONTH XXX.20

Strategic Report

Finance Costs fell slightly to £284k (2019:
£312k) due to the shorter effective interest
period as the convertible loan note passed
a trigger event from the IPO on 5th Oc-
tober 2020, converting both the principal
and interest into equity.

Cash Balances ended the year at £5.4m
(2019: £2.6m). The increase reflects the
£7.5m gross funds raised from the listing,
further bolstered by the additional equity
placing in February 2021 for £6m (see post
balance sheet events).

Lastly, Other Comprehensive Income
reflects the £455k increase in our Bitcoin
investment, an increase of 120%. This was
the result of our Bitcoin Investment Strate-
gy to allocate up to 10% of the funds raised
at IPO to invest in Bitcoin.

Some of the Key Performance Indicators
used to monitor the success of our business
are set out on page 12 and 13. These will
likely change in the next Annual Report as
new products and services are added to
the Mode App.

Financial Review

Performance of the business dur-
ing the period and the position at
year end.

Revenue for the year increased significantly
from £2k to £450k, with a limited marketing
spend of £188k. This was attributable to the
launch of our Bitcoin trading functionality,
as well as the Global Services payments
platform, which saw a significant increase
in both payments and marketing activity,
as UK merchants took advantage of the
online ecommerce payment platform to
connect with the sizable Chinese consumer
base via WeChat and Alipay.

Trading conditions were strongest in the
last quarter of the year as we benefited
from Bitcoin’s increase in retail and institu-
tional following, the publicity from the IPO
in October, as well as from adding Bitcoin
to our balance sheet at a similar time to
when other large financial institutions were
announcing their involvement in cryptocur-
rencies.

Administrative expenses were £3.7m (2019:
£2.3m) increasing by £1.4m (63%) during the
period. This was driven by higher people
costs (£0.8m), a share option expense of
£0.3m and £0.3m of additional fees from
the IPO.

The unwinding of the Convertible Loan
note and the expected discounted paya-
ble interest for the loan note having re-
duced, resulted in Investment Revenue of
£360k.

👠

Mode Global Holdings Annual Report. For the year ended in XX MONTH XXX.Mode Global Holdings Plc Annual Report. For the year ended 31 December 2020.

Strategic Report

Strategy in 2021

Our strategy for 2021 is focused on con-
tinuing to build the products and services
that form the Mode Ecosystem, as well as
accelerating early customer and merchant
growth.

Launch the Mode
Ecosystem

At Mode, we are on a mission to build an
all-encompassing ecosystem that offers
people a one stop shop for growing wealth
and spending smarter. For businesses, the
ecosystem promises a cheaper, safer and
smarter way of accepting payments and
boosting loyalty amongst customers.

The key features we are launching in 2021
include:

E-commerce payments

By leveraging the power of Open
Banking and the rapid adoption of QR
codes as a result of Covid-19, our new
e-commerce payments solution facili-
tates direct and seamless transactions
in GBP between businesses and Mode
customers that are cheaper and safer,
and deliver instant authorisation and
settlement.

By building our own payment rail, we
are able to bypass the Card Schemes
and work with merchants directly, ena-
bling the building of a frictionless eco-
system where the relationship between
customers and merchants is facilitated
end to end by Mode.

This new solution gives us an edge over
the competition, as today most fin-
techs launch payment cards, a deci-
sion that ties them to the interchange
fees and limitations imposed by the
Card Schemes.

Bitcoin rewards

Our Bitcoin Rewards offering will see
customers receive rewards, in the
form of Satoshis (the smallest unit of a
Bitcoin), for performing certain actions
in-app and making online purchases
via Mode merchants, enabling us, as
Mode, and our businesses to reward
customers for their loyalty.

The amount of Bitcoin Rewards cus-
tomers receive will vary depending on
the action performed and the mer-
chant’s industry. We will earn an af-
filiate fee for each eligible merchant
transaction, in line with our strategy
to monetise our merchant base going
forward.

Loyalty & targeted offers

We will build a loyalty and rewards
engine that leverages transactional as
well as behavioural insights from cus-
tomers, giving merchants the ability to
drive engagement through targeted
loyalty and discount offers to existing
and new customers.

Mode Global Holdings Annual Report. For the year ended in XX MONTH XXX.Mode Global Holdings Plc Annual Report. For the year ended 31 December 2020.

Strategic Report

Strategy in 2021

Accelerate user and merchant
growth

We have invested in minimal marketing
since the launch of the Mode App, yet have
achieved 52,000+ new app customers and
100+ ‘Global Services’ merchants onboard-
ed as of 04 June 2021. Customer Bitcoin
trading volumes reached £19.8m January -
May 2021.

In 2021, particularly in the second half, after
the payments and rewards features have
launched, we will accelerate customer
and merchant growth by ramping up our
marketing spend and widening our target
market to digitally-native millennials and
gen-Z, not just Bitcoin investors. We will aim
to target app customers through adver-
tising and community building, as well as
investing in co-marketing partnerships with
merchants.

We will target e-commerce businesses
through a robust sales and marketing ap-
proach, focusing on large influential mer-
chants to drive scale, network effects and
brand recognition, and SMEs to accelerate
market penetration. To ensure the highest
degree of compatibility with SMEs, we will
develop integrations with e-commerce
platforms such as Shopify, Woocommerce
and Magento, ensuring that the service de-
livery is as easy as possible, and that add-
ing it to a store’s check-out page will only
be a few clicks after signing up with Mode.
Large merchants usually have their own
systems so the integration will be bespoke
in most cases.

Our growth strategy will focus on intelli-
gently targeting customers and merchants
who can bring value to the ecosystem and

can contribute to generating revenue, from
a Bitcoin trading as well as payments and
rewards perspective, from early on in their
journey with Mode.

Build market share in key verticals

Initially, we will focus on building our pres-
ence in key e-commerce verticals, including
fashion apparel, food, consumer electron-
ics, cosmetics/beauty, jewellery, home
apparel, education, sportswear, game/e-
sports and travel verticals.

Offline and brick-and-mortar verticals, such
as high-street retail, supermarkets, restau-
rants, stadiums, etc. will become a target
once in-store payments are launched.
Equally, once the recurring payments fea-
ture is available, we will aim to build market
share in subscription verticals such as gyms,
SaaS providers and entertainment sub-
scriptions.

Diversify revenue streams

In 2020, we generated revenue from Bitcoin
trading, the Bitcoin Jar and from Mode’s
Global Services payments and marketing
services (through WeChat and Alipay). With
our new payments and loyalty solution, we
will operate a diversified revenue model
which will bring income from the following
additional sources:

Payment transactions - We will charge
businesses a percentage fee for every
transaction between a customer and
a merchant. We will control the entire
value chain and therefore will achieve
higher profit margins as we do not
need to pass any fees onto the Card
Schemes.

Bitcoin rewards – We will operate Bit-
coin rewards as a revenue share/affili-
ate marketing programme. This means
that we will charge businesses a com-
mission (in percentage terms) for every
sale where cashback is offered.

Beyond 2021, we will look to further diversify
our revenue streams and bring income from
a wider range of other high-value, stable
sources, including:

From consumers:
• Consumer credit/lending
• Premium subscriptions - access to

lower trading fees, higher reward
rates and offers etc.

From businesses:
• Payments (in-store payments)
• Business lending
• Ongoing membership fee (basic

and premium) - varying access to
insights and targeting, customer
support and technical assistance.

Increase Global Services sales

Through our partnerships with Tencent and
Alipay, we are able to connect UK busi-
nesses with a growing consumer base from
China through the payment methods they
are most familiar with - WeChat Pay and
Alipay. In 2021, we will focus on growing
our Mode Global services merchant base
through direct sales and partnerships. We
will also leverage the merchant base of the
Mode app, expected to grow at a faster
pace, to cross-sell our global payments
and marketing services. With the expected
economic recovery and rebound of tour-
ism during 2021, we anticipate an increase
in our payments and marketing revenue in
2021.

Attract international investors

Beyond product development and sales,
our goal is to increase brand visibility for the
Mode brand internationally, to help boost
liquidity and build a strong and diversified
shareholder register supporting the growth
of the business.

We aim to join the OTCQB Venture Mar-
ket in the US in order for our shares to be
cross-traded publicly and become more
widely accessible to US investors. The listing
will allow us to capture the growing ap-
petite from US investors to invest in public
fintech companies with a cryptocurrency
offering. We will aim to upgrade to OTCQX
Best Market in due course in order to cap-
italise on wider PR and marketing oppor-
tunities, as well as list on other exchanges
around the world.

Secure FCA licences and registra-
tions

It is our goal to provide regulated products
for our customers and merchants so that
they can feel safe using our services. We
are currently in the process of applying for
both an Electronic Money Institution (EMI)
licence (for e-money purposes), as well as
a registration under the Money Laundering,
Terrorist Financing and Transfer of Funds
(Information on the Payer) Regulations 2017,
as amended (MLRs), (compulsory for crypto
asset businesses conducting activities in
the UK within the scope of the MLRs), from
the Financial Conduct Authority (FCA). We
are in advanced stages of our applications
and in continual conversations with the FCA
to ensure our business remains compliant.

Mode Global Holdings Plc Annual Report. For the year ended 31 December 2020.Mode Global Holdings Plc Annual Report. For the year ended 31 December 2020.

Strategic Report

Approach to Risk

In 2020, we focused on improving
our approach to risk manage-
ment and how we track and miti-
gate risk.

within from operations, taking appro-
priate actions to address and mitigate
them;

• challenging our strategic planning from

a risk and control perspective.

The Board oversees and reviews our ap-
proach to risk and control, with responsibil-
ity for risk management sitting at all levels
across Mode – including the Board, the
Executive Committee and all members of
the teams. During 2021, we will continue to
improve our management of risk at Mode
with the development of an enhanced risk
management framework and improvements
in action plans.

Types of risk

Our approach covers different types of risk,
including:

• Business strategy risk
• Product risk
• Regulatory risk
• Operational risk
•

Technological risk

Additionally, we track emerging risks which
while not seen as impacting the business
yet are changing rapidly.

We implemented measures to reduce tech-
nology and information security risk and
growing the technology team to prepare
for the growth expected in 2021. Covid-19
has seen an unprecedented impact on how
our business operates and we have adapt-
ed well to working 100% from home. This
global situation has brought about greater
focus on ensuring we plan and manage for
business continuity and we have continued
to develop our risk management frame-
work through the Risk Register which is
continually updated and managed by the
Executive team. This is facilitated through
a regular cadence of meetings and deci-
sion points to ensure management remains
informed and has all the information they
require to make decisions quickly.

Risk focused approach - Embedding
in our culture

The day-to-day focus on risk is already
embedded in our approach and culture.
However, our objective is to enhance our
understanding and management of risk
and control across the business by:

•

recording risk, mitigations and actions
plans in the Risk Register;

• embedding risk and control in all our

thinking and in decisions;
identifying the most significant risks

•

Mode Global Holdings Plc Annual Report. For the year ended 31 December 2020.Mode Global Holdings Annual Report. For the year ended in XX MONTH XXX.28

Strategic Report

Approach to Risk

Type of Risk

Details

Type of Risk

Details

Business strategy risk

Mode’s business strategy risk can be summarised as the poten-
tial impact of strategic decisions (which can include providing
new products and services) or a defective or inappropriate
strategy, including a lack of response to a situation.

At Mode, we take a proactive and agile approach to strategic
risk management. Using risk prioritisation processes allows us
to direct our resources toward the risks with the biggest po-
tential impacts. Through continual research and iterative pro-
cesses, we ensure decisions are made that allow the business
to adjust and respond to changes as necessary. This includes
changes in the legal or regulatory landscape, market adoption
and competition. This approach means we can be flexible and
responsive whilst continuing to deliver our business aims and
objectives.

Product risk

Launching any product or service creates the potential for
losses, born from a variety of issues including poor planning and
non-adherence to regulations or standards.

We deal with product risk through a combination of research,
effective planning, consultation with experts, e.g. legal opinions,
and an incremental and feature-led roll out. Through extensive
engagement with relevant experts and customer groups, we
have developed a product roadmap and delivery schedule
that is informed, measured, and flexible. This allows us to mini-
mise the risk of any losses, from inception to live, whilst allowing
the business to quickly respond to opportunity, adapt to market
conditions and quickly rectify issues.

Our products and services reflect our desire to treat customers
fairly and are developed under the FCA’s Treating Customers
Fairly (TCF) principles to ensure we provide positive customer
outcomes and minimise the risks of breaching regulations and
standards.

Regulatory risk

Operational risk

Regulatory risk is the effect of failure to comply with laws and
regulations and any changes therein. The UK regulation under
the FCA is mature and well understood. The FCA’s recent steps to
mandate the registration of cryptoasset businesses under Money
Laundering, Terrorist Financing and Transfer of Funds (Information
on the Payer) Regulations 2017, as amended (MLRs) show a pro-
active approach, providing greater clarity to Mode. As previously
mentioned, we are active in having conversations with the regu-
lator and continue dialogue to ensure our business remains com-
pliant. Our partnership with Modulr allows us to work together to
anticipate changes, adapting the business as required to mini-
mise impacts.

Operational risk covers the uncertainties and difficulties we face
on a day-to-day basis. We have created an efficient govern-
ance and management structure to ensure we can systematically
monitor, manage and control factors affecting our operation. This
structure is agile and responsive to new challenges with decisions
made quickly to minimise disruption and ensure business conti-
nuity. As the business grows, our operational structure and gov-
ernance are adapting to increased demand and new challenges.
We employ experienced people to anticipate these changes,
preparing through scenario planning and practice, ensuring resil-
ience is in place. We actively manage the risk that our operations
adversely impact customers or our competitive position to ensure
positive outcomes for our customers and the business. We are
always learning and therefore improving our approach in ensuring
we have a robust and efficient operation.

Mode Global Holdings Plc Annual Report. For the year ended 31 December 2020.Mode Global Holdings Plc Annual Report. For the year ended 31 December 2020.

30 Strategic Report

Strategic Report

Approach to Risk

Type of Risk

Details

Technological risk

Technology risk is the potential for any technology failure or cyber
incident to disrupt the business. At Mode, technology is at the
core of our operations, so we manage technology risks proactively
and appropriately. Our approach focuses on de-risking several
areas including:

•
internal system failures
• external third-party failures
•
security breaches
• malicious attacks

We take a proactive and continual approach to mitigate these
risks through cutting-edge and intelligent design, systems redun-
dancy, continual security/penetration testing and activity mon-
itoring. This continual approach is adapted to respond to new
products, scale and new threats.

As a holder of digital assets, we have developed strong security
procedures and protocols to minimise the chances of breaches.
As previously mentioned, we partner with best-in-class digital
asset custodians who are insured for loss of assets in cold stor-
age. Our operational and financial governance processes ensure
minimal exposure to losses through an unlikely breach, whether
that be external or internal. Our staff are trained to combat social
engineering bases attacks, and our customer-facing technology
requires multi-layer authentication in order to combat fraud.

Responsibility for preparing the Annual
Report and Accounts

from the Directors about their responsibility
for preparing the financial statements is on
page 43 in the Statement of Directors’ Re-
sponsibilities. The Company’s external audi-
tors explain their responsibilities on pages
51 and 52.

On Behalf of the Board

Jonathan Rowland
Chairman

Under section 172 of the Companies Act
2006, the Board is required to consider the
interests of stakeholders across the business
in our decision making.

The requirements of section 172 are for the
Directors to:

• Consider the likely consequences of any

decision in the long term,

• Act fairly between the members of the

Company,

• Maintain a reputation for high standards

of business conduct,

• Consider the interests of the Company’s

•

employees,
Foster the Company’s relationships with
suppliers, customers and others, and
• Consider the impact of the Company’s
operations on the community and the
environment

The Board has demonstrated our com-
mitment to the ongoing consideration for
stakeholder interests through this report
including on the pages 36 and 37 and in the
Corporate Governance and Stakeholder
sections. The Board is responsible for main-
taining adequate accounting records and
seeks to ensure compliance with statutory
and regulatory obligations. An explanation

Mode Global Holdings Plc Annual Report. For the year ended 31 December 2020.Mode Global Holdings Plc Annual Report. For the year ended 31 December 2020.

Strategic Report

Corporate Governance

Corporate governance statement

Our Board has a collective objective of
promoting the long-term success of Mode
for its shareholders and provides dedicated
leadership in the development and promo-
tion of the business’ strategy, and the mon-
itoring of its implementation, on an ongoing
basis. A key part of our Board’s role is ensur-
ing that we have the appropriate people,
financial and other resources to achieve our
aims.

As a company with a Standard Listing, we
are not required to comply with the pro-
visions of the UK Corporate Governance
Code. The directors have decided, so far as
is practicable given our size and nature, to
voluntarily adopt and comply with the QCA
Corporate Governance Code. Our Board
maintains governance structures that are
fit for purpose and support good decision
making.

Board activity

Our Board’s meeting schedule for 2021 has
been approved and our Board will meet
formally at least four times during the year
with additional ad hoc meetings called as
and when appropriate, as was the case in
2020. Our Board’s activities throughout the
year are underpinned by our external re-
porting calendar and our internal business
planning processes. A rolling annual agen-
da ensures that all important topics receive
sufficient attention. Standing agenda items
provide an anchor to the strategy and
provide our Board with a consistent view of
progress during the year.

At each Board meeting the standing agen-
da includes:

• quorum;
• approval of minutes (circulated to all

directors in advance for comment) and
review of outstanding actions;

• corporate governance and Committee

•

reports;
reports from the Chairman, including key
business developments;

• and financial and operational review.

The agendas and accompanying papers
are distributed to Board members in ad-
vance of each Board meeting. These in-
clude reports from Executive Directors, and
other members of the Executive team, as
appropriate. All directors have direct ac-
cess to the Executive team and other senior
management should they require addi-
tional information on any of the items to be
discussed.

Expertise and experience of the di-
rectors

Our Board is satisfied that the directors,
both individually and collectively, have the
range of strategic and commercial expe-
rience, knowledge, diversity of experience
and dedication necessary, to lead Mode.
Our Board is responsible for the appoint-
ment, removal and re-election of directors
and when such a decision is required it will
take account of our need for a balance of
market, operational and financial experi-
ence.

Appointment of directors

Mode’s Articles of Association contain de-
tailed rules for the appointment and retire-
ment of directors. There is a formal proce-
dure in place to select and appoint new
directors to our Board. These directors are

Mode Global Holdings Plc Annual Report. For the year ended 31 December 2020.Mode Global Holdings Annual Report. For the year ended in XX MONTH XXX.34 Corporate Governance

Corporate Governance

required to retire at the next Annual Gener-
al Meeting (AGM), but can offer themselves
for re-election by shareholders. Under the
Articles, all directors are required to submit
themselves for re-election at intervals not
exceeding three years.

All of the directors shall retire and, being
eligible, each offers themself for reappoint-
ment by the shareholders at the AGM.

Independence of the Non-Executive
Directors

As at the date of this report, our Board
comprised the Chairman, the Executive
Directors and the Non-Executive Directors.
We have not appointed a senior independ-
ent director. These appointments are reflec-
tive of our size and nature as a company,
and the size and composition of our Board.
We are looking to appoint independent
Non-Executive Directors in the future.

Circumstances likely to impair, or which
could appear to impair, a director’s in-
dependence include whether a director
participates in our share option scheme. As
an early stage company, we have granted
options to Non-Executive Directors under
Mode’s share option scheme. Our Board
does not consider that the granting of
options to Non-Executive Directors, or the
continued vesting of options already grant-
ed, impairs the independence of those
directors concerned.

Committees and Policies

Our Board has delegated certain respon-
sibilities to members of the Executive team
which can be exercised through commit-
tees, approved policies and guidance for

certain functions of the business, including:

• Audit Committee
• Disclosure Committee
• Remuneration Policy
• Share Dealing Policy
•

Internal Policies - Anti Bribery and
Corruption (ABC), Whistleblowing, An-
ti-Fraud, Know Your Customer (KYC) and
Anti Money Laundering (AML)
• Diversity and Inclusion Guidance

The matters reserved for the Board and its
Committees include:

• Group strategy, which is reviewed by

the Board and management regularly
during the year;

• Group’s Budget approval;
•

risk management approach and risk
mitigation;

• direct shareholder communications;
• Board membership and other appoint-

ments;

• Corporate governance matters; and
• Remuneration of directors and the Ex-

ecutive team.

The Board as a whole will review the Board’s
size, structure and composition and scale
and structure of the directors’ fees, taking
into account the interest of shareholders
and our performance as a company.

Audit Committee

The Audit Committee, which comprises
Gary Wilkinson and Rita Liu, are responsible,
amongst other things, for monitoring Mode’s
financial reporting, external and internal
audits and controls, including reviewing and
monitoring the integrity of our annual and
half yearly financial statements, reviewing

and monitoring the extent of non-audit
work undertaken by external auditors, ad-
vising on the appointment of external audi-
tors, overseeing our relationship with exter-
nal auditors, reviewing the effectiveness of
the external audit process and reviewing
the effectiveness of our internal control re-
view function. The ultimate responsibility for
reviewing and approving the annual report
and accounts and the half-yearly reports
remains with the Board. The Audit Com-
mittee gives due consideration to laws and
regulations, the applicable provisions of the
UK Corporate Governance Code and the
requirements of the FCA’s Listing Rules.

Disclosure Committee

Our Board has delegated to the Disclosure
Committee responsibility for overseeing the
disclosure of information by the Company
to meet its obligations under the Market
Abuse Regulation, the FCA’s Listing Rules
and the Disclosure and Transparency Rules.
The Disclosure Committee is chaired by
the Company Secretary or the Chairman
and comprises the Chairman, the Compa-
ny Secretary/General Counsel (Nathalie
Hoon), the Chief Operations Officer (Richard
Morecroft) and the Chief Investor Relations
Officer (Ariane Murphy).

Remuneration Policy

Refer to the Directors’ Remuneration Report
on page 45.

Share Dealing Policy

We have adopted a share dealing policy
which sets out the requirements and proce-
dures for dealings in any of our listed securi-

ties. The share dealing policy applies widely
to all directors of Mode and our subsidiar-
ies, certain employees’ and persons closely
associated with them. The policy complies
with the Market Abuse Regulations, which
came into effect on 10 July 2016 and was
transposed into UK law on 31 December
2020.

Internal Policies

We have an Employee handbook in place
which details our expectations of employ-
ees and promotes an open culture. This is
supported by policies covering Anti Brib-
ery and Corruption (ABC), Whistleblowing,
Anti-Fraud, Know Your Customer (KYC) and
Anti Money Laundering (AML). Training and
testing is undertaken to ensure the team
are aware and compliant with these poli-
cies.

Diversity and Inclusion Guidance

Specifically in terms of Diversity & Inclu-
sion, we believe in building accessibility,
transparency and credibility around digital
assets, and we’ve made it our mission to
propel an unprecedented wave of democ-
ratisation and inclusion.

We strongly believe that creating a diverse
team and a culture of inclusion is absolutely
essential to our business success. We simply
cannot build a product that is accessible
for all without ensuring that our team is
both representative of our customers and
the general population as a whole, and
that everyone at Mode feels comfortable
speaking up, contributing to the discussion,
and bringing their whole, authentic selves
to work.

Mode Global Holdings Plc Annual Report. For the year ended 31 December 2020.Mode Global Holdings Plc Annual Report. For the year ended 31 December 2020.
36 Corporate Governance

Corporate Governance

We are, and always have been, committed
to baking inclusion into our processes and
ways of working, and promoting equality of
opportunity in everything we do. Whilst we
recognise that we’ve made strong progress
in some areas (for example, our gender split
across the business is slightly ahead of our
sector average, and our gender split within
the Executive team sits well above aver-
age), we know that we still have work to do.

It goes without saying that we do not ac-
cept discrimination, harassment or bullying
of any kind.

Risk management and control

The Board is responsible for promoting
our company’s long-term success for the
benefit of shareholders, as well as taking
account of other stakeholders including
employees and customers. This includes
ensuring that an appropriate approach to
risk is embedded throughout the Group,
taking into account both opportunities and
threats. To discharge this responsibility, the
Board has established processes for risk
management and internal control and re-
serves for itself the setting of our risk appe-
tite as a business.

The Board retains ultimate responsibility for
our approach to risk and control, but has
delegated in-depth monitoring of the es-
tablishment and operation of prudent and
effective controls to the Chief Operations
Officer.

Members of the Executive team are respon-
sible for the application of internal control
and risk management, for implementing
and monitoring the operation of the sys-
tems of internal control and for providing

assurance to the Chief Operations Officer
and the Board.

Our people

Stakeholders

The Board believes that maintaining strong
stakeholder relationships is essential to
our long-term, sustainable success, and is
committed to effective engagement with all
stakeholders within Mode.

Our shareholders

We are committed to establishing a strat-
egy and business model which promotes
long-term value for shareholders.

The Board also aims to be transparent and
have open engagement with our share-
holders. This enables the Board to clearly
communicate its strategy, provide updates
on business performance and receive reg-
ular feedback. It also gives the opportunity
to respond to questions and suggestions.

At Mode, we provide regular updates via
RNS and RNS Reach, as well as social me-
dia publications. The Chief Investor Rela-
tions Officer provides regular reports to the
Board on shareholder interactions. Share-
holder communications, such as our trading
results, half-year results, Annual Reports,
notices of general meetings and other
information, are provided on our investor
website at www.modeplc.com. Sharehold-
ers can sign up via our website to receive
automated email alerts when news and
updates are published.

Our team consists of a talented group of
individuals who have strong alignment with
our mission and share the same drive and
passion as our customers. The Board regu-
larly receives reports on HR-related matters
and the individual directors spend time
with employees across all departments. We
recognise that our people are a key driver
of our success, and therefore our HR and
People focus for 2020 has been to estab-
lish strong HR foundations for the future of
Mode, whilst also responding to the chal-
lenges that Covid-19 presented.

During 2020, and continuing, we have:

•

looked to support our people with their
wellbeing during the Covid-19 pan-
demic and lockdowns, including hold-
ing twice-weekly company meetings,
virtual team events, creating the Mode
internal newsletter, and introducing a
Social Committee to help combat lone-
liness and isolation;
launched our Mode Employee Hand-
book to document how we work, our
expectations and to set out what it
means to be part of the Mode Team.
formalised our approach to HR, People
and Culture;
introduced enhanced background
checking measures for all new joiners
and conducted retrospective back-
ground checking for our existing team,
to help to build trust and demonstrate
our commitment to security and compli-
ance. We have also introduced a clear
escalation and risk assessment process
and review for any failed checks;
• worked to improve candidate expe-

•

rience during the recruitment process

including introducing training to better
support our hiring managers.

Looking forward, we will:

•

increase focus on performance man-
agement and development, making
sure that everyone in the business un-
derstands their roles and responsibilities
and what success looks like, and gets
regular feedback on their performance;
launch our Company Values which will
act as the architecture and frame-
work for steering behaviour and deci-
sion-making within Mode, enabling us
to better screen for cultural alignment
during recruitment and helping us main-
tain our culture as we grow;
improve the mechanisms by which we
listen to, and seek feedback from our
people through pulse surveys, to better
inform our People and HR planning, and
so we can continue to improve our peo-
ple’s experience at Mode.

Our customers

Providing attractive products to our cus-
tomers remains a key part of the Board’s
strategy. The Board is committed to main-
taining an open dialogue with our customer
base, including obtaining its feedback on
our products and ensuring we treat cus-
tomers fairly and provide effective customer
service as well as support. The results of
engagement with our customers are fed
back to the directors to inform their strate-
gic review and decision making.

We provide information and support to
customers in an accessible format, includ-
ing, for instance, through blog posts, email,
FAQs, push notifications and in-app

Mode Global Holdings Plc Annual Report. For the year ended 31 December 2020.Mode Global Holdings Plc Annual Report. For the year ended 31 December 2020.
38 Corporate Governance

Corporate Governance

Financial Conduct Authority (FCA)

When considering proposed changes to our
product offerings in the UK, the Board and
Executive Committee carefully considered
the views of the FCA, in addition to custom-
er feedback, to ensure any new features
or products fall within all applicable reg-
ulations, as well as being beneficial to our
customers.

The Board ensures it is kept apprised of key
legal and regulatory changes affecting the
business to inform its strategy and decision
making.

Corporate Governance

messages. We very actively engage with
customers as well as the wider communi-
ty. We facilitate performance reporting to
customers so that they may monitor their
investments.

Our business partners

We work with a number of “best in class”
business partners, which support us with
a variety of specialist services. We seek to
maintain a good business relationship with
these partners, who are well-respected
experts in their field.

Our business partners are critical to the
success of Mode so we maintain good
relationships with them all, built on mutu-
al interest and trust, ensuring both parties
continue to benefit from our success.

The selection of partners is done in a fair
and transparent manner, the process driven
by the need to ensure that we receive the
services requested under a fair and com-
petitive commercial agreement. Where
possible, we engage multiple potential
partners in our selection process, with both
commercial and technical evaluation un-
dertaken.

Importantly, our business partners must
share our values and ambitions, supporting
our missions and goals.

Mode Global Holdings Annual Report. For the year ended in XX MONTH XXX.Mode Global Holdings Plc Annual Report. For the year ended 31 December 2020.40 Director's Report

Director's Report

Directors’ Report

The Directors present their report and the
audited financial statements for Mode
Global Holdings PLC for the year ended 31
December 2020.

The preparation of these financial state-
ments is in compliance with International
Financial Reporting Standards (IFRS) as
adopted by the EU and that apply to finan-
cial years commencing on or after 1 Janu-
ary 2020. The Group financial statements
consolidate the financial statements of the
Company and its subsidiaries. The Parent
Company financial statements present in-
formation about the Company as a sepa-
rate entity and not about its Group.

Principal Activities

Mode Global Holdings PLC (MGH) is a hold-
ing company. It is the parent company of
Mode Global Limited, a UK based company
which was formed on 9th September 2015,
JGOO limited, which was formed on 26th
July 2016, and Fibermode Limited which
was incorporated on 28th November 2018.

MGH’s principal activity is being the parent
company of a group of technology start-
ups, including cryptocurrency and digital
wallet (Mode), electronic payments, Grey-
foxx (Mode for Business), and JGOO (Mode
Global Services).

Business review and future develop-
ments

The review of the period’s operations, future
developments and key risks is contained in
the Strategic Report. The directors do not
recommend a final ordinary dividend for the
period (2019: £nil).

Directors and directors’ interests

Directors’ interests

The directors who held office during the
period and subsequently were as follows:

The directors held the following beneficial interests in the shares of Mode Global Holdings
PLC at 31st December 2020:

• Jonathan Rowland

(appointed 5th August 2020)

• Ryan Moore
(appointed 25th September 2020)

• Richard Morecroft

(appointed 5th August 2020)

• Gary Wilkinson

(appointed 25th September 2020)

• Rita Liu

(appointed 25th September 2020)

With regard to the appointment and re-
placement of directors, the Company is
governed by its articles of association, the
Companies Act and related legislation. The
articles themselves may be amended by
special resolution of the shareholders.

Jonathan Rowland (1)

Ryan Moore (2)

Ordinary shares
of 0.01p each

Issued
share capital %

18,973,559

6,506,094

23.6%

8.1%

(1) As at 09 April 2021, Jonathan Rowland transferred his shares to JR Spac 1 Limited, a company wholly owned by Jonathan
Rowland.
(2) Ryan Moore is a beneficial shareholder of Mode Global Holdings as a shareholder in both Keve Family Ltd Partnership
and Tulham LLC.

The remuneration of the directors in Mode Global Holdings PLC who held office during the
year to 31 December 2020 was as follows:

2020

Executive Directors

Salaries
(£)

Long-Term
Incentives
(1)

Fees
(£)

Total

Jonathan Rowland

£25,321

£28,301

£53,622

Richard Morecroft

£25,000

£100,000

£84,902

£209,902

2020

Non-Executive Directors

Gary Wilkinson

Ryan Moore

Rita Liu (2)

Remuner-
ation (£)

Long-Term
Incentives
(1)

Fees
(£)

Total

£27,372

£7,075

£34,447

£13,333

£7,075

£20,408

£95,538

£64,625

£160,163

(1) The Directors listed above were awarded unapproved share options as part of the Long-Term Incentives strategy. These
were granted shortly after listing in October 2020. The values shown above are calculated based on their fair market value
on grant of £0.18.
(2) Rita Liu is employed and paid by JGOO Limited.

Mode Global Holdings Plc Annual Report. For the year ended 31 December 2020.Mode Global Holdings Plc Annual Report. For the year ended 31 December 2020.

42 Director's Report

Director's Report

Directors’ Report

Events after the reporting
date

Events after the reporting period
are described in note 21 to the
financial statements.

Financial risk management

Details of financial risk manage-
ment are provided in note 3 to the
financial statements.

Carbon emissions

The Group is mindful of carbon emissions and
looks to obtain clean energy sources wherever
possible. A low staff headcount and staff cur-
rently working from home allow the Group to
maintain low emissions of less than 40,000kWH
of energy consumed.

Political and charitable contributions

The Group made a £5,000 donation to regis-
tered charity, Imperial Health.

Substantial shareholdings

The Company has been advised of the follow-
ing interests in more than 3% of its ordinary share
capital as at 31st December 2020:

Jonathan Rowland

Ruskin Capital Ltd

Roy Nominees Ltd

Bonderman Family LP

Tulham LLC

Goldman Sachs Securities Nominees LTD

Keve Family Ltd Partnership

Yvonne Kelsey

Pershing Nominees Ltd

23.6%

13.9%

13.0%

4.4%

4.1%

3.7%

3.3%

3.0%

73.4%

Statement of Directors’ Responsibil-
ities

The directors are responsible for prepar-
ing the Annual Report and the financial
statements in accordance with company
law, which requires the directors to prepare
group and parent company financial state-
ments for each financial year. Under that
law the directors have elected to prepare
the Group consolidated financial state-
ments in accordance with International
Financial Reporting Standards as adopted
by the European Union (IFRSs) and have
elected to prepare the parent company
financial statements under United Kingdom
Generally Accepted Accounting Practice.

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 and of the
profit or loss of the Group and the parent
company for that period.

In preparing each of the Group and parent
company financial statements, the directors
are required to:

• Select suitable accounting policies and

then apply them consistently;

• Make judgments and estimates that are

reasonable and prudent;

• State whether they have been prepared
in accordance with IFRSs as adopted
by the EU, or whether UK Accounting
Standards have been followed, subject
to any material departures disclosed
and explained; and

• Prepare the financial statements on the
going concern basis unless it is inap-
propriate to presume that the Group
and the parent company will continue in
business.

The directors are responsible for keeping
adequate accounting records that are
sufficient to show and explain the parent
company’s transactions and disclose with
reasonable accuracy at any time the finan-
cial position of the parent company and
the Group and enable them to ensure that
the financial statements comply with the
Companies Act 2006. They are also gen-
erally responsible for taking such steps as
are reasonably open to them to safeguard
the assets of the Group and to prevent and
detect fraud and other irregularities.

The directors are responsible for the main-
tenance and integrity of the corporate
and financial information included on the
Company’s website. Information published
on the website is accessible in many coun-
tries and legislation in the United Kingdom
governing the preparation and dissemina-
tion of financial statements may differ from
legislation in other jurisdictions.

The directors consider that the annual re-
port and accounts, taken as a whole, is fair,
balanced and understandable and pro-
vides the information necessary for share-
holders to assess the Group’s position and
performance, business model and strategy.
Each of the directors confirms that, to the
best of their knowledge:

The Group financial statements, which
have been prepared in accordance with IF-
RSs as adopted by the EU, give a true and
fair view of the assets, liabilities, financial
position and profit or loss of the Group; and
the Annual Report includes a fair review of
the development and performance of the
business and the position of the Group,
together with a description of the principal
risks and uncertainties that it faces.

Mode Global Holdings Plc Annual Report. For the year ended 31 December 2020.Mode Global Holdings Plc Annual Report. For the year ended 31 December 2020.44 Director's Report

Director’s Remuneration Report

Directors’ Report

Directors’ Remuneration Report

Statement of Disclosure to the Audi-
tors

All of the current directors have taken all
the steps that they ought to have taken to
make themselves aware of any information
needed by the Company’s auditors for the
purposes of their audit and to establish that
the auditors are aware of that information.
The directors are not aware of any relevant
audit information of which the auditors are
unaware. This confirmation is given and
should be interpreted in accordance with
the provisions of s418 of the Companies Act
2006.

Auditors’ appointment

Jeffreys Henry LLP has expressed its willing-
ness to continue in office and a resolution
to re-appoint them will be proposed at the
annual general meeting.

Subsequent events

The events after the reporting date can be
found in note 22.

The information included in this report is not
subject to audit other than where specifi-
cally indicated.

and takes into account the strategic
objectives, purpose and values of the
Company.

Remuneration policy

Directors’ interests

Signed by order of the Board

Jonathan Rowland
Chairman

The directors’ interests in the share capital
of the Company are set out in the Directors’
report.

Directors’ emoluments

The directors’ salaries, fees and long-term
incentive plans are also set out in the Direc-
tors’ report.

Shareholder approval

At the next annual general meeting of the
Company, a resolution approving this report
is to be proposed as an ordinary resolution.

Mode has implemented a Remuneration
policy to steer the board of directors in
determining and providing oversight of the
remuneration of the Company’s Board,
directors, and employees, ensuring that
the Company is able to attract, retain and
motivate suitably skilled personnel.

The Remuneration policy aims to ensure
that remuneration across the Company is
competitive, fair, aligned to the Company
values and rewards the right behaviours
that deliver value to the business.

The Remuneration policy covers the follow-
ing aspects

•

the determination of board members
and (where appropriate) other senior
management remuneration, ensuring
that such remuneration promotes long-
term success, is aligned with Company
purpose and values; is compliant with all
legal and regulatory requirements and is
aligned to the company risk policies and
appetites

• within the terms of the policy, and in
consultation with the Chairman as
appropriate, help determine the total in-
dividual remuneration package of each
board member;

•

the design of all long-term incentive
plans within the Company; and

• determining the Company’s overall

philosophy and approach to remunera-
tion for all staff, ensuring that it supports

Mode Global Holdings Plc Annual Report. For the year ended 31 December 2020.Mode Global Holdings Plc Annual Report. For the year ended 31 December 2020.

Independent Auditor’s Report

Independent Auditor’s Report To The
Members Of Mode Global Holdings PLC

Opinion

We have audited the financial statements
of Mode Global Holdings Plc (the ‘parent
company’) and its subsidiaries (the ‘group’)
for the period ended 31 December 2020
which comprise the consolidated state-
ment of comprehensive income, consolidat-
ed statement of financial position, con-
solidated statement of changes in equity,
consolidated statement of cash flows, com-
pany statement of financial position, com-
pany statement of changes in equity, and
notes to the financial statements, including
a summary of significant accounting pol-
icies. The financial reporting framework
that has been applied in the preparation
of the group financial statements is ap-
plicable law and International Financial
Reporting Standards (IFRSs) as adopted
by the European Union. The financial re-
porting framework that has been applied
in the preparation of the parent company
financial statements is applicable law and
United Kingdom Accounting Standards, in-
cluding FRS 101 Reduced Disclosure Frame-
work (United Kingdom Generally Accepted
Accounting Practice).

In our opinion:

•

the financial statements give a true and
fair view of the state of the Group’s and
of the parent company’s affairs as at 31
December 2020 and of the group’s loss
for the year then ended;

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

the parent company financial state-
ments have been properly prepared

in accordance with United Kingdom
Generally Accepted Accounting Prac-
tice; and

•

the financial statements have been pre-
pared in accordance with the require-
ments of the Companies Act 2006; and,
as regards the group financial state-
ment, Article 4 of the IAS Regulation.

Basis for opinion

We conducted our audit in accordance
with International Standards on Auditing
(UK) (ISAs (UK)) and applicable law. Our re-
sponsibilities under those standards are fur-
ther described in the Auditor’s responsibili-
ties for the audit of the financial statements
section of our report. We are independent
of the 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 public interest entities, and
we have fulfilled our other ethical respon-
sibilities in accordance with these require-
ments. We believe that the audit evidence
we have obtained is sufficient and appro-
priate to provide a basis for our opinion.

Conclusions relating to going con-
cern

In auditing the financial statements, we
have concluded that the director’s use of
the going concern basis of accounting in
the preparation of the financial statements
is appropriate. Our evaluation of the di-
rectors’ assessment of the entity’s ability to
continue to adopt the going concern basis
of accounting included reviews of expect-
ed cash flows for a period of 12 months, to
determine expected cash burn, which was

Mode Global Holdings Plc Annual Report. For the year ended 31 December 2020.Mode Global Holdings Annual Report. For the year ended in XX MONTH XXX.48

Independent Auditor’s Report

Independent Auditor’s Report To The
Members Of Mode Global Holdings PLC

compared to the liquid assets held in the
entity.

Based on the work we have performed, we
have not identified any material uncertain-
ties relating to events or conditions that,
individually or collectively, may cast signif-
icant doubt on the group’s ability to con-
tinue as a going concern for a period of at
least twelve months from when the financial
statements are authorised for issue.

Our responsibilities and the responsibilities
of the directors with respect to going con-
cern are described in the relevant sections
of this report.

Our approach to the audit

As part of designing our audit, we deter-
mined materiality and assessed the risks
of material misstatement in the financial
statements. In particular, we looked at
where the directors made subjective judg-
ments, for example in respect of significant
accounting estimates that involved mak-
ing assumptions and considering future
events that are inherently uncertain. As in
all of our audits we also addressed the risk
of management override of internal con-
trols, including evaluating whether there
was evidence of bias by the directors that
represented a risk of material misstatement
due to fraud.

How we tailored the audit scope

We tailored the scope of our audit to en-
sure that we performed enough work to
be able to give an opinion on the financial
statements as a whole, taking into account

the structure of the Group and the Compa-
ny, the accounting processes and controls,
and the industry in which they operate.

The Group financial statements are a con-
solidation of five reporting units, compris-
ing the Group’s operating businesses and
holding companies.

We performed audits of the complete
financial information of Mode Global
Holdings Plc, Mode Global Limited, JGOO
Limited, Fibermode Limited and Greyfoxx
Limited reporting units, which were individ-
ually financially significant and accounted
for 100% of the Group’s revenue and 100%
of the Group’s absolute profit before tax (i.e.
the sum of the numerical values without re-
gard to whether they were profits or losses
for the relevant reporting units). The Group
engagement team performed all audit
procedures.

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 in-
clude 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 over-
all audit strategy, the allocation of resourc-
es 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. This is not a complete list of all risks
identified by our audit.

Key audit matter

Carrying value of investments and recov-
erability of group receivables – Company
Risk

The amount owed to the Company at the
year end by the subsidiary Mode Global
Limited was £6,339k.

How our audit addressed the key audit
matter

We carried out a review of the investments
held in the subsidiaries.

Management’s impairment workings were
reviewed and the underlying assumptions
audited.

The carrying values of investments in group
companies was £27,490k.

We reviewed management’s basis for im-
pairment across the Company and agree
with their approach.

Treatment of cryptocurrency balances
(treasury & customer)

As part of the review of management’s
forecasts, consideration was given to the
capability of the subsidiary to repay the
amount within a 12-month period.

The rights of the entity to direct the use of
the asset have been reviewed to confirm
the treatment is appropriate.

The Group has several holdings of Crypto-
currency, for which the appropriate ac-
counting treatment and presentation will
be reviewed.

Fair values were agreed to open market
valuations and movements recognised
through OCI vouched.

Customer balances are recognised on the
balance sheet where an entity has the
ability to direct the use of the asset.

Disclosures have been reviewed for suffi-
ciency.

As the assets are not held for trade they
are held as intangible assets under the
revaluation model.

Our application of materiality

The scope of our audit was influenced
by our application of materiality. We set
certain quantitative thresholds for ma-
teriality. These, together with qualitative
considerations, helped us to determine
the scope of our audit and the nature,

timing and extent of our audit procedures on
the individual financial statement line items
and disclosures and in evaluating the effect
of misstatements, both individually and in
aggregate on the financial statements as a
whole.

Mode Global Holdings Plc Annual Report. For the year ended 31 December 2020.Mode Global Holdings Plc Annual Report. For the year ended 31 December 2020.50 Independent Auditor’s Report

Independent Auditor’s Report

Based on our professional judgment, we determined materiality for the financial state-
ments as a whole as follows:

Overall materiality

Group financial state-
ments

Company financial state-
ments

£178,000 (2019:
£106,000)

£114,000 (2019: NA first year)

How we determined it

5% of net loss
(2019: 5% net loss)

1% of gross assets
(2019: NA first year)

Rationale for benchmark ap-
plied

We believe that net
loss is a primary meas-
ure used by sharehold-
ers in assessing the
performance of the
Group, whilst the sub-
sidiaries are in varied
states of development
and trading.

We believe that gross assets
are a primary measure used
by shareholders in assess-
ing the performance of the
Company, given that it is
largely a holding company
for the trading subsidiaries.

For each component in the scope of our
Group audit, we allocated a materiality
that is less than our overall Group mate-
riality. The range of materiality allocated
across components was between £1,000
and £114,000.

We agreed with the Audit Committee that
we would report to them misstatements
identified during our audit above £8,900 for
the Group (2019: £5,300) and £5,700 for the
Parent (2019: NA) as well as misstatements
below those amounts that, in our view, war-
ranted reporting for qualitative reasons.

Other information

The directors are responsible for the other
information. The other information compris-
es the information included in the annual

report, other than the financial statements
and our auditor’s report thereon. Our opin-
ion on the financial statements does not
cover the other information and, except
to the extent otherwise explicitly stated in
our report, we do not express any form of
assurance conclusion thereon. Our respon-
sibility 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 infor-
mation. If, based on the work we have per-
formed, we conclude that there is a mate-
rial misstatement of this other information,

we are required to report that fact.

We have nothing to report in this regard.

ments and the part of the directors’
remuneration report to be audited are
not in agreement with the accounting
records and returns; or

Opinions on other matters pre-
scribed by the Companies Act 2006

• certain disclosures of directors’ remuner-

ation specified by law are not made; or

In our opinion, based on the work undertak-
en in the course of the audit:

•

the information given in the strategic
report and the directors’ report for the
financial year for which the financial
statements are prepared is consistent
with the financial statements; and

the strategic report and the directors’
report have been prepared in accord-
ance with applicable legal require-
ments.

Matters on which we are required to
report by exception

In the light of the knowledge and under-
standing of the group and 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:

• adequate accounting records have not
been kept by the parent company, or
returns adequate for our audit have not
been received from branches not visited
by us; or

•

the parent company financial state-

• we have not received all the informa-

tion and explanations we require for our
audit.

Responsibilities of directors

As explained more fully in the directors’
responsibilities statement set out on page
43, 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 parent company’s ability to
continue as a going concern, disclosing, as
applicable, matters related to going con-
cern 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 au-
dit of the financial statements

Our objectives are to obtain reasonable
assurance about whether the financial
statements as a whole are free from mate-

Mode Global Holdings Plc Annual Report. For the year ended 31 December 2020.Mode Global Holdings Plc Annual Report. For the year ended 31 December 2020.52

Independent Auditor’s Report

Independent Auditor’s Report To The
Members Of Mode Global Holdings PLC

rial misstatement, whether due to fraud or
error, and to issue an auditor’s report that
includes our opinion. Reasonable assur-
ance is a high level of assurance, but is not
a guarantee that an audit conducted in
accordance with ISAs (UK) will always de-
tect a material misstatement when it exists.
Misstatements can arise from fraud or error
and are considered material if, individually
or in the aggregate, they could reasonably
be expected to influence the economic de-
cisions of users taken on the basis of these
financial statements.

Irregularities, including fraud, are instances
of non-compliance with laws and regula-
tions. We design procedures in line with our
responsibilities, outlined above, to detect
material misstatements in respect of irregu-
larities, including fraud. The extent to which
our procedures are capable of detecting
irregularities, including fraud is detailed
below.

The extent to which the audit was
considered capable of detecting
irregularities including fraud

Our approach to identifying and assessing
the risks of material misstatement in re-
spect of irregularities, including fraud and
non-compliance with laws and regulations,
was as follows:

•

the senior statutory auditor ensured
the engagement team collectively had
the appropriate competence, capabil-
ities and skills to identify or recognise
non-compliance with applicable laws
and regulations;

• we focused on specific laws and regu-
lations which we considered may have
a direct material effect on the financial
statements or the operations of the
company;

• we assessed the extent of compliance
with the laws and regulations identi-
fied above through making enquiries
of management and inspecting legal
correspondence; and

•

identified laws and regulations were
communicated within the audit team
regularly and the team remained
alert to instances of non-compliance
throughout the audit.

We assessed the susceptibility of the com-
pany’s financial statements to material mis-
statement, including obtaining an under-
standing of how fraud might occur, by:

• making enquiries of management as to
where they considered there was sus-
ceptibility to fraud, their knowledge of
actual, suspected and alleged fraud;

• considering the internal controls in place
to mitigate risks of fraud and non-com-
pliance with laws and regulations.

To address the risk of fraud through man-
agement bias and override of controls, we:

• performed analytical procedures to
identify any unusual or unexpected
relationships;

•

tested journal entries to identify unusual
transactions;

• assessed whether judgements and

assumptions made in determining the

accounting estimates set out in Note 1
were indicative of potential bias;

•

investigated the rationale behind signif-
icant or unusual transactions.

for the audit of the financial statements is
located on the Financial Reporting Coun-
cil’s website at: www.frc.org.uk/auditorsre-
sponsibilities. This description forms part of
our auditor’s report.

In response to the risk of irregularities and
non-compliance with laws and regulations,
we designed procedures which included,
but were not limited to:

• agreeing financial statement disclosures
to underlying supporting documenta-
tion;

•

reading the minutes of meetings of
those charged with governance;

• enquiring of management as to actual
and potential litigation and claims;

• Obtaining confirmation of compliance
from the company’s legal advisors.

There are inherent limitations in our audit
procedures described above. The more
removed that laws and regulations are from
financial transactions, the less likely it is that
we would become aware of non-compli-
ance. Auditing standards also limit the audit
procedures required to identify non-com-
pliance with laws and regulations to enquiry
of the directors and other management
and the inspection of regulatory and legal
correspondence, if any.

Material misstatements that arise due to
fraud can be harder to detect than those
that arise from error as they may involve
deliberate concealment or collusion.

A further description of our responsibilities

Other matters which we are required
to address

We were reappointed as auditors by the
company at a General Meeting on 03 Sep-
tember 2020 to audit the financial state-
ments for the period ending 31 December
2020. Our total uninterrupted period of en-
gagement is 5 years, covering the periods
ending 31 December 2016 to 31 December
2020.

The non-audit services prohibited by the
FRC’s Ethical Standard were not provided
to the group or the parent company and
we remain independent of the group and
the parent company in conducting our
audit.

In addition to the audit, the firm acted
as reporting accountant to Mode Global
Holdings Plc for the transaction. Tax com-
pliance services were provided in the period
before the listing, and terminated as re-
quired by the Ethical Standards.

Our audit opinion is consistent with the ad-
ditional report to the audit committee.

Use of this report

This report is made solely to the company’s
members, as a body, in accordance with

Mode Global Holdings Plc Annual Report. For the year ended 31 December 2020.Mode Global Holdings Plc Annual Report. For the year ended 31 December 2020.54

Independent Auditor’s Report

Independent Auditor’s Report To The
Members Of Mode Global Holdings PLC

Chapter 3 of Part 16 of the Companies Act
2006. Our audit work has been undertaken
so that we might state to the company’s
members those matters we are required to
state to them in an auditor’s report and for
no other purpose. To the fullest extent per-
mitted by law, we do not accept or assume
responsibility to anyone other than the
company and the company’s members as
a body, for our audit work, for this report, or
for the opinions we have formed.

Sanjay Parmar (Senior Statutory Auditor)

For and on behalf of Jeffreys Henry LLP,
Statutory Auditor
Finsgate
5-7 Cranwood Street
London EC1V 9EE

16 June 2021

Mode Global Holdings Annual Report. For the year ended in XX MONTH XXX.Mode Global Holdings Plc Annual Report. For the year ended 31 December 2020.56 Group Financial Statements

Group Financial Statements

Consolidated Statement
of Income

Continuing operations

Revenue

Cost of sales

Gross profit

Administrative expenses

Operating Loss

Investment Revenue

Finance costs

Loss before taxation

Taxation

Loss for the period

Attributable to:

Non- Controlling interest

Equity shareholders of the parent

Notes

2020
£’000

2019
£’000

450

(507)

(57)

(39)

(37)

(3,731)

(2,258)

(3,788)

(2,295)

(3,712)

(2,607)

156

(3,556)

(2,607)

(338)

(322)

(3,218)

(2,285)

(3,556)

(2,607)

Basic and diluted loss per share (pence)

(6)

(4)

All amounts relate to continuing activities.

Consolidated Statement of
Comprehensive Income

Loss for the period

Other Comprehensive Income:

2020
£’000

(3,556)

Reclassified to profit or loss when specific conditions are met

Revaluation Reserve

455

2019
£’000

Total Comprehensive Loss for the year

(3,101)

(2,607)

360

(284)

(312)

Non- Controlling interest

Attributable to:

Equity shareholders of the parent

Total Comprehensive Loss for the year

(338)

(322)

(2,763)

(2,285)

(3,101)

(2,607)

The notes on pages 62 to 84 form an integral part of this consolidated financial informa-
tion (with front end section in).

Mode Global Holdings Plc Annual Report. For the year ended 31 December 2020.Mode Global Holdings Plc Annual Report. For the year ended 31 December 2020.

58 Group Financial Statements

Group Financial Statements

Consolidated Statement
of Financial Position

Assets

Non-current Assets

Property, plant and equipment

Intangible Non-Current Assets

Software

Intangible Current Assets

Treasury BTC

Customer BTC

Current Assets

Trade and other receivables

Cash and cash equivalents

Total Assets

Equity and Liabilities

Equity attributable to equity holders of the Group

Share Capital - Ordinary shares

Share Premium account

Profit and Loss Account

Group Reorganisation Reserve

Revaluation Reserve

Share Option Reserve

Non-Controlling interest

Convertible loan note

Total Equity

Notes

2020
£’000

2019
£’000

832

4,336

302

5,365

10,924

806

11,090

(6,878)

454

455

315

6,242

231

2,077

2,324

1,004

(2,987)

(260)

533

(1,710)

Table continues on the next page

Non-current Liabilities

Non-current convertible loans note

Intangible Liabilities

Customer BTC

Current Liabilities

Current trade and other payables

Current convertible loan notes

Total Liabilities

Total Equity and Liabilities

Notes

2020
£’000

2019
£’000

3,510

4,336

346

357

167

4,682

4,034

10,924

2,324

These financial statements were approved and authorised for issue by the Board of Direc-
tors on 16 June 2021 and were signed on its behalf by:

Jonathan Rowland
Chairman

Mode Global Holdings Plc Annual Report. For the year ended 31 December 2020.Mode Global Holdings Plc Annual Report. For the year ended 31 December 2020.60 Group Financial Statements

Group Financial Statements

Consolidated Statement
of Changes in Equity

Notes

Share
capital

Share
premium

Accumulated
deficit

Non-
Controlling
Interest

Other
Reserves

Convertible
loan note

Total
equity

MGL as at 1 January 2019

Loss for the year

Issue of convertible loan
note

As at 31 December 2019

MGH Plc as at 1 January
2020

Mode Global Limited bal-
ances brought forward

Share for Share exchange

Shares issued (incl Placing)

Share Option Reserve

CLN Conversion

Acquisition of NCI

Total Comprehensive Loss
for the year

1,004

(702)

(2,285)

(322)

1,004

(2,987)

(260)

1,004

(2,987)

(260)

550

(1,004)

150

106

6,973

4,117

(673)

598

(3,218)

(338)

455

454

315

364

(2,607)

533

(1,710)

533

(1,710)

7,123

315

(533)

3,690

(75)

(3,101)

6,242

As at 31 December 2020

806

11,090

(6,878)

1,224

The accompanying notes are an integral part of these financial statements.

Consolidated Statement of
Cashflows

Cash flows from operating activities

Operating loss

Increase in receivables

(Decrease)/increase in payables

Adjustment for:

Depreciation and amortisation

Exchange rate movement on Convertible Loan Notes

Share based payment

Net cash generated from operations

Cash flows from investing activities

Purchase of Property, plant & equipment

Purchase of BTC Treasury

Purchase of Non-Controlling Interest in JGOO

Purchase of intangible assets

Net cash outflow from financing activities

Cash flows from financing activities

Tax

Issue of shares

Issue of convertible loan note

Net cash from financing activities

Net increase in cash and cash equivalents

Cash and cash equivalents at the beginning of the period

Effect of exchange rate changes on cash and cash equivalents

Cash and cash equivalents at end of period

2020
£’000

2019
£’000

(3,788)

(2,295)

(71)

(11)

315

(105)

191

(3,471)

(2,207)

(9)

(377)

(75)

(536)

156

7,123

7,279

3,272

2,077

5,365

(9)

(18)

3,921

3921

1696

404

(23)

2,077

Represented by: Bank balances and cash

5,365

2,077

The accompanying notes are an integral part of these financial statements.

Mode Global Holdings Plc Annual Report. For the year ended 31 December 2020.Mode Global Holdings Plc Annual Report. For the year ended 31 December 2020.62 Notes to the Group Financial Statements

Notes to the Group Financial Statements

Notes to the Group Financial Statements for the
year ended 31 December 2020

1. General information

Mode Global Holdings is the holding com-
pany for a group of companies that trade
under the name ‘Mode Global’. Mode Glob-
al Holdings was incorporated on 5 August
2020 under the laws of England with a reg-
istered number of 12794676. Mode Global
Holdings is in the financial services business.
Its business address is Finsgate, 5-7 Cran-
wood Street, London, United Kingdom, EC1V
9EE.

Mode Global Holdings wholly owns Mode
Global Limited (“Mode Global”), which in

turn owns 100% of JGOO Limited (“JGOO®”)
and 100% of Greyfoxx Limited (“Greyfoxx”).
Greyfoxx wholly owns Fibermode Limited
(“MODE®”). Mode Global Holdings, together
with its subsidiaries, are referred to herein as
the “Group”. All the limited companies are
incorporated and domiciled in England. The
registered company numbers of these com-
panies are 09768854 (Mode Global Limited)
10805100 (JGOO Limited), 12123111 (Greyfoxx
Limited) and 11085143 (Fibermode Limited).

Name

Country of
incorporation

Holding

Ownership

Nature of Business

Mode Global
Limited

JGOO Limited

Fibermode
Limited

Greyfoxx
Limited

Fibere
Limited

United
Kingdom

Direct

100%

Holding Company

Indirect

100%

Indirect

100%

Global Payments
Platform

Mode Digital Wallet
(including
Cryptocurrency)

Indirect

100%

Mode for Business

Indirect

100%

Dormant

MODE provides customers the ability to
manage their traditional (fiat) money and
their digital assets (cryptocurrency) us-
ing the same mobile (or web) application.
Through MODE’s mobile interface, custom-
ers have an all-encompassing view of their

traditional fiat and cryptocurrency balanc-
es and will be able to initiate various trans-
actions in both.

JGOO is a payment processing, marketing
and advertising company. It aims to pro-

vide the next generation of a social media
and mobile payments platform, enabling
consumers, merchants, and brands to make
and receive payments without the need for
card platforms, using their mobile phones to
make and accept payments. JGOO’s initial
focus has been on enabling British brands
to engage with Chinese shoppers, both
face-to face and online, but will widen its
markets in the future.

Fibere Limited is dormant as at 31 Decem-
ber 2020.

The Group’s principal activity is to invest in
fintech companies. Its core platform, ‘Mode’,
is a financial services ecosystem which aims
to become a fully regulated, UK-based in-
stitution, providing the full scope of banking
and financial services to the holders of both
traditional and crypto-assets.

Greyfoxx is shortly expecting to become a
Financial Conduct Authority (FCA) author-
ised electronic money institution, subject to
meeting various conditions set out by the
FCA. Once operational, Greyfoxx will be
able to provide e-money services to both
JGOO and MODE.

The consolidated financial statements
comprised of the Company and its subsid-
iaries (together referred to as “the Group”)
as at 31 December 2020 and for the period
to 31 December 2020.

2. Accounting policies

The principal accounting policies applied in
the preparation of the consolidated finan-
cial statements are set out below. These
policies have been consistently applied to
all periods presented, unless otherwise stat-
ed.

Basis of preparation

This financial information has been pre-
pared in accordance with IFRS, including
IFRS Interpretations Committee (IFRIC)
interpretations issued by the Internation-
al Accounting Standards Board (IASB) as
adopted by the European Union and with
those parts of the Companies Act 2006 ap-
plicable to companies reporting under IFRS.
The financial information has been pre-
pared under the historical cost convention.

The principal accounting policies adopted
are set out below and these policies have
been consistently applied.

The preparation of financial statements, in
compliance with adopted IFRSs, requires
the use of certain critical accounting es-
timates. It also requires the Group’s man-
agement to exercise judgment in applying
the Group’s accounting policies. The areas
where significant judgments and estimates
have been made in preparing the financial
statements and their effect are disclosed
below.

Basis of consolidation

The consolidated financial statements
include the results of the Group as if they

Mode Global Holdings Plc Annual Report. For the year ended 31 December 2020.Mode Global Holdings Plc Annual Report. For the year ended 31 December 2020.64 Notes to the Group Financial Statements

Notes to the Group Financial Statements

formed a single entity for the full period or,
in the case of acquisitions, from the date
control is transferred to the Group. The
Company controls an entity when the
Company has the power, either directly or
indirectly, to govern the financial and oper-
ating policies of another entity or business
so as to obtain benefits from its activities,
whereby it is classified as a subsidiary.
Intercompany transactions and balances
between Group companies are therefore
eliminated in full.

The existence and effect of potential vot-
ing rights that are currently exercisable or
convertible are considered when assessing
whether the Group controls another entity.
Subsidiaries are fully consolidated from the
date on which control is transferred to the
Company. They are de-consolidated from
the date that control ceases.

Subsidiaries are all entities over which
Mode Global Holdings plc has the power to
govern the financial and operating policies,
generally accompanying a shareholding
of more than one half of the voting rights.
All subsidiaries have a reporting date of 31
December.

The Company acquired its 100 per cent
interest in Mode Global Limited in 2020
by way of a share for share exchange on
10th September 2020. This is a business
combination involving entities under com-
mon control and the consolidated finan-
cial statements are issued in the name of
the Group. The share for share exchange
between Mode Global Holdings and Mode
Global Limited and its subsidiaries resulted
in the elimination of the parent’s investment
in the subsidiaries, and the recognition of
a group reorganisation reserve. Prior year
represents a continuation of Mode Global
Limited with the addition of Mode Global
Holdings.

Changes in accounting policies and
disclosures

The Group has applied any applicable new
standards, amendments to standards, and
interpretations that are mandatory, for the
financial year beginning on or after 1 Janu-
ary 2020.

Standards, amendments and interpreta-
tions that are not yet effective and have
not been early adopted are as follows:

Standard

Impact on initial application

Effective date

IFRS 10 and 28
(Amendments)

Sale or Contribution of Assets between Investor
or its Associate or Joint Venture

Postponed

IFRS 17

Insurance Contracts including Amendments to
IFRS 17: Insurance Contracts

1 January
2023

Amendments to
IFRS 3

Business combinations – Reference to Concep-
tual Framework

1 January
2022

IFRS 16
(Amendments)

IAS 37
(Amendments)

* Subject to endorsement

Property, plant and equipment

1 January
2022

Provisions, contingent liabilities and contingent
assets

*1 January
2022

There are no other IFRS or IFRIC interpreta-
tions that are effective for the first time in
this financial year that would be expected
to have a material impact on the Group.

ed at the rates ruling at the statement of
financial position date. Exchange differenc-
es arising on the re-translation of outstand-
ing monetary assets and liabilities are also
recognised in the income statement.

Going concern

The consolidated financial statements are
prepared on the going concern basis. As
expected for any start-up, the Group has
incurred significant operating losses and
negative cashflows.

With the listing to the main market on Oc-
tober 5th 2020 raising £7.5m in funds and a
subsequent market placing on 26th Febru-
ary 2021 for £6m, the Directors are confident
that the Group has adequate resources
to continue in operational existence for
the foreseeable future. For these reasons,
they continue to adopt the going concern
basis of accounting in preparing the annual
financial statements. The financial state-
ments do not include any adjustments that
would result from the going concern basis
of preparation being inappropriate.

The directors are aware of the risks and
uncertainties facing the business, but the
assumptions used are the directors’ best
estimates of the future development of the
business.

Foreign currency

The functional currency of the Group is
Sterling Pound (£) and its subsidiary is
also in £. The presentational currency of
the Company is £ because a significant
amount of its transactions is in £.

Transactions entered by the Group’s entities
in a currency other than the reporting cur-
rency are recorded at the rates ruling when
the transaction occurs. Foreign currency
monetary assets and liabilities are translat-

Share capital

For the recent listing to the main market on
the London Stock Exchange on October 5th
2020, the following transactions occurred:

• On the 5th of August the Company

issued two ordinary shares of £0.0001 at
par.

• On the18th August 2020 the Company

issued 198 ordinary shares of £0.0001 at
par.

• On the 1st September 2020 the Ordinary
shares of £0.0001 were consolidated
into £0.01 shares.

• On the 10th September 2020 54,979,579
ordinary shares of £0.01 were issued as
a share-for-share exchange to acquire
100% of the share capital of Mode Glob-
al Limited, valued at £27.5m, accounted
for in a Merger Relief Reserve.

• On the 25th September 2020 the Com-
pany assumed ownership of the CLNs,
converting to 10,557,424 Ordinary Shares
of £0.01 on Listing.

• On Listing on the 5th October 2020, a
further 15,000,000 ordinary shares of
£0.01 were issued at £0.50.

Furthermore, on 27th October 2020 and 5th
November 2020, 10,265,000 share options
were granted, to be vested across the peri-
od to 5th October 2024.

The ordinary shares have attached to them
full voting, dividend and capital distribution
(including on winding up) rights.

The costs directly associated with the issue

Mode Global Holdings Plc Annual Report. For the year ended 31 December 2020.Mode Global Holdings Plc Annual Report. For the year ended 31 December 2020.66 Notes to the Group Financial Statements

Notes to the Group Financial Statements

of new ordinary shares or options are shown
in equity as a deduction, net of tax, from
the proceeds.

Revenue recognition

Digital Wallet - Fibermode

Revenue is recognised at the fair value of
the consideration received or receivable for
goods and services provided in the normal
course of business. VAT is not charged on
Fibermode’s invoices.

Revenue represents commission on custom-
er trading activities and includes interest
received on Bitcoin holdings lent out to a
third-party Network. Commission is recog-
nised on the day the trade completes.

Global Services - JGOO

Revenue is recognised in according with
the requirements of IFRS 15 ‘Revenue from
Contracts with Customers’. The Company
recognises revenue to depict the transfer
of services to customers in an amount that
reflects the consideration to which the en-
tity expects to be entitled, in exchange for
those services. This core principle is deliv-
ered in a five-step model framework:

1. Identify the contract(s) with the cus-

tomer;

2. Identify the performance obligations in

the contract;

3. Determine the transaction price;
4. Allocate the transaction price to the
performance obligations in the con-
tract; and

5. Recognise revenue when (or as) the

entity satisfies a performance obliga-
tion.

Revenue is recognised on service contracts
at the point at which the service has been
completed, or for contracts covering a
period of time, monthly over the period of
the contract. Revenues exclude intra-group
sales and value added taxes and repre-
sent funds received on a gross basis, as the
transaction revenue is received by JGOO
as the principal in respect of complet-
ing the payment transaction. We control
the service of completing payments on
our payments platform and bear primary
responsibility for the fulfilment of the pay-
ment service. JGOO has full discretion in
determining fees charged to UK merchants,
which is independent of the revenue we
receive from Alipay and WeChat Pay. We
therefore bear the risk when completing
transactions and report these items as sep-
arate transactions.

Employee benefits

(i) Short-term benefits

Wages, salaries, paid annual leave and
sick leave and non-monetary benefits
are accrued in the period in which the
associated services are rendered by em-
ployees of the Company.

(ii) Defined contribution plan

As at year ended 31 December 2020,
the Company had a defined contri-
bution pension scheme for employees
with Scottish Widows. For this defined
contribution plan, the Company pays
contributions to a privately administered
pension insurance plan on a mandatory
basis. The contributions are recognised
as an employee benefit expense when
they are due.

Operating leases

tax balances are not discounted.

The Group has elected not to recognise
right-of-use assets and lease liabilities for
its leases, all of which qualify as short-term
leases. The Group recognises the lease
payments associated with these leases as
an expense on a straight-line basis over the
lease term.

Deferred taxation

Deferred tax assets and liabilities are rec-
ognised where the carrying amount of an
asset or liability in the statement of financial
position differs from its tax base, except for
differences arising on:

•

the initial recognition of goodwill;

the initial recognition of an asset or
liability in a transaction which is not a
business combination and at the time of
the transaction affects neither account-
ing or taxable profit; and

investments in subsidiaries where the
Group is able to control the timing of the
reversal of the difference and it is prob-
able that the difference will not reverse
in the foreseeable future.

Recognition of deferred tax assets is re-
stricted to those instances where it is prob-
able that taxable profit will be available
against which the difference can be utilised.

The amount of the asset or liability is de-
termined using tax rates that have been
enacted or substantially enacted by the
balance sheet date and are expected to
apply when the deferred tax liabilities or
assets are settled or recovered. Deferred

Deferred tax assets and liabilities are offset
when the Group has a legally enforceable
right to offset current tax assets and liabil-
ities.

The Group is entitled to a tax deduction
on the exercise of certain employee share
options. A share-based payment expense
is recorded in the income statement over
the period from the grant date to the
vesting date of the relevant options. As
there is a temporary difference between
the accounting and tax bases, a deferred
tax asset may be recorded. The deferred
tax asset arising on share option awards
is calculated as the estimated amount of
tax deduction to be obtained in the fu-
ture (based on the Group’s share price at
the balance sheet date) pro-rated to the
extent that the services of the employee
have been rendered over the vesting peri-
od. If this amount exceeds the cumulative
amount of the remuneration expense at
the statutory rate, the excess is recorded
directly in equity, against retained earnings.
Similarly, current tax relief in excess of the
cumulative amount of the Share-based
payments expense at the statutory rate is
also recorded in retained earnings.

Cash and cash equivalents

Cash and cash equivalents include cash in
hand and deposits held on call, together
with other short term highly liquid invest-
ments which are not subject to significant
changes in value and have original maturi-
ties of less than three months.

Mode Global Holdings Plc Annual Report. For the year ended 31 December 2020.Mode Global Holdings Plc Annual Report. For the year ended 31 December 2020.68 Notes to the Group Financial Statements

Notes to the Group Financial Statements

Equity

June 17th 2021).

Intangible Liabilities

Please see note 18 below to review the
composition of and relevant narrative for
each section of Total Equity.

The latest date that the options can be ex-
ercised is the tenth anniversary of the Grant
Date, and if not exercised before then the
options would automatically lapse.

Equity instruments

Ordinary shares are classified as equity. In-
cremental costs directly attributable to the
issue of new shares or options are shown
in equity as a deduction, net of tax, from
proceeds. Dividends on ordinary shares are
recognised as liabilities when approved for
distribution.

Share-based payments

The Company operates an unapproved
share-based compensation plan, under
which the company receives services from
employees as consideration for equity in-
struments (options) of Mode Global Hold-
ings plc. The awards were granted, on two
separate dates being October 27th 2020
and 4th November 2020, by Mode Glob-
al Holdings plc, and the fair value of the
employee services received in exchange for
the grant of the options is recognised as an
expense under IFRS 2. Credit is recognised
directly in equity (Share Option Reserve).
The total amount to be expensed was
determined by reference to the fair value of
the total options granted using the Black
Scholes model – see note 15.

No options were able to be exercised prior
to April 2021, however given that we are
still within a closed period, the first exercise
date will be June 17th 2021 (subject to the
financial statements being published on

Intangible assets

Intangible assets are reported separate-
ly between Bitcoin assets (both Customer
holdings and Treasury holdings) and ac-
quired software and websites.

Software

Software has a finite life and is therefore
carried at cost less accumulated amor-
tisation. Amortisation is calculated using
a straight-line method to allocate the
cost of software and websites over their
estimated useful lives of three years.

Cryptocurrency assets

The bitcoin cryptocurrency assets (un-
der IAS 38) for Treasury are recorded as
Intangible assets and can be measured
at either cost or revaluation. The Group
has elected to measure them at reval-
uation, as there is now an active mar-
ket for these assets across many digital
exchanges (Coinbase, Kraken etc), and
under IFRS 13 recognises the bitcoin
assets at Fair Value, reflected in both the
revaluation reserve and in Other Com-
prehensive Income. The assets are held
for investment purposes and therefore
cannot be recognised as inventory as
they are not being held for sale in the
ordinary course of business.

Intangible liabilities are made up of cus-
tomer cryptocurrency assets and are held
at Fair value.

Property, plant and equipment

Property, plant and equipment are stated
at historical cost less subsequent accu-
mulated depreciation and accumulated
impairment losses, if any. Historical cost
includes expenditure that is directly attrib-
utable to the acquisition of the assets.

Subsequent costs are included in the as-
set’s carrying amount, or recognised as a
separate asset, as appropriate, only when
it is probable that future economic ben-
efits associated with the item will flow to
the Company and the cost of the item can
be measured reliably. All other repairs and
maintenance are charged to profit or loss
during the financial period in which they are
incurred.

Depreciation on property, plant and equip-
ment is calculated using the straight-line
method to write off their cost over their es-
timated useful lives at the following annual
rates:

Computer equipment: 33% straight-line
Plant and machinery: 33% straight-line

Financial assets and liabilities

Recognition and initial measurement

The Group initially recognises loans and
advances, trade and other receivables/
payables, and borrowings plus or minus

transactions costs, when and only when the
Group becomes party to the contractual
provisions of the instruments..

Financial assets at amortised cost

The Group’s financial assets at amortised
cost comprise trade and other receivables.
These represent debt instruments with fixed
or determinable payments that represent
principal or interest and where the intention
is to hold to collect these contractual cash
flows. They are initially recognised at fair
value, included in current and non-current
assets, depending on the nature of the
transaction, and are subsequently meas-
ured at amortised cost using the effec-
tive interest method, less any provision for
impairment.

Financial liabilities at amortised cost

Financial liabilities at amortised cost com-
prise trade and other payables. They are
classified as current and non-current liabil-
ities depending on the nature of the trans-
action, and are subsequently measured at
amortised cost using the effective interest
method.

Financial assets

The Group derecognises a financial asset
when the contractual rights to the cash
flows from the financial asset expire, or
when it transfers the rights to receive the
contractual cash flows in a transaction
in which substantially all of the risks and
rewards of ownership of the financial as-
set are transferred, or in which the Group
neither transfers nor retains substantially all
of the risks and rewards of ownership and
it does not retain control of the financial
asset.

Mode Global Holdings Plc Annual Report. For the year ended 31 December 2020.Mode Global Holdings Plc Annual Report. For the year ended 31 December 2020.

70 Notes to the Group Financial Statements

Notes to the Group Financial Statements

On derecognition of a financial asset, the
difference between the carrying amount of
the asset (or the carrying amount allocated
to the portion of the asset derecognised)
and the sum of (i) the consideration re-
ceived (including any new asset obtained
less any new liability assumed) and (ii) any
cumulative gain or loss that had been rec-
ognised in OCI is recognised in profit or loss.

Financial liabilities

The Group derecognises a financial liability
when its contractual obligations are dis-
charged, cancelled, or expire.

their liability and equity components. The
amount initially attributed to the debt com-
ponent equals the discounted cash flows
using a market rate of interest that would
be payable on a similar debt instrument
that does not include an option to con-
vert. Subsequently, the debt component is
accounted for as a financial liability meas-
ured at amortised cost, until extinguished
on conversion or maturity of the bond. The
remainder of the proceeds are allocated to
the conversion option and are recognised in
the “Convertible debt reserve” within share-
holders’ equity, net of income tax effects.

Government grants

The Group has received government as-
sistance income in the period as a result of
the Covid-19 pandemic. Government grants
are recognised where there is reasonable
assurance that the grant will be received
and that the Group will comply with the
conditions attached to them. Government
grants that compensate the Group for
expenses incurred are recognised in the
income statement, as a deduction against
the related expense, over the periods
necessary to match them with the related
costs.

During 2020 the Group received govern-
ment grants totalling £49,338 for furloughed
staff as a result of the Coronavirus Job
Retention Scheme. This was offset against
staff costs within administrative expenses.

Convertible debt

The proceeds received on the issue of the
Group’s convertible debt are allocated into

Summary of critical accounting esti-
mates and judgements

The preparation of financial information,
in conformity with IFRS, requires the use
of certain critical accounting estimates. It
also requires the directors to exercise their
judgement in the process of applying the
accounting policies which are detailed
above. These judgements are continually
evaluated by the directors and manage-
ment, and are based on historical experi-
ence and other factors, including expecta-
tions of future events that are believed to
be reasonable under the circumstances.

The key estimates and underlying assump-
tions concerning the future, and other key
estimated uncertainties at the date of the
financial statements, that have a significant
risk of causing a material adjustment to
the carrying amounts of assets and liabil-
ities within the next financial period, are
reviewed on an ongoing basis. Revisions to
accounting estimates are recognised in the
period in which the estimate is revised if the
revision affects only that period, or in the

period of the revision and future periods if
the revision affects both current and future
periods.

The estimates and judgements which have
a significant risk of causing a material ad-
justment to the carrying amount of assets
and liabilities within the next financial year
are discussed below:

Accounting for cryptocurrencies

The Group’s cryptocurrencies are ac-
counted for as Intangible Assets using
the revaluation model. The valuation

of cryptocurrencies is a key source of
estimation due to the volatility of prices
in the market. However, the risk here is
mitigated by a corresponding liability to
the customer. Treasury assets held are
marked at Fair Value using the closing
market price at 31 December 2020. The
gain is shown under the Revaluation
Reserve and subsequently within Other
Comprehensive Income.

Share-based payments

The basis for the share-based payments
expense for 2020 has been set out in
note 15. In accounting for the fair value
of options and warrants, the Compa-
ny makes assumptions regarding share
price volatility, risk free rate, and expect-
ed life, in order to determine the amount
of associated expense to recognise.

3. Financial risk management

Financial instruments

Financial assets

Cash and cash equivalents

Treasury BTC

Trade receivables – net of provision

Other receivables

Financial assets

31-Dec-20
£’000

31-Dec-19
£’000

5,365

2,077

832

234

231

6,445

2,316

Mode Global Holdings Plc Annual Report. For the year ended 31 December 2020.Mode Global Holdings Plc Annual Report. For the year ended 31 December 2020.72

Notes to the Group Financial Statements

Financial liabilities

Trade payables

Other Payables

Accruals

Trade and other payables

Loans and borrowings

Loan

Loans and borrowings

Financial liabilities

Fair value hierarchy

All the financial assets and financial liabili-
ties recognised in the financial statements
which are short-term in nature are shown at
the carrying value, which also approximates
the fair values for short-term financial
instruments. Therefore, no separate disclo-
sure for fair value hierarchy is required. The
disclosure on fair value hierarchy does not
apply to the financial leases.

The Group’s activities expose it to a variety
of financial risks, mainly credit risk, liquidity
risk and interest rate risk.

Credit risk

Credit risk refers to the risk that a counter-
party will default on its contractual obliga-

31-Dec-20
£

31-Dec-19
£

106

151

346

229

357

3,677

346

4,034

tions resulting in financial loss to the Group.
In order to minimise this risk, the Group
endeavours only to deal with companies
which are demonstrably creditworthy.

The aggregate financial exposure is con-
tinuously monitored. The maximum expo-
sure to credit risk is the value of the Group’s
outstanding bank balances. The Group’s
exposure to credit risk on cash and cash
equivalents is considered to be low as the
bank accounts are with banks with high
credit ratings.

Liquidity risk

The Group currently holds cash balances to
provide funding for normal trading activity
and is managed centrally. Trade and other
payables are monitored as part of normal

management operations. The convertible
loan note principal and interest was con-
verted to Equity upon the listing on the
October 5th 2020.

The below, for 2020, is predominantly made
up of accrued costs and tax liabilities relat-
ing to payroll:

2020

Trade and other payables

Total

2019

Trade and other payables

Convertible loan note

Total

Market risk - interest rate risk

The Group carries no interest rate risk at the
respective year ends.

Capital risk management

The Group’s capital management objec-
tives are to ensure that the Group continues
to operate as a going concern, and pro-
vide an adequate return to shareholders by
pricing products and services commensu-
rate with the level of risk.

Within 1 year
£’000

1-2 years
£’000

2-5 years
£’000

346

Within 1 year
£’000

1-2 years
£’000

2-5 years
£’000

357

167

524

195

3,315

To meet these objectives, the Company re-
views the budgets and forecasts on a regu-
lar basis to ensure there is sufficient capital
to meet the needs of the Company through
to profitability, and achieve a positive cash
flow.

All working capital requirements are fi-
nanced from existing cash resources.

Mode Global Holdings Plc Annual Report. For the year ended 31 December 2020.Mode Global Holdings Plc Annual Report. For the year ended 31 December 2020.74

Notes to the Group Financial Statements

4. Segment information

5. Loss from operations

The Group’s Revenue is made up of the
trading and interest commission on cryp-
tocurrency assets (Fibermode), as well as
bespoke payment and marketing solutions

on its Global Services platform (JGOO). The
Group currently only operates in the UK and
so for now the presentation of a geographi-
cal split is not applicable.

Revenue

Cost of sales

Gross Profit / (Loss)

Administrative expenses

Operating Profit/(Loss)

Assets

Liabilities

Equity

Total Liabilities & Equity

Revenue

Cost of sales

Gross Profit / (Loss)

Administrative expenses

Operating Profit/(Loss)

Assets

Liabilities

Equity

Total Liabilities & Equity

31-Dec-20

Global
Services
£’000

Cryptocurrency
Assets
£’000

Other
£’000

(2,115)

4,540

31-Dec-19

Total
£’000

(450)

507

(57)

(97)

182

(85)

1,319

1,477

3,731

(1,404)

(1,477)

(3,788)

4,540

6,232

10,924

6,655

(3,656)

9,889

4,682

6,242

6,232

10,924

Other
£’000

Total
£’000

(2)

(37)

792

2,258

(39)

761

(800)

(792)

(2,295)

890

(815)

2,133

2,399

(266)

2,133

2,324

4,034

(1,710)

2,324

(353)

325

934

(907)

152

1,684

(1,532)

152

(2)

706

(704)

116

745

(629)

116

Global
Services
£’000

Cryptocurrency
Assets
£’000

Year to 31
December 2020
£’000

Year to 31
December 2019
£’000

259

393

300

188

361

2,157

3,731

323

321

153

156

137

400

759

2,258

Operating loss is stated after charging:

Directors Fees

Consulting and advisory fees

Premises

Software costs

Advertising

Legal and professional fees

Audit fees*

Other administrative expenses

Total administrative expenses

* Fees paid to auditors for non-audit services not disclosed.

6. Convertible Loan Note

The amounts shown for both Investment
Revenue and Finance Costs relate to the
Convertible Loan Note issued in 2019 and
converted to equity in 2020. The Investment
Revenue is the gain on early settlement of
the outstanding debt. The Finance Costs

relate to the effective interest charges on
the Loan Notes up until the trigger event of
the Initial Public Offering – See also Note 17.

Mode Global Holdings Plc Annual Report. For the year ended 31 December 2020.Mode Global Holdings Plc Annual Report. For the year ended 31 December 2020.76

Notes to the Group Financial Statements

7. Employment costs & directors

8. Taxation

The average number of employees (including directors) during the period was made up as
follows:

Directors (including non-executive directors)

Administrative

Total

Year ended
31-Dec-20
Number

Year ended
31-Dec-19
Number

The cost of employees (including directors) during the period includes the effect of govern-
ment grants and was made up as follows:

Salaries and wages (including directors)

Social security costs

Pension Costs

Share Based Remuneration

Staff costs

Year ended
31-Dec-20
£’000

Year ended
31-Dec-19
£’000

1,281

137

315

1,752

524

576

The compensation of key management personnel, principally directors of Mode Global
Holdings PLC, for the period were as follows:

Salaries/fees

Social security costs

Share Based Remuneration

Total

Year ended
31-Dec-20
£’000

Year ended
31-Dec-19
£’000

308

192

519

316

323

The above remuneration (including share-
based payments) of directors includes the

following amounts paid to the highest paid
Director:

Salaries/fees

Year ended
31-Dec-20
£

209,902

Year ended
31-Dec-19
£

105,834

Total current tax (relief for R&D)

Year ended
31-Dec-20
£’000

(156)

Year ended
31-Dec-19
£’000

Factors affecting the tax charge for the period

Loss on ordinary activities before taxation

(3,712)

(2,607)

Loss on ordinary activities before taxation multi-
plied by standard rate of UK corporation tax of 19%
(2019: 19%)

(705)

(495)

Effects of:

Non-deductible expenses

Depreciation

Research & Development tax credits

Tax credit carried forward

Current tax credit for the period

Changes in tax rates

The UK small company’s corporation tax
rate has been maintained at 19% for the
two periods. Accordingly, the deferred
tax asset has been calculated based on
the rate of 19% at the balance sheet date.
Future enacted tax rates of 19% will apply
from 1 April 2020 and 25% from 1 April 2021.
No liability to UK corporation tax arose on
ordinary activities for the current period.

103

(156)

600

(156)

459

The Group has estimated tax losses of
£5,874,000 (2019: £2,716,000) available for
carry forward against future trading profits.
The tax losses have resulted in a deferred
tax asset of approximately £1,116,000 (2019:
£516,000) which has not been recognised in
the financial statements due to the uncer-
tainty of the recoverability of the amount.

Mode Global Holdings Plc Annual Report. For the year ended 31 December 2020.Mode Global Holdings Plc Annual Report. For the year ended 31 December 2020.78

Notes to the Group Financial Statements

9. Earnings per share (EPS)

12. Trade and other receivables

Basic and diluted

Loss for the period and earnings used in basic &
diluted EPS (£)

Weighted average number of shares used in basic
and diluted EPS

Loss per share (p)

Year ended
31-Dec-20

Year ended
31-Dec-19

(3,556,780)

(2,284,956)

61,071,349

54,979,579

(6)

(4)

Basic earnings per share is calculated by
dividing the loss attributable to equity
holders of the Company by the number of
ordinary shares in issue at the end of the
period. The weighted average number of

shares for 2019 has been restated to be
comparable to 2020 due to the listing of
Mode Global Holdings on the London Stock
Exchange on October 5th 2020.

10. Intangible assets

At period start (1 January)

Additions

Revaluation

Amortisation

At period end (31 December)

2020
£’000

452

455

(7)

908

2019
£’000

(1)

The intangible asset additions comprise
of Bitcoin (£377k) and Software (£75k). The
revaluation relates solely to the Bitcoin pur-

chases revalued to the relevant exchange
price as at 31st December 2020.

Trade payables

Other payables

Accruals

11. Tangible assets

At period start (1 January)

Additions

Revaluation

Amortisation

At period end (31 December)

Tangible Assets are comprised of computer equipment.

2020
£’000

2019
£’000

(3)

(1)

Trade receivables

Other receivables

VAT Receivable

Prepayments

31-Dec-20
£’000

31-Dec-19
£’000

211

302

117

113

231

13. Cash and cash equivalents

Where cash at bank earns interest, the
interest accrues at floating rates based on
daily bank deposit rates. The fair value of
the cash and cash equivalents is as dis-

closed below. For the purpose of the cash
flow statement, cash and cash equivalents
comprise of the amounts shown below.

Cash at bank and in hand

14. Trade and other payables

31-Dec-20
£’000

5,365

31-Dec-19
£’000

2,077

31-Dec-20
£’000

31-Dec-19
£’000

106

151

346

229

357

Mode Global Holdings Plc Annual Report. For the year ended 31 December 2020.Mode Global Holdings Plc Annual Report. For the year ended 31 December 2020.80 Notes to the Group Financial Statements

Notes to the Group Financial Statements

15. Share capital

Ordinary
shares
Number

Nominal
value/share
£

Share
capital
£

Share
premium
£

Total
consideration
£

No options were exercisable at the end of
the period. No share-based payments were
settled during the period and therefore the
method of settlement is not applicable.

options scheme were £0.18 per option using
the Black Scholes model.

The significant inputs into the model are as
follows:

At 31 December 2019

1,190,364

0.0001

119.04

1,004,112

1,004,231

Consolidation of Shares to 1p nominal

11,904

0.01

119

The weighted average fair values of the
options granted under the unapproved

Share for Share exchange allocates
4620 shares in MGH Plc for every 1
share in Mode Global Limited

54,979,579

0.01

549,796

(1,004,112)

(454,316)

CLN Conversion Shares

10,557,424

0.01

105,574

4,117,400

4,222,974

Ordinary Shares issued pursuant to
Placing

15,000,000

0.01

150,000

6,973,118

7,123,118

At 31 December 2020

80,537,003

0.01

805,370

11,090,518

11,896,007

All shares of the Company rank pari passu in all respects.

16. Share-based remuneration

The parent operates an unapproved share
option plan for all employees of the Group.
In accordance with standard vesting terms,
the full award will vest four years after the
start of the vesting date (5th October 2021),
with 20% vesting on the initial IPO date and
a further 5% of the options vested on each
three-month anniversary. If the options

remain unexercised after a period of ten
years from the date of grant, the options
expire. Options are forfeited if the employee
leaves the Group before the options vest.

The details of the movements in the share
scheme are as follows:

Granted during the period

Exercised during the period

Forfeited during the period

Outstanding as at 31 December 2020

Unapproved Options

Number

9,213,434

0.5

9,213,434

0.5

Current Price (£) on date issued

Option Exercise Price (£)

Expected Life of Options in years

Volatility

Dividend Yield

Risk free interest rate

Adjustment for sub-optimal exercise factor

0.5

59%

0.72%

20%

The expected volatility was determined us-
ing the trading prices for MGH plc from the
period it listed until February 16th 2021 to
allow for sufficient time to provide enough

scope. The reason for only considering MGH
is that there were no other similar compa-
nies listed in the UK with comparable oper-
ations to MGH.

17. Convertible debt

The company issued 197 5% convertible
loan notes for $4,925,000 on 20th February
2019 and 26 5% convertible loan notes for
$260,000 on 4th April 2019, both having a
term of three years. The notes convert au-
tomatically in the event of an IPO, change
of control, or a relevant fundraising (being
not less than $1,000,000 before expenses).

During 2020 the trigger event in regard to
the IPO occurred on 5th October 2020 at
which point the principal and interest con-
verted to Equity and therefore no debt was
outstanding at the year end.

Mode Global Holdings Plc Annual Report. For the year ended 31 December 2020.Mode Global Holdings Plc Annual Report. For the year ended 31 December 2020.
82 Notes to the Group Financial Statements

Notes to the Group Financial Statements

Up to 1 year

Between 1
and 2 years

Between 2
& 5 years

Total

166,908

195,359

3,314,186

3,676,453

166,908

195,359

3,314,186

3,676,453

At 31 December 2020

Convertible debt

Unsecured loans

At 31 December 2019

Convertible debt

18. Reserves

The following describes the nature and purpose of each reserve within equity:

Share premium

Retained earnings

Revaluation Reserve

Group Reorganisation Reserve

Share Based Payment Reserve

Amount subscribed for share capital in ex-
cess of nominal value.

Retained earnings represent all other net
gains and losses and transactions with
shareholders (example dividends) not rec-
ognised elsewhere.

Revaluation Reserve is the excess over
nominal value for the purchased Intangible
Bitcoin Assets

The consolidation of Mode Global Limited
and its subsidiaries resulted in the elimina-
tion of the parent’s investment in the sub-
sidiaries, and the recognition of a group
reorganisation reserve

Cumulative estimated expense amount
based on the price of MGH’s share options

Convertible loan note

Equity component of the convertible loan.

The Other Reserves noted on the State-
ment of Changes in Equity are comprised
of the Group Reorganisation Reserve, Share

Based Payments Reserve and the Revalua-
tion Reserve.

19. Acquisition on
Non-Controlling Interest

On 31st October 2020, Mode Global Limited
acquired Pure NZ Gateway Limited’s 45%
interest in the share capital of JGOO Lim-
ited, which subsequently became a whol-
ly-owned subsidiary of Mode Global Limit-

ed. The consideration of £75,000 was paid
and is shown in the statement of changes
in equity as an equity transaction and does
not impact the income statement.

20. Capital commitments

The Company has no capital commitments at the years ended 31 December 2020 and 31
December 2019.

21. Related Party Transactions

During the period the Company entered into the following transactions with related par-
ties:

Director

Company

Transactions

31-Dec-20
£’000

31-Dec-19
£’000

Richard Morecroft

Digital Works
Consulting

Director Fees

100

106

Jonathan Rowland

Ruskin Capital Ltd

Share Purchase

Consultancy
Fees

Tulham LLC

CLN converted

Keve Limited
Partnership

Share Purchase

1,500

750

508

Ryan Moore

Ruskin Capital Limited is owned by David Rowland, the father of Jonathan Rowland.

Mode Global Holdings Plc Annual Report. For the year ended 31 December 2020.Mode Global Holdings Plc Annual Report. For the year ended 31 December 2020.84 Notes to the Group Financial Statements

Company Financial Statements

22. Events after the reporting date

Fund raise

Additional Bitcoin purchases

A successful £6,000,000 capital raising
was completed by way of a placement of
10,909,091 new ordinary shares at a price of
£0.55p each (the “Placing Price”).

Mode continues to add Bitcoin Assets to its
Balance Sheet as a treasury reserve asset
and will continue to account for this under
the revaluation method.

The Placing Price represents a premium of
10 per cent over Mode’s October 2020 IPO
price of £0.50p and a discount of 12% to the
closing mid-price of the Company’s shares
on 25th February 2021 (being the latest
practicable date prior to the publication of
the announcement).

Personnel update

As announced on the issued RNS dat-
ed 12th May 2021, Ryan Moore (previously
Non-Executive Director) has been ap-
pointed as the Company’s Chief Executive
Officer (CEO) effective immediately. Founder
Jonathan Rowland remains as Chairman,
working closely with Ryan to shape Mode’s
growth trajectory for the years ahead.

23. Ultimate controlling party

There is no ultimate controlling party of the Company.

Company Financial Statements

Company Statement of
Financial Position

Notes

2020
£’000

Assets

Non-current Assets

Net amounts due from subsidiaries

Investment in group companies

Current Assets

Trade and other receivables

Cash and cash equivalents

Total Assets

Equity and Liabilities

Equity attributable to equity holders of the Group

Share Capital - Ordinary shares

Share Premium account

Profit and Loss Account

Merger Relief Reserve

Share Option Reserve

Total Equity

Current Liabilities

Current trade and other payables

Total Liabilities

Total Equity and Liabilities

3.3

3.6

3.4

3.7

3.8

6,339

27,490

5,054

38,884

806

11,091

(278)

26,940

315

38,874

38,884

The Company profit and loss account has
been approved by the directors, and the
use of the exemption under s408 of the
Companies Act has been applied to publish
an individual profit & loss statement.

These financial statements were approved
and authorised for issue by the board of
directors on 16 June 2021 and were signed
on its behalf by:

Jonathan Rowland
Chairman

Mode Global Holdings Plc Annual Report. For the year ended 31 December 2020.Mode Global Holdings Plc Annual Report. For the year ended 31 December 2020.86 Company Financial Statements

Notes to the Company Financial Statements

Consolidated Statement
of Changes in Equity

Share
capital
£’000

Merger Relief
Reserve
£’000

Share
premium
£’000

Accumulated
deficit
£’000

SBP
Reserve
£’000

Total
equity
£’000

Notes

Incorporation on 5 August
2020

Share for Share exchange

Shares issued
(including placing)

Share Option Reserve

CLN Conversion

Loss for Year

3.4

3.8

3.4

550

150

106

26,940

6,974

4,117

As at 31 December 2020

806

26,940

11,091

(278)

27,490

7,124

315

4,223

(278)

315

38,874

Share capital is the amount subscribed for
shares at nominal value.

The accompanying notes are an integral
part of these financial statements.

Merger relief reserve is the excess over the
nominal value for shares issued as part of a
share-for-share exchange.

Notes to the Company Financial Statements for
the year ended 31 December 2020

1. General information

Mode Global Holdings Plc is an investment
company incorporated in the United King-
dom. The address of the registered office
is Finsgate, 5-7 Cranwood Street, London,
United Kingdom, EC1V 9EE. The Company
was incorporated and registered in England
and Wales on 5th August 2020 as a public
limited company.

2. Accounting policies

As at 31 December 2020 the Company had
shareholdings in five entities, a direct hold-
ing in Mode Global Limited, and indirect
holdings in JGOO Limited 100%, Greyfoxx
Limited 100%, Fibermode Limited (100%) &
Fibere Limited.

Basis of preparation

cial Statements;

The financial statements of the parent
company have bene prepared in accord-
ance with Financial Reporting Standard 101
‘Reduced Disclosure Framework’ (“FRS101”)
and the requirements of the Companies Act
2006 in accordance with applicable ac-
counting standards.

These policies have been consistently ap-
plied.

The company has taken advantage of the
following disclosure exemptions under FRS
101:

•

the requirements of IFRS 7 Financial In-
struments: Disclosures;

the requirements of paragraphs 91-99 of
IFRS 13 Fair Value Measurement;

the requirements of paragraphs 10(d),
10(f), 16, 38A to 38D, 40A to 40D, 111 and
134 to 136 of IAS 1 Presentation of Finan-

•

the requirements of IAS 7 Statement of
Cash Flows;

the requirements of paragraphs 30 and
31 of IAS 8 Accounting Policies, Changes
in Accounting Estimates and Errors;

the requirements of paragraphs 17 and
18A of IAS 24 Related Party Disclosures;

the requirements in IAS 24 Related Party
Disclosures to disclose related party
transactions entered into between two
or more members of a group, provided
that any subsidiary which is a party to
the transaction is wholly owned by such
a member ;member; and

the requirements of paragraphs 130(f)
(ii), 130(f)(iii), 134(d) to 134(f), and 135(c) to
135(e) of IAS 36 Impairment of Assets.

Mode Global Holdings Plc Annual Report. For the year ended 31 December 2020.Mode Global Holdings Plc Annual Report. For the year ended 31 December 2020.88 Notes to the Company Financial Statements

Notes to the Company Financial Statements

The Company has also taken advantage
of the exemption under Section 408 of the
Companies Act 2006 from presenting its
own profit and loss account.

The preparation of financial statements,
in conformity with FRS101, requires the use
of certain critical accounting estimates. It
also requires management to exercise its
judgement in the process of applying the
Company’s accounting policies. The are-
as involving a higher degree of judgment
or complexity, or areas where assump-
tions and estimates are significant to the
financial statements, are disclosed in the
Company statement of financial position.
Although these estimates are based on
management’s experience and knowledge

of current events and actions, actual results
may ultimately differ from these estimates.

The estimates and underlying assumptions
are reviewed on an on-going basis. Revi-
sions to accounting estimates are recog-
nised in the period in which the estimates
are revised if the revision affects only that
period, or in the period of the revision and
future periods if the revision affects both
current and future periods.

Changes in accounting policies and
disclosures

(a) New, amended standards, interpreta-
tions not adopted by the Company

Standard

Impact on initial application

Effective date

IFRS 10 and 28
(Amendments)

Sale or Contribution of Assets between Investor
or its Associate or Joint Venture

Postponed

IFRS 17

Insurance Contracts including Amendments to
IFRS 17: Insurance Contracts

1 January
2023

Amendments to
IFRS 3

Business combinations – Reference to Concep-
tual Framework

1 January
2022

IFRS 16
(Amendments)

IAS 37
(Amendments)

* Subject to endorsement

Property, plant and equipment

1 January
2022

Provisions, contingent liabilities and contingent
assets

*1 January
2022

Management has not yet fully assessed the impact of this standard, but does not believe
it will have a material impact on the financial statements.

Financial instruments

Equity instruments

Financial assets and financial liabilities
are recognised in the statement of finan-
cial position when the Company becomes
party to the contractual provisions of the
instrument. Financial assets are derecog-
nised when the contractual rights to the
cash flows from the financial asset expire or
when the contractual rights to those as-
sets are transferred. Financial liabilities are
derecognised when the obligation speci-
fied in the contract is discharged, cancelled
or expired.

Trade and other receivables

Trade receivables are recognised initially at
fair value and subsequently measured at
amortised cost using the effective interest
method, less provision for impairment. Ap-
propriate provisions for estimated irrecover-
able amounts are recognised in the state-
ment of comprehensive income using the
expected credit loss method. The carrying
amount of these assets approximates their
fair value.

Cash and cash equivalents

Cash and cash equivalents comprise cash
in hand, demand deposits, and other
short-term highly liquid investments that
are readily convertible to a known amount
of cash and are subject to an insignifi-
cant risk of changes in value. The carrying
amount of these assets approximates their
fair value.

An equity instrument is any contract that
evidences a residual interest in the assets of
an entity after deducting all of its liabilities.
Equity instruments issued by the Company
are recorded at the proceeds received, net
of direct issue costs.

Trade and other payables

Trade payables are obligations to pay for
goods or services that have been acquired
in the ordinary course of business from
suppliers. Trade payables are recognised
initially at their fair value and are subse-
quently measured at their amortised cost
using the effective interest rate method.
Due to the short-term nature of these bal-
ances, the carrying amount of trade paya-
bles approximates to their fair value.

Impairment

The Company assesses, on a forward-look-
ing basis, the expected credit losses asso-
ciated with any debt instruments carried at
amortised cost. The impairment method-
ology applied depends on whether there
has been a significant increase in credit risk.
For trade receivables, the Company applies
the simplified approach permitted by IFRS
9, which requires expected lifetime losses to
be recognised against the initial recogni-
tion of the receivables.

Mode Global Holdings Plc Annual Report. For the year ended 31 December 2020.Mode Global Holdings Plc Annual Report. For the year ended 31 December 2020.90 Notes to the Company Financial Statements

Notes to the Company Financial Statements

Share capital

Ordinary shares are classified as equity.

Incremental costs directly attributable to
the issue of new ordinary shares or options
are shown in equity as a deduction, net of
tax, from the proceeds.

Investments in subsidiaries

The Company’s investment in its subsidiar-
ies is carried at cost less provision for any
impairment. Investments denominated in
foreign currency are recorded using the
rate of exchange at the date of acquisition.
The carrying value is tested for impairment
when there is an indication that the value
of the investment might be impaired. When
carrying out impairment tests these would
be based upon future cash flow forecasts,
and these forecasts would be based upon
management judgement.

Critical accounting estimates and
judgments

The Company makes certain judgements
and estimates which affect the reported
amount of assets and liabilities. Critical
judgements and the assumptions used in
calculating estimates are continually eval-
uated and are based on historical experi-
ence and other factors, including expecta-
tions of future events that are believed to
be reasonable under the circumstances.

In the process of applying the Company’s
accounting policies, which are described

above, the directors do not believe that
they have had to make any assumptions
or judgements that would have a material
effect on the amounts recognised in the
financial information.

Financial risk management

The Company’s activities may expose it to
some financial risks. The Company’s overall
risk management programme focuses on
the unpredictability of financial markets
and seeks to minimise potential adverse
effects on the Company’s financial perfor-
mance.

Capital risk

The Company takes great care to protect
its capital investments. Significant due
diligence is undertaken prior to making any
investment. Investments are closely moni-
tored.

Impairment

In the Company’s accounts, intragroup
receivables are carried at cost. An impair-
ment review is conducted annually and the
directors do not believe any impairment
has occurred in 2020. The directors believe
that these amounts are recoverable as the
future revenue streams of the subsidiaries
will be of sufficient value and are therefore
not impaired.

3. Notes to the financial statements

3.1 Personnel

There was no benefits, emoluments, or
remuneration payable during the period for
key management personnel, excluding the
non-executive director listed below in note
3.5.

3.2 Capital risk management

The directors’ objectives when managing
capital are to safeguard the Company’s
ability to continue as a going concern in
order to provide returns for shareholders
and benefits for other stakeholders and to
maintain an optimal capital structure to
reduce the cost of capital. At the date of
this financial information, the Company had
been financed by the introduction of capi-

tal. In the future, the capital structure of the
Company is to consist of borrowings and
equity attributable to equity holders of the
Company, comprising issued share capital
and reserves.

3.3 Investments in subsidiary under-
takings

On 10th September 2020 the Company
acquired 100% of the share capital of Mode
Global Limited in a share-for-share ex-
change. Details can be found below under
share capital.

The principal undertakings in which the
Company has an interest at the period-end
is as follows:

Name

Country of
incorporation

Holding Ownership

Mode Global Limited

United Kingdom

Direct

100%

JGOO Limited

United Kingdom

Indirect

100%

Fibermode Limited

United Kingdom

Indirect

100%

Nature of
Business

Holding
Company

Global Payments
Platform

Mode Digital
Wallet (including
Cryptocurrency)

Greyfoxx Limited

United Kingdom

Indirect

Fibere Limited

United Kingdom

Indirect

100%

Mode for
Business

Dormant

Mode Global Holdings Plc Annual Report. For the year ended 31 December 2020.Mode Global Holdings Plc Annual Report. For the year ended 31 December 2020.92 Notes to the Company Financial Statements

Notes to the Company Financial Statements

3.5 Related party transactions

3.8 Share-based payment reserve

During the year ended 31 December 2020,
the following related party transactions
occurred: -

On 31st October 2020, Mode Global Limited
acquired an additional 45% interest in the
share capital of JGOO Limited, which be-
came the wholly-owned subsidiary of Mode
Global Limited (See note 17 in the consoli-
dated financial statements’ notes).

3.4 Share capital

For details of the share capital see note 15
of the consolidated financial statements.

The Company operates a non-approved
share-based compensation plan, under
which the Company receives services from
employees as consideration for equity in-
struments (options) of Mode Global Hold-
ings plc. The awards were granted on two
separate dates, being October 27th 2020
and 4th November 2020, by Mode Glob-
al Holdings plc, and the fair value of the
employee services received in exchange for
the grant of the options is recognised as an
expense under IFRS 2. A credit is recognised
directly in equity (Share Option Reserve).
The total amount to be expensed was
determined by reference to the fair value of
the total options granted using the Black
Scholes model.

No options can be exercised prior to April
2021, however given that this was within a
closed period, the first exercise date will be
17th June 2021 (subject to accounts being
published on June 17th 2021).

The maximum date that the options can
be exercised is the tenth anniversary of the
Grant Date, and if not exercised before
then the options would automatically lapse.

3.9 Contingent liabilities

The Company has no contingent liabilities
in respect of legal claims arising from the
ordinary course of business.

3.10 Capital commitments

There was no capital expenditure contract-
ed for at the end of the reporting period
but not yet incurred.

3.11 Ultimate controlling party

There is no ultimate controlling party of the
Company.

Director

Ryan Moore
(3.72%)

Company

Transactions

2020

Keve Family
Ltd Partnership

Share Purchase £3,000,000

2020 Fees

Ryan Moore

Directors Fees

£13,333

3.6 Cash and cash equivalents

Cash at the bank and in hand

31 December
2020
£’000

5,054

3.7 Merger relief reserve

exchange with the previous shareholders of
Mode Global Limited.

The merger relief reserve was created to
recognise the excess over par value of the
shares issued as part of the share-for-share

Mode Global Holdings Plc Annual Report. For the year ended 31 December 2020.Mode Global Holdings Plc Annual Report. For the year ended 31 December 2020.