Annual Report and Financial Statements
for the year ended 31 December 2019
Mobile Tornado Group plc
Company registration number: 5136300
Contents
Page 1
PageStrategic report2Directors’ report10Independent auditors' report20Consolidated income statement25Consolidated statement of comprehensive income25Consolidated statement of financial position26Consolidated statement of changes in equity27Consolidated statement of cash flows28Notes to the financial statements29Company balance sheet - prepared under FRS10256Company statement of changes in equity57Notes to the Company financial statements - prepared under FRS10258Corporate information67
Strategic report
Introduction
Mobile Tornado Group plc, the leading provider of instant communication mobile
applications to the enterprise market, announces its results for the year ended 31
December 2019.
Financial Highlights
•
Total revenue increased by 16% to £3.45m (2018: £2.97m)
o Recurring revenues remained largely unchanged at £2.06m (2018:
£2.05m)
o Non-recurring revenues* increased by 50% to £1.39m (2018: £0.93m)
• Gross profit increased by 19% to £3.17m (2018: £2.66m)
• Adjusted (pre IFRS 16) operating expenses before depreciation, amortisation,
exceptional items and exchange differences decreased by 3% to £3.45m (2018:
£3.55m)
• Adjusted EBITDA** (pre IFRS 16) loss of £0.28m (2018: £0.89m)
• Group operating loss for the year decreased to £0.32m (2018: £1.28m) and at an
•
adjusted (pre IFRS 16) level decreased to £0.33m (2018: £1.28m)
Loss after tax of £0.82m (2018: £1.54m) and at an adjusted (pre IFRS 16) level of
£0.80m (2018: £1.54m)
• Basic loss per share of 0.23p (2018: 0.47p) and at an adjusted (pre IFRS 16) level
of 0.22p (2018: 0.47p)
• Cash at bank of £0.26m (2018: £0.35m) with net debt of £8.62m (2018: £8.07m)
and at an adjusted (pre IFRS 16) level of £8.05m (2018: £8.07m)
* Non-recurring fees comprising installation fees, hardware, professional services and
capex license fees
**Earnings before interest, tax, depreciation, amortisation, exceptional items and
excluding exchange differences
Operating highlights
• Breakeven EBITDA milestone achieved in the second half of the year for the first
time
• Bundled push-to-talk (PTT) sales contributed to significant growth in non-recurring
revenue over the period
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Pre-IFRS 16201920192018£'000£'000£'000Recurring revenue2,0632,0632,049Non-recurring revenue*1,3911,391925Total revenue3,4543,4542,974Gross profit3,1743,1742,659Administrative expenses(3,164)(3,452)(3,547)Adjusted EBITDA**10(278)(888)Group operating loss(324)(333)(1,283)Loss before tax(1,028)(1,010)(1,902)
Strategic report
•
Increased activity with dedicated PTT reseller partners is widening distribution
capability and has led to significant sales pipeline increase
• Strategic client wins in multiple territories and across array of customer types
including government agencies, municipalities and large enterprises
• Major public safety contract negotiations taking place in 3 continents
• Sustained product development programme materially enhances platform
capability with additional features and functionality including enhanced encryption,
cyber security and recording capabilities
• Recent support to international efforts to address the COVID 19 crisis where the
Company’s public safety grade PTT system can be rapidly deployed to meet
communications needs in national emergency situations
Financial results and key performance indicators
Total revenue for the year ended 31 December 2019 increased by 16% to £3.45m (2018:
£2.97m). Recurring revenues remained largely unchanged at £2.06m (2018: £2.05m).
Non-recurring revenues, comprising installation fees, hardware, professional services and
capex license fees increased to £1.39m (2018: £0.93m). This was a target area for
delivering growth during the financial year and the Board is pleased with the increase of
50%. As a result, gross profit increased by 19% to £3.17m (2018: £2.66m).
Our adjusted (pre IFRS 16) operating expenses before depreciation, amortisation,
exceptional items and exchange differences in the year decreased by 3% to £3.45m
(2018: £3.55m), reflecting the continued positive impact those previous investments in
the development and operating efficiencies of our enhanced technical platform have
delivered.
Due to the annual revaluation of certain financial liabilities on the balance sheet, the Group
reported a translation gain of £0.08m (2018: loss of £0.14m) arising from the appreciation
of sterling relative to other operating currencies as at 31 December 2019 versus the
previous year end. The Group recorded a net income tax credit of £0.21m (2018:
£0.37m).
The adjusted (pre IFRS 16) loss after tax for the year decreased to £0.80m (2018: loss of
£1.54m) and a reduced adjusted (pre IFRS 16) basic loss per share of 0.22p (2018:
0.47p).
The adjusted (pre IFRS 16) net cash outflow from operating activities reduced by 46% to
£0.99m (2018: £1.85m). At 31 December 2019, the Group had £0.26m cash at bank
(2018: £0.35m) and adjusted (pre IFRS 16) net debt of £8.05m (31 December 2018:
£8.07m).
Results and dividends
The Directors do not recommend the payment of a dividend in respect of the year ended
31 December 2019 (year ended 31 December 2018: nil). The Company currently intends
to reinvest future earnings to finance the growth of the business over the near term.
Review of Operations
2019 was a year of solid progress and positive growth for the business in all areas. Despite
the shortfall in anticipated sales as announced in the full year trading update, the overall
financial performance of the business was very positive and we are pleased to announce
that we achieved a breakeven EBITDA position in the second half of the year for the first
time.
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Strategic report
We experienced a further material increase in non-recurring revenues (overall increase of
50% year on year to £1.39m (2018: £0.93m)) attributed largely to the continued sales
from our bundled PTT offering. Building on the success from last year, I am pleased to
report that this solution continues to be distributed seamlessly and efficiently through our
Israeli MNO partner in an easy access end-to-end format and into an expanding blue-chip
customer base made up of large multinational enterprises, transport companies,
international logistics businesses, government entities and municipalities. The additional
sales margin and up-front cash flow benefits of this business has been welcome and we
expect to see further acceleration of bundled PTT sales both into new customers and
through the continual upsizing in our deployments with existing customers.
Our recurring revenues (unchanged year on year at £2.06m (2018: £2.05m) incurred a
small amount of customer license churn on our legacy system deployments, however these
were offset through growth in license sales via our reseller partner channels especially in
LATAM. We have made a concerted effort to expand, educate, and provide technical
support to our network of high-quality reseller partners and the sales pipeline numbers are
extremely promising.
Achieving a breakeven adjusted (pre IFRS 16) EBITDA in the second half of the year was a
financial milestone for the business despite our revenue performance being behind the
market expectations. It will build confidence in the growing financial stability of the
business as well as open up a wider range of available capital and funding solutions to
support further growth if required.
The overall adjusted (pre IFRS 16) EBITDA loss for the year was a material improvement
on last year and was achieved with a constant overhead, demonstrating the operational
gearing and cash generation potential which sits in the platform. We continue to look at
cost improvements in the business whilst maintaining the maximum available budget
allocated to R&D and investment in our platform.
Mobile Network Operators (MNO’s)
The Company has partnered with the leading MNO’s in each of its key strategic regions
(Africa, Latin America and Israel) and these ongoing relationships remain strong.
In Israel, our bundled PTT solutions continued to sell well into our MNO client’s customer
base throughout the year. The crowded operator market adds to the competitive dynamics
here but our ability to offer our public safety grade PoC platform at increasingly lower cost
widened both the competitive price appeal of our leading solutions as well as the
addressable market. Within the sales mix were public utilities, local authorities and
government agencies, along with a range of multinational enterprise customers within the
transport, logistics and industrial sectors. The bundled solution which is a full end-to-end
proposition (comprising server platform, devices, applications and dispatch console,
alongside an embedded perpetual PTT license) had the desired effect of materially
reducing the sales cycle for our proposition and brought about a positive effect on the
Group's cashflow and profitability. The iDEN switch-off date in Israel scheduled for the end
of 2019 was further delayed into H1 2020. We expect to generate increased sales from
customers looking for replacement solutions when this finally takes place.
We have maintained for some time that Africa is a key strategic territory for the company
due to the technical superiority we have in regions where the cellular infrastructure is
underinvested or dated. Currently, we remain the only cellular PTT provider able to deliver
a public safety grade market solution that can transition seamlessly across 2G, 3G, 4G and
WiFi networks, delivering an uninterrupted service to the user.
In South Africa, we submitted a tender for the deployment of our public safety grade PTT
solution across a major government agency. Extensive trials were successfully concluded,
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Strategic report
and we anticipate a deal will conclude in H1 2020. We believe that successful placement
and launch of our services into this entity will be the catalyst for further parallel
opportunities in the region and we are involved with multiple tenders across government
agencies, public authorities and enterprises which would support this ambition.
In South America, we sold and commissioned a new server platform with 100,000 PTT
user capacity for a major MNO partner in Colombia. I am delighted to report that following
completion our partner has begun to load the system with newly licensed PTT customers,
including one of the largest bus groups in Colombia. This deal clearly demonstrates the
strength of our end-to-end public safety grade solution within a private network context
where we have delivered the required business-critical needs of the customer which
encompassed high levels of reliability, quality of service, low latency, security and
coverage. As a consequence of the significant reduction in the cost of ownership for a
private system such as this, we are seeing many similar types of opportunities opening up
for us as a result.
Independent Solution Vendors (ISVs) and Software Integrators
Over the last 12 months, we have concentrated our efforts in supporting the development
of our resellers in our key market territories, namely South America and Africa. We were
able to shift significant resources and attention to support our key reseller partner network
last year as well as successfully adding three new regionally focused high-quality partners
in Brazil, UK and the Republic of Ireland.
Our third party reseller capabilities are becoming an area of increasing focus for us and are
a source of significant recurring revenue potential. We continue seek partnerships with
regional and business sector specialist PTT partners as a means to provide access to our
products through their respective distribution channels or via their own platform.
Investment and R&D
In response to the ongoing transformation we are witnessing in public safety and
enterprise communications, we continue to make significant investment into our
technology platform.
We have said for many years that public safety and business critical communications have
been over reliant on private land mobile radio (LMR) networks and narrowband solutions
with limited functionality. With the increasing demand for exchange of other types of data,
and the need for additional features and functionality these legacy LMR networks need
replacing more than ever, and cellular networks are more reliable and capable of meeting
current and future customer requirements.
One of the key areas we have focussed on during the last 12 months, is the increasing
market need for private networks. In all customer segments in which we operate, the
pursuit of enhanced operating models that improve security and productivity through
improved communication, data analytics and automation are prevalent. Typical cases
include workforce management, worker health and safety, safety area management,
preventative maintenance and real-time situation awareness solutions. These user
situations require high network and system performance levels, together with data
management capacity, reliability, quality of service, latency, security and in some cases
flexible coverage. Our business critical cellular based solution, which delivers public safety
standards, is well suited to meet the requirements in many of these cases.
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Strategic report
The key requirements of private network solution can be summarised as follows -
Availability - high availability means that the end user can always use the service and the
service must be built so that downtime is virtually zero - our system has better than
99.999% availability across several continents.
Capacity - the user capacity of the system must be extensive and flexible - our system can
be deployed to support as many as 1 million registered users which is a must have
requirement for large-scale systems - the system also allows for over 100,000 group
channels to be set up.
Quality of Service - this comprises throughput, latency, jitter, packet drop rate and more -
our solution has the highest user group capacity in the PoC market and facilitates the field
user or dispatcher to make an announcement call to as many as 7,500 users in the group
in less than 1 second - our solution also enables field personnel to share video and image
data with all other members of the group or the control room dispatcher to coordinate
operations.
Security - Private networks are expected to provide full end-to-end security to ensure
information, infrastructure and people are protected from threats - through the recent
work we have done with governmental clients our calls can be encrypted with enhanced
AES-265 to ensure absolute security and could be used by military and special forces users
- we also make available a recording system to record all calls made on the system for
future investigations if required.
Speed – how quickly a system can be deployed - our private systems can be specified,
configured and deployed in less than a week.
The focus of our technical development activity has continued to centre around the
robustness and efficiency of our platform, and its feature set. The costs of deploying our
end-to-end public safety grade platform continue to fall, widening our addressable market
at both the higher and lower end. In addition to our technical development programme, we
continue to engage with the major rugged handset manufacturers. We are constantly
reviewing the new low cost rugged PoC handsets that are now emerging as the market
expands to ensure we are able to offer our customers the best value and overall
performance.
Principal risks and uncertainties
The management of the business and the nature of the Group’s strategy are subject to a
number of risks.
The Directors have set out below the principal risks facing the business. The Directors are
of the opinion that a thorough risk management process is adopted, which involves the
formal review of all the risks identified below. Where possible, processes are in place to
monitor and mitigate such risks.
Product obsolescence
Due to the nature of the market in which the Group operates, products are subject to
technological advances and as a result, obsolescence. The Directors are committed to the
research and development strategy in place and are confident that the Group is able to
react effectively to the developments within the market.
Indirect route to market
As described above, one of the Group’s primary channels to market are MNOs reselling our
services to their enterprise customers. Whilst MNOs are ideally positioned to forward sell
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Strategic report
our services and are likely to possess material resources for doing so, there remains an
inherent uncertainty arising from the Group’s inability to exert full control over the sales
and marketing strategies of these customers.
Going concern and funding
The Financial Statements are prepared on a going concern basis.
When determining the adoption of this approach the Directors have considered a wide
range of information relating to present and future conditions, including the current state
of the Balance Sheet, future projections, cash flow forecasts, access to funding, ability to
successfully secure additional investment, available mitigating actions and the medium-
term strategy of the business.
As noted above, 2019 represented a significant year of delivery for the Group, both in
terms of financial performance and technical development and as we look ahead into 2020,
the Group expects to continue this upward trajectory across its three key geographical
markets.
In common with many businesses at this stage of development, the Group is dependent on
its ability to meet its cash flow forecasts. Within those forecasts the Group has included a
number of significant payments and receipts based on its best estimate but, as with all
forecasts, there does exist some uncertainty as to the timing and size of those payments
and receipts. In particular the forecasts assume the ongoing deferral and phased payment
of some of the Group’s creditors (as disclosed in note 15 to the financial statements), and
the continuation at the current level of both the recurring revenue and a significant
increase in the level of non-recurring revenues, including receipts from new services to
existing customers in the current quarter. In the event that some or all of these receipts
are delayed, deferred or reduced, or payments not deferred, management has considered
the actions that it would need to take to conserve cash. These actions would include
significant cost savings (principally payroll based) and/or seeking additional funding from
its shareholders, for which there is currently no shareholder commitment requested. These
conditions, along with the other matters explained in note 1 to the financial statements,
indicate the existence of a material uncertainty which may cast significant doubt about the
Group’s ability to continue as a going concern. The financial statements do not include the
adjustments that would result if the Group was unable to continue as a going concern.
Since the balance sheet date, a global pandemic (COVID-19) has occurred. This is an
unprecedented event and its full economic impact on the global economy remains
uncertain. A significant number of governments have enforced home-working measures
and instructed certain sectors to close temporarily. All of our staff are currently
homeworking and we are in the relatively fortunate position where this can continue to be
done efficiently and without any material disruption to service and operations.
We recognise the additional uncertainty this pandemic brings to our financial forecasts and
projections. We are confident that our long-established recurring revenue customer base,
together with our supportive principal creditors, provide us with a firm foundation on which
to mitigate its wider economic impact. The Board has modelled various scenarios for the
impact COVID-19 may have and measures it will take to counter its impact.
The Directors, while noting the existence of a material uncertainty and having considered
the possible management actions as noted above, are of the view that the Group is a
going concern and will be able to meet its debts as and when they fall due for a period of
at least 12 months from the date of signing these accounts.
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Strategic report
Outlook
There has been a clear shift in the global demand for PoC solutions over the past 12
months which is very positive for the company given its offering and strategic position. At
the mission-critical end of the market existing narrowband LMR networks are reaching the
end of their useful life and customers are starting to migrate to new cellular solutions. We
are seeing enterprises with similar business critical needs follow suit. The work to improve
the accessibility of our public safety grade platform only serves to widen the addressable
market at the lower end.
The COVID-19 pandemic has clearly created unprecedented challenges for businesses
around the world. Our absolute priority has been to ensure the wellbeing of our people,
and accordingly we are following the UK, Israel and Indian Government’s advice, with our
teams now predominantly working from home. We are confident that our recalibrated
internal controls, and commitment from our people, will ensure limited disruption to our
engagement with partners and customers.
During a nationwide emergency most countries need to mobilize their emergency services
which include the police, Emergency Medical Services, and in many cases volunteer
organizations that provide support to the public. The biggest problem during these
situations is coordination and a reliable communication system. Unfortunately, most
countries have a limited communication system that is usually used by just one of these
groups and coordination becomes the biggest issue.
The rapid deployment of a nationwide communication system based on traditional LMR is
almost impossible as it takes months and sometime years to deploy. Mobile Tornado
delivers the perfect communication solutions during these emergencies across the cellular
system provided by the Mobile Network Operators.
Unlike most of the consumer grade solution offered by PTT vendors, we are able to provide
a carrier grade communication solution that can deliver the following features and
functionality:
•
•
•
•
•
•
•
•
•
the most reliable network of servers with a 1+N geo-redundancy and better than
99.999% availability located in several continents
the capacity of each system can be as high as 1,000,000 registered users, a must
have requirement for very large-scale systems - over 100k groups/channels can be
set-up.
public safety personnel can use rugged devices or Android or iOS based
smartphones to communicate
every user can make 1-1 calls, group call or create an ad-hoc group on the fly.
state of the art Dispatch Consoles for control rooms that can be setup in hours,
can monitor up to 18 channels simultaneously, provide the location of every user
on the map and dispatch the right people using the closest man to the incident
scheme with smart geo-fence algorithm
the dispatcher can make announcement calls to as many as 7,500 users in the
field during an emergency to notify all public safety workers, in less than 1 second
- this is a unique and exclusive feature of the system.
field personnel can send pictures and video files to all other members of the group
or the control room dispatcher to coordinate the operation
all calls are encrypted with enhanced AES-256 to ensure absolute security allowing
the systems to be used by special forces including the military.
a recording system is available to record all calls made on the system for future
investigations
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Strategic report
We are in specific discussions with our partners and MNOs in all territories to understand
how our systems can assist their customers. We are in public safety tenders for emergency
services end users in 3 continents for the first time and through the work we have done
with our reseller partners in Africa and South America I am confident we will see increases
in recurring revenues over the coming months.
However, whilst the Board remains extremely optimistic about the prospects of the Group,
it cannot be known with any certainty at this stage what impact the COVID-19 pandemic
and resultant restrictions being imposed by governments will have on Mobile Tornado’s
trading for the current financial year.
There is clearly considerable uncertainty in the market at present, but we believe we are
well placed to deliver further progress during 2020.
Approved by the Board of Directors and signed on behalf of the Board
Jeremy Fenn
Chairman
8 April 2020
Page 9
Directors’ report
The Directors present their annual report and audited financial statements of the Company
and the Group for the year ended 31 December 2019.
Share issues
The Company completed on 31 July 2019 a placing of 15.0m shares at 5p per share to
raise £0.75m to support the working capital requirements of the Company.
On the same date, the Company issued 15,504,687 new ordinary shares to InTechnology
plc at 5p per share as capitalisation of £0.78m indebtedness owed by the Company to
InTechnology plc.
Directors
The Directors of the Company who were in office during the year and up to the date of
signing the financial statements were:
• Peter Wilkinson became Non-Executive Director on 30 September 2016, having
previously served as Non-Executive Chairman since his appointment to the Board
on 24 November 2006. Peter is currently Chief Executive of InTechnology plc.
Peter was formerly Chairman of Sports Internet Group plc which was sold to BSkyB
plc for £301 million in May 2000. He also founded the free ISP model Freeserve,
the internet access service which was launched by Dixons Group plc.
•
Jeremy Fenn became Executive Chairman on 30 September 2016, having
previously served as Chief Executive Officer and acting Finance Director since his
appointment to the Board on 24 November 2006. Jeremy is a qualified chartered
accountant and was formerly Chief Executive of Sports Internet Group plc.
Following the sale of that business he remained as a Director of Skysports.com
until December 2003. Prior to this he was Managing Director of Leeds United
Football Club from 1996 to 1999.
• Avi Tooba was appointed as Chief Executive Officer on 30 September 2016. Avi
was previously the senior Director of engineering at Motorola Solutions overseeing
engineering and some 500 engineers at the Israel Design Centre. He managed the
Public Safety LTE subscriber devices, TETRA subscribers (European standards) and
P25 devices and infrastructure (US standards). Prior to that, he was Director of
engineering at Motorola Networks which was later sold to Nokia for an estimated
US$1 billion.
•
Jonathan Freeland was appointed to the Board as an independent non-executive
Director on 9 February 2018. Jonathan has 20 years' experience in financial
services across wealth and investment banking, private equity and commercial
lending. He was a Partner at Venn Partners LLP, the specialist private credit
investment manager, from 2011-2015. He is currently CEO of Waveney Capital
Management Ltd a credit focussed investment business he founded in 2016.
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Directors’ report
The Directors and their families have the following beneficial interests in the ordinary share
capital of the Company:
Third party indemnity insurance is in place for the four Directors above. This was in force
during the year and at the date of this report.
Details of related party transactions involving Directors of the Company are given in note
21 to the Group financial statements.
Directors’ emoluments
The remuneration of the Directors of the Company was as follows:
Interests in share options
Set out below are details of share options that have been granted to Directors:
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31 December31 Decembernumber%number%Peter Wilkinson38,146,141 10.038,146,141 10.9Jeremy Fenn12,184,752 3.212,184,752 3.5Avi Tooba4,000,000 1.14,000,000 1.1Jonathan Freeland3,381,014 0.93,181,014 0.920182019Benefits20192018in kindTotalTotal£'000£'000£'000£'000£'000Peter Wilkinson- 28 - 28 66 Jeremy Fenn6 120 2 128 127 Avi Tooba113 - 43 156 147 Jonathan Freeland- 18 - 18 17 Aggregate emoluments119 166 45 330 357 SalaryFeesNo. of shareExerciseGrantEarliestExpiryNo. of share optionspricedateexercisedate options2019pencedate2018Jeremy Fenn3,000,000 7.503/01/1203/01/1503/01/223,000,000 Jeremy Fenn3,000,000 6.515/06/1715/06/2015/06/273,000,000 Total6,000,000 6,000,000 Avi Tooba2,000,000 2.016/05/1616/05/1931/12/262,000,000 Avi Tooba2,000,000 4.004/11/1604/11/1931/12/262,000,000 Avi Tooba3,000,000 6.515/06/1715/06/2015/06/273,000,000 Avi Tooba1,000,000 5.028/02/1928/02/2228/02/29- Total8,000,000 7,000,000
Directors’ report
Substantial shareholdings
Following the capitalisation transaction noted above, InTechnology plc held 193,013,822
shares (31 December 2018: 177,509,135) in the Company representing 50.8% of the
issued ordinary share capital and 71,276,735 non-convertible cumulative redeemable
preference shares with aggregate nominal value of £5.7m.
Corporate governance
Since September 2018 all AIM Companies have been required to comply with a recognised
corporate governance code. Mobile Tornado Group plc has chosen the Quoted Companies
Alliance (QCA) Corporate Governance Code published in April 2018 for this purpose. High
standards of corporate governance are a priority for the Board and details of how Mobile
Tornado addresses key governance principles defined in the QCA code are set out below.
1. Establish a strategy and business model which promote long-term value for
shareholders
The strategy and business operations of the Group are set out in the Strategic Report on
pages 2 to 9.
The Group’s strategy and business model and amendments thereto, are developed by the
Chief Executive Officer and his senior management team and approved by the Board. The
management team, led by the Chief Executive Officer, is responsible for implementing the
strategy and managing the business at an operational level.
The Group operates in an inherently high risk sector and this is reflected in the principal
risks and uncertainties set out on pages 6 and 14. In executing the Group’s strategy and
operational plans, management will typically confront a range of day-to-day challenges
associated with these key risks and uncertainties and will seek to deploy the identified
mitigation steps to manage these risks as they manifest themselves.
2. Seek to understand and meet shareholder needs and expectations
The Group seeks to maintain a regular dialogue with both existing and potential new
shareholders in order to communicate the Group’s strategy and progress and to
understand the needs and expectations of shareholders.
Beyond the Annual General Meeting, the Chief Executive Officer and, where appropriate,
other members of the Board meet regularly with investors and analysts to provide them
with updates on the Group’s business and to obtain feedback regarding the market’s
expectations of the Group.
The Group’s investor relations activities encompass dialogue with both institutional and
private investors and which the Board considers have proved beneficial. The Company’s
AGM provides an opportunity for all shareholders to address their needs and expectations
to the Board so we encourage our shareholders to attend the AGM.
3. Take into account wider stakeholder and social responsibilities and their
implications for long-term success
The Group is aware of its corporate social responsibilities and the need to maintain
effective working relationships across a range of stakeholder groups. These include the
Group’s: investors, employees, partners, suppliers and regulatory authorities. The Group’s
operations and working methodologies take account of the requirement to balance the
needs of all these stakeholder groups while maintaining focus on the Board’s primary
responsibility to promote the success of the Group for the benefit of its members as a
whole. The Group endeavours to take account of feedback received from stakeholders,
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Directors’ report
making amendments to working arrangements and operational plans where appropriate
and where such amendments are consistent with the Group’s longer term strategy.
The Group takes due account of any impact that its activities may have on the
environment and seeks to minimise this impact wherever possible. Through the various
procedures and systems it operates, the Group ensures full compliance with health and
safety and environmental legislation relevant to its activities.
4. Embed effective risk management, considering both opportunities and
threats, throughout the organisation
The Board is responsible for the systems of risk management and internal control and for
reviewing their effectiveness. The internal controls are designed to manage rather than
eliminate risk and provide reasonable but not absolute assurance against material
misstatement or loss. The Audit Committee evaluates the effectiveness of these internal
controls on an annual basis or as required.
A summary of the principal risks and uncertainties facing the Group, as well as mitigating
actions, are set out on pages 6 and 14. A comprehensive budgeting process is completed
by the Finance Director once a year and is reviewed and approved by the Board. The
Group’s results, compared with the budget, are reported to the Board on a monthly basis.
The Group maintains appropriate insurance cover in respect of actions taken against the
Directors because of their roles, as well as against material loss or claims against the
Group. The insured values and type of cover are comprehensively reviewed by the Board
on a periodic basis.
The senior management team meet at least twice monthly to consider new risks and
opportunities presented to the Group, making recommendations to the Board and/or the
Audit Committee as appropriate.
5. Maintain the Board as a well-functioning, balanced team led by the Chair
Mobile Tornado’s Board currently comprises two Non-executive Directors and two
Executive Directors. All of the Directors are subject to election by shareholders at the first
Annual General Meeting after their appointment to the Board and will continue to seek re-
election at least once every three years. Directors’ biographies are set out on page 8.
The Board is responsible to the shareholders for the proper management of the Group and
meets at least six times a year to set the overall direction and strategy of the Group, to
review operational and financial performance and to advise on management appointments.
All key operational and investment decisions are subject to Board approval.
The Board considers itself to be sufficiently independent. Whilst Jonathan Freeland is the
only one of the two Non-executive Directors who sit on the Board of the Company
regarded as independent under the Code’s guidance for determining such independence,
the Board considers this to be appropriate for the Group’s current size. The Board will
regularly review the value to the Group and its stakeholders of making further
appointments to the Board.
Non-Executive Directors receive their fees in the form of a basic cash fee. No equity-based
fee arrangements are currently in place. The current remuneration structure for the
Board’s Non-Executive Directors is deemed to be proportionate to the time they are
required to commit to their roles.
Page 13
Directors’ report
6. Ensure that between them, the Directors have the necessary up-to-date
experience, skills and capabilities
The Board considers that all of the Non-Executive Directors are of sufficient competence
and calibre to add strength and objectivity to its activities and bring considerable
experience in operational and financial development of mobile applications services.
Directors’ biographies are set out on page 8.
The Board regularly reviews the composition of the Board to ensure that it has the
necessary breadth and depth of skills to support the ongoing development of the Group.
The Chairman ensures that the Directors’ knowledge is kept up to date on key issues and
developments pertaining to the Group, its operational environment and to the Directors’
responsibilities as members of the Board. The Board also receives regular guidance from
its legal advisers and nominated adviser on key regulatory developments.
Directors’ service contracts or appointment letters make provision for a Director to seek
personal advice in furtherance of his or her duties and responsibilities. No external
advisers have been appointed to assist the board of any of its committees in the past 12
months.
7. Evaluate Board performance based on clear and relevant objectives, seeking
continuous improvement
Evaluation of the performance of the Board is implemented in an informal manner. On an
ongoing basis, Board members maintain a watching brief to identify relevant internal and
external candidates who may be suitable additions to, backup for or succession planning
for current Board members. Given the size of the business, the primary evaluation metric
utilised by the board is the financial performance of the Company.
The Board does not consider that the Company requires a nominations committee, given
the size and nature of the business. As the Company progresses, the Board will consider
the implementation of a nominations committee and more formal internal and external
board appraisal procedures.
8. Promote a corporate culture that is based on ethical values and behaviours
The Board seeks to maintain the highest standards of integrity and probity in the conduct
of the Group’s operations. These values are enshrined in the written policies and working
practices adopted by all employees in the Group. An open culture is encouraged within the
Group, with regular communications to staff regarding progress and staff feedback
regularly sought. The management team regularly monitors the Group’s cultural
environment and seeks to address any concerns than may arise, escalating these to Board
level as necessary.
9. Maintain governance structures and processes that are fit for purpose and
support good decision-making by the Board
The Board has overall responsibility for promoting the success of the Group. The Executive
Directors have day-to-day responsibility for the operational management of the Group’s
activities. The Non-Executive Directors are responsible for bringing independent and
objective judgment to Board decisions.
There is a clear separation of the roles of Chief Executive Officer and Chairman. The
Chairman is responsible for overseeing the running of the Board, ensuring that no
individual or group dominates the Board’s decision-making and ensuring the Non-Executive
Directors are properly briefed on matters. The Chairman has overall responsibility for
corporate governance matters in the Group and chairs the Nomination Committee and the
Corporate Governance Committee. The Chief Executive Officer has the responsibility for
Page 14
Directors’ report
implementing the strategy of the Board and managing the day-to-day business activities of
the Group.
The Board has established an Audit Committee and Remuneration Committee with formally
delegated duties and responsibilities.
The Audit Committee is chaired by Peter Wilkinson and its other member is Executive
Chairman, Jeremy Fenn and normally meets twice a year and has responsibility for,
amongst other things, planning and reviewing the annual report and accounts and interim
statements involving, where appropriate, the external auditors. The Committee also
approves external auditors’ fees and ensures the auditors’ independence as well as
focusing on compliance with legal requirements and accounting standards. It is also
responsible for ensuring that an effective system of internal control is maintained. The
ultimate responsibility for reviewing and approving the annual financial statements and
interim statements remains with the Board.
The Remuneration Committee is chaired by Peter Wilkinson and its other member is
Executive Chairman, Jeremy Fenn and meets as required, but at least once a year, has
responsibility for making recommendations to the Board on the compensation of senior
executives and determining, within agreed terms of reference, the specific remuneration
packages for each of the Executive Directors. It also supervises the Company’s share
incentive schemes and sets performance conditions for share options granted under the
schemes.
10. Communicate how the Group is governed and is performing by maintaining a
dialogue with shareholders and other relevant stakeholders
The Group places a high priority on regular communications with its various stakeholder
groups and aims to ensure that all communications concerning the Group’s activities are
clear, fair and accurate. The Group’s website is regularly updated with announcements or
details of presentations and events as well as the Group’s financial reports.
At the Company’s last AGM, all votes were passed by a significant majority. The Company
will provide details of any resolutions at the Company’s AGMs which receive significant
votes against and seek to understand from shareholders the reasons behind that vote
result. All of the Company’s AGM notices and annual reports and accounts for the past five
years are available to view in the Report and Accounts section of the website.
Audit Committee
The Audit Committee is chaired by Peter Wilkinson and its other member is Executive
Chairman, Jeremy Fenn. Meetings are also attended, by invitation, by the other two
Executive Directors. This committee normally meets twice during the financial year, around
the time of the preparation of the Group’s interim and final results.
The committee assists the Board in ensuring that appropriate accounting policies, internal
financial controls and compliance procedures are in place.
Internal control
The Directors acknowledge their responsibility for the Group’s systems of internal control.
The Group maintains systems of internal controls, including suitable monitoring
procedures, in order to provide reasonable, but not absolute, assurance of the
maintenance of adequate accounting records and the consequent reliability of the financial
information used within the business to identify and deal with any problems on a timely
basis. The monitoring and control procedures include the specification of defined lines of
responsibility and authorisation limits, the delegation of authority, the identification of risks
Page 15
Directors’ report
and the continual process of the preparation of, and reporting against, annual budgets,
forecasts and strategic plans.
Financial risk management
The Group’s financial instruments comprise, principally, cash and short-term deposits and
preference shares from its principal shareholder – InTechnology plc, and various items,
such as trade receivables and trade payables, arising directly from its operations. The main
purpose of these financial instruments is to raise finance for the Group’s operations. The
main risks arising from the Group’s financial instruments are currency risk, interest risk,
liquidity risk and credit risk. The Board’s policies for managing these risks are summarised
as follows:
Currency risk – the Group has no borrowings in foreign currency, and foreign currency
liabilities are matched wherever possible by corresponding foreign currency assets,
however, no formal hedging is performed. Foreign currency bank accounts are utilised
where appropriate. No foreign currency transactions of a speculative nature are
undertaken.
Interest risk – the Group is exposed to interest rate risk as it has loans outstanding on
variable rate terms. Borrowing costs are minimised by ongoing review of the Group’s
cashflow requirements.
Liquidity risk – the Group seeks to ensure sufficient liquidity is available to meet its
foreseeable needs. The Board regularly reviews cash flow projections and the headroom
position to ensure the Group is adequately funded.
Credit risk – the Group’s exposure to credit risk is limited to the carrying amount of its
financial assets at 31 December. In respect of trade and other receivables, the Group is
not exposed to any significant credit risk exposure to any single counterparty or group of
counterparties having similar characteristics. The Group’s customers are generally
companies with whom the Group has strong trading relationships with no recent history of
default. The Group continually monitors its trade receivables and incorporates this
information into its credit risk controls.
Going concern
In preparing the consolidated financial statements the Directors must satisfy themselves
that it is reasonable to adopt the going concern basis. Projections for the Group have been
prepared concerning its future financial performance, its cash flow forecasts and its
liquidity for a period of at least 12 months from the signing of these financial statements.
Within those cash flow forecasts, the Group has included a number of significant payments
and receipts based on its best estimate but, as with all forecasts, there does exist some
uncertainty as to the timing and size of those payments and receipts. In particular, the
forecasts assume the ongoing deferral and phased payment of some of the Group’s
creditors (as disclosed in note 15 to the financial statements), and the continuation at the
current level of both the recurring revenue and an increase in the level of non-recurring
revenues. In the event that some or all of these receipts are delayed, deferred or reduced,
or payments not deferred, management has considered the actions that it would need to
take to conserve cash. These actions would include significant cost savings (principally
payroll based) and/or seeking additional funding from its shareholders (for which there is
currently no shareholder commitment requested). These conditions indicate the existence
of a material uncertainty which may cast significant doubt about the Group’s ability to
continue as a going concern. The financial statements do not include the adjustments that
would result if the Group was unable to continue as a going concern.
Page 16
Directors’ report
Since the balance sheet date, a global pandemic (COVID-19) has occurred. This is an
unprecedented event and its full economic impact on the global economy remains
uncertain. A significant number of governments have enforced home-working measures
and instructed certain sectors to close temporarily. All of our staff are currently
homeworking and we are in the relatively fortunate position where this can continue to be
done efficiently and without any material disruption to service and operations.
We recognise the additional uncertainty this pandemic brings to our financial forecasts and
projections. We are confident that our long-established recurring revenue customer base,
together with our supportive principal creditors, provide us with a firm foundation on which
to mitigate its wider economic impact. The Board has modelled various scenarios for the
impact COVID-19 may have and measures it will take to counter its impact.
The Directors, while noting the existence of a material uncertainty and having considered
the possible management actions as noted above, are of the view that the Group is a
going concern and will be able to meet its debts as and when they fall due for a period of
at least 12 months from the date of signing these accounts.
Results, dividends & future outlook
Detailed commentary of the Group’s results, dividends and future outlook are provided in
the Strategic report on pages 2 to 9.
Employees
The Group places considerable value on the involvement of its employees and has
continued its practice of keeping them informed of matters affecting them as employees
and the various factors affecting the performance of the Group.
The Directors recognise that continued and sustained improvement in the performance of
the Group depends on its ability to attract, motivate and retain employees of the highest
calibre. Furthermore, the Directors believe that the Group’s ability to sustain a competitive
advantage over the long-term depends in a large part on ensuring that all employees
contribute to the maximum of their potential. The Group is committed to improving the
performance of all employees through development and training.
The Group is an equal opportunity employer. The Group’s policies seek to promote an
environment free from discrimination, harassment and victimisation and to ensure that no
employee or applicant is treated less favourably on the grounds of gender, marital status,
age, race, colour, nationality or national origin, disability or sexual orientation or is
disadvantaged by conditions or requirements which cannot objectively be justified. Entry
into, and progression within the Group, is solely determined on the basis of work criteria
and individual merit.
The Group continues to give full and fair consideration to applications for employment
made by disabled persons, having regard to their respective aptitudes and abilities. The
policy includes, where practicable, the continued employment of those who may become
disabled during their employment and the provision of training and career development
and promotion, where appropriate.
Share schemes
Share ownership is at the heart of the Group’s remuneration philosophy and the Directors
believe that the key to the Group’s future success lies in a motivated workforce holding a
stake in the Company. Details of share options granted are set out in note 17 to the
financial statements.
Page 17
Directors’ report
Pension costs
The Group operates a pension scheme and makes contributions to its employees in
adherence with its auto-enrolment obligations. These contributions are charged against
profits. No pension contribution payments have been made to Directors during the year.
Research and development
The Group continues to undertake research and development of new products with the
objective of increasing future profitability. The cost to the Group of £1,199,000 (2018:
£1,161,000) is charged to the income statement as incurred after consideration of the
criteria for capitalisation under IAS 38.
Environment
The Group recognises the importance of environmental responsibility. The nature of its
activities has a minimal effect on the environment but where it does, the Group acts
responsibly and is aware of its obligations at all times.
Statement of Directors’ responsibilities in respect of the financial statements
The Directors are responsible for preparing the Annual Report and the financial statements
in accordance with applicable law and regulation. Company law requires the Directors to
prepare financial statements for each financial year. Under that law the directors have
prepared the group financial statements in accordance with International Financial
Reporting Standards (IFRSs) as adopted by the European
Union and company financial statements in accordance with United Kingdom Generally
Accepted Accounting Practice (United Kingdom Accounting Standards, comprising FRS 102
“The Financial Reporting Standard applicable in the UK and Republic of Ireland”, and
applicable law). Under company law the directors must not approve the financial
statements unless they are satisfied that they give a true and fair view of the state of
affairs of the group and company and of the profit or loss of the group and company for
that period. In preparing the financial statements, the directors are required to:
•
•
•
•
select suitable accounting policies and then apply them consistently;
state whether applicable IFRSs as adopted by the European Union have been
followed for the group financial statements and United Kingdom Accounting
Standards, comprising FRS 102, have been followed for the company financial
statements, subject to any material departures disclosed and explained in the
financial statements;
make judgements and accounting estimates that are reasonable and prudent; and
prepare the financial statements on the going concern basis unless it is inappropriate
to presume that the group and company will continue in business.
The Directors are also responsible for safeguarding the assets of the group and company
and hence for taking reasonable steps for the prevention and detection of fraud and other
irregularities.
The Directors are responsible for keeping adequate accounting records that are sufficient
to show and explain the group and company's transactions and disclose with reasonable
accuracy at any time the financial position of the group and company and enable them to
ensure that the financial statements comply with the Companies Act 2006.
Page 18
Directors’ report
The Directors are responsible for the maintenance and integrity of the company’s website.
Legislation in the United Kingdom governing the preparation and dissemination of financial
statements may differ from legislation in other jurisdictions.
Directors' confirmations
In the case of each Director in office at the date the Directors’ Report is approved:
•
•
so far as the director is aware, there is no relevant audit information of which the
group and company’s auditors are unaware; and
they have taken all the steps that they ought to have taken as a director in order to
make themselves aware of any relevant audit information and to establish that the
group and company’s auditors are aware of that information.
Annual General Meeting
The date for the next AGM of the Company will be announced in due course.
Independent auditors
Saffery Champness LLP, who were appointed as independent auditors during the year,
have indicated their willingness to continue in office and a resolution proposing that they
be reappointed as independent auditors and authorising the Directors to fix their
remuneration will be proposed at the Annual General Meeting.
On behalf of the Board
Jeremy Fenn
Chairman
8 April 2020
Page 19
Independent auditors’ report to the
members of Mobile Tornado Group plc
Opinion
We have audited the financial statements of Mobile Tornado Group Plc (the ‘Company’) and
its subsidiaries (the ‘Group’) (together, the ‘financial statements’) for the year ended 31
December 2019 which comprise the Consolidated income statement, Consolidated
statement of comprehensive income, Consolidated statement of financial position and
Company balance sheet, Consolidated and Company statement of changes in equity,
Consolidated statement of cash flows, Company balance sheet and the notes to the
financial statements, including a summary of significant accounting policies. The financial
reporting framework that has been applied in the preparation of the Group financial
statements is applicable law and International Financial Reporting Standards (IFRSs) as
adopted by the European Union. The financial reporting framework that has been applied
in the preparation of the Company financial statements is applicable law and United
Kingdom Accounting Standards, including Financial Reporting Standard 102, the Financial
Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom
Generally Accepted Accounting Practice).
In our opinion, the financial statements:
•
•
•
•
give a true and fair view of the state of the Group and of the Company’s affairs as
at 31 December 2019 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 Company financial statements have been properly prepared in accordance with
United Kingdom Generally Accepted Accounting Practice; and
the financial statements have been prepared in accordance with the requirements
of the Companies Act 2006.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs
(UK)) and applicable law. Our responsibilities under those standards are further described
in the Auditor’s responsibilities for the audit of the financial statements section of our
report. We are independent of the 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 SME listed entities, and we have fulfilled our other ethical
responsibilities in accordance with these requirements. We believe that the audit evidence
we have obtained is sufficient and appropriate to provide a basis for our opinion.
Material uncertainty relating to going concern – Group and Company
As described in note 1.2 to the Group financial statements and note 3.2 to the Company
financial statements, the Group and Company are dependent on the Group’s ability to
meet its cash flow forecasts, which include a number of important assumptions regarding
the timing and size of payments and receipts. If these forecasts are not met then there
may be a need for management to take action to reduce costs, or to raise additional funds
from the Group’s shareholders (for which there is currently no commitment requested).
These conditions indicate the existence of a material uncertainty, which may cast
significant doubt on the Group’s and Company’s ability to continue as a going concern. Our
opinion is not modified in respect of the matter.
In considering whether there is a material uncertainty in relation to going concern, we
have: obtained and reviewed the cashflow forecasts prepared by management; re-
performed the calculations included in those forecast; considered the accuracy of
managements’ previous forecasts, assessed the risks around the timing and extent of the
significant, cash flows including performing sensitivity analysis on the forecasts to assess
Page 20
Independent auditors’ report to the
members of Mobile Tornado Group plc
the likelihood of achieving the projected revenues and operating expense plans; and
considered the level of headroom that exists on the Group’s currently available facilities.
We also obtained and reviewed the confirmation that he Group has received from its major
shareholder which allows the Group to defer repayment of its shareholder loans and
preference shares for at least the next 12 months.
Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most
significance in our audit of the financial statements of the current period and include the
most significant assessed risks of material misstatement (whether or not due to fraud) we
identified, including those which had the greatest effect on: the overall audit strategy, the
allocation of resources in the audit; and directing the efforts of the engagement team.
These matters were addressed in the context of our audit of the financial statement as a
whole, and in forming our opinion thereon, and we do not provide a separate opinion on
these matters.
Revenue recognition (Group and Company)
The Group has various revenue streams and bespoke contracts with customers. There is a
risk that revenue has not been recognised correctly in accordance with the requirements of
IFRS 15 Revenue from Contracts with Customers.
How our audit addressed the key matter
We have gained a thorough understanding of the revenue streams and associated
performance obligations. We have substantively tested all revenue streams on a sample
basis by reference to contracts, license usage statements, bank statements, and third-
party stock movement reports. We have confirmed that the method of revenue
recognition adopted for each revenue stream is in accordance with the requirements of
IFRS 15.
Based on the work performed, we believe that the Group and Company financial
statements are not materially misstated in relation to the recognition of revenue.
Valuation of goodwill (Company)
Goodwill was recognised in the Company on 31 October 2009 when the trade and assets of
a wholly owned subsidiary were transferred to Mobile Tornado Group Plc. Given that the
Company continues to be loss making there is a risk that goodwill is impaired.
How our audit addressed the key matter
We reviewed forecasts prepared by management in support of the goodwill, and checked
their mathematical accuracy as well as challenging the assumptions made, in particular the
revenue growth rates, and considering the historical accuracy of management’s forecasts.
We have reviewed substantive evidence to support the forecast and the assumptions used
and considered whether the information gathered is consistent with findings from other
areas of our audit. We assessed the discount rate applied within the model to assess
whether an impairment would be required if reasonably possible changes in the discount
rate and other key assumptions occurred.
Based on the work performed, we believe it is reasonable that there is no impairment of
goodwill in the Company financial statements.
Page 21
Independent auditors’ report to the
members of Mobile Tornado Group plc
Our application of materiality
The scope of our audit was influenced by our application of materiality. An audit is
designed to obtain reasonable assurance whether the financial statements are free from
material misstatement. Misstatements may arise due to fraud or error. They are
considered material if individually or in aggregate, they could reasonably be expected to
influence the economic decisions of users taken on the basis of the consolidated financial
statements.
Based on our professional judgement, we determined certain quantitative thresholds for
materiality, including the overall group materiality for the consolidated financial statements
as a whole as set out in the table below. These, together with qualitative considerations,
helped us to determine the scope of our audit and the nature, timing and extent of our
audit procedures and to evaluate the effect of misstatements, if any, both individually and
in aggregate on the financial statements as a whole.
Overall Group materiality was set at £33,000 based on 1% of the expected level of
turnover for the year. We have applied this benchmark based on our analysis of the
information needs of the stakeholders and other users of the consolidated financial
statements. Overall Company materiality was set at £33,000 based on 1% of Company
turnover for the financial year. Performance materiality was set at 90% of materiality.
An overview of the scope of our audit
We conducted our audit in accordance with International Standards on Auditing (ISAs) (UK
and Ireland). Our responsibilities under those standards are further described in the
‘Responsibilities for the financial statements and the audit’ section of our report. We
believe that the audit evidence we have obtained is sufficient and appropriate to provide a
basis for our opinion.
We are independent of the Group in accordance with the Auditing Practices Board’s Ethical
Standards for Auditors, and we have fulfilled our other ethical responsibilities in
accordance with those Ethical Standards.
Our audit approach was based on our understanding of the Group’s business and is risk-
based and included:
•
•
•
•
an evaluation of the components of the Group by the Group audit team based on a
measure of materiality considered as a percentage of Group assets, revenues and
profit before taxes, to assess the significance of the component and to determine
the planned audit response;
a full scope audit performed by the Group audit team for the Parent Company;
evaluation of the Group’s internal controls environment including its systems and
controls; and
a substantive approach using professional judgement to determine the extent of
testing required over each balance in the financial statements.
The Group consists of the Company, incorporated and operating within the UK, and its
subsidiary, located in Israel. The Group is considered to have one significant component
(the UK Company). The UK Company is considered to require a full scope audit for the
Group audit engagement, as it is considered a significant component due to its financial
significance (UK contributes 100% of Group revenue and 97% of losses before tax). The
subsidiary company is not considered a significant component as it contributes no revenue
and less than 3% of the Group’s losses before tax. However due to the significance of the
inventory balance to the group financial statements, specific procedures were performed
by component auditors to address the audit risks in this area. In addition analytical
procedures and substantive procedures were performed over this subsidiary by the Group
audit team.
Page 22
Independent auditors’ report to the
members of Mobile Tornado Group plc
Other information
The Directors are responsible for the other information. The other information comprises
the information included in the annual report, other than the financial statements and our
auditor’s report thereon. Our opinion on the financial statements does not cover the other
information and, except to the extent otherwise explicitly stated in our report, we do not
express any form of assurance conclusion thereon.
In connection with our audit of the financial statements, our responsibility is to read the
other information and, in doing so, consider whether the other information is materially
inconsistent with the financial statements or our knowledge obtained in the audit or
otherwise appears to be materially misstated. If we identify such material inconsistencies
or apparent material misstatements, we are required to determine whether there is a
material misstatement in the financial statements or a material misstatement of the other
information. If, based on the work we have performed, we conclude that there is a
material misstatement of this other information; we are required to report that fact.
We have nothing to report in this regard.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of the audit:
•
•
the information given in the Strategic Report and the Directors’ Report for the
financial year for which the financial statements are prepared is consistent with
the financial statements; and
the Strategic Report and the Directors’ Report have been prepared in accordance
with applicable legal requirements.
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the Group and the 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, or returns adequate for our audit
have not been received from branches not visited by us; or
the financial statements are not in agreement with the accounting records and
returns; or
certain disclosures of directors’ remuneration specified by law are not made; or
we have not received all the information and explanations we require for our audit.
Responsibilities of Directors
As explained more fully in the Directors’ Responsibilities Statement set out on page 18, 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
and Company’s ability to continue as a going concern, disclosing, as applicable, matters
related to going concern and using the going concern basis of accounting unless the
Page 23
Independent auditors’ report to the
members of Mobile Tornado Group plc
Directors either intend to liquidate the Group or the Company or to cease operations, or
have no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements
as a whole are free from material misstatement, whether due to fraud or error, and to
issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of
assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK)
will always detect a material misstatement when it exists. Misstatements can arise from
fraud or error and are considered material if, individually or in the aggregate, they could
reasonably be expected to influence the economic decisions of users taken on the basis of
these financial statements.
A further description of our responsibilities for the audit of the financial statements is
located on the Financial Reporting Council’s website at:
www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s report.
Use of our report
This report is made solely to the Company’s members, as a body, in accordance with
Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so
that we might state to the company’s members those matters we are required to state to
them in an auditor’s report and for no other purpose. To the fullest extent permitted by
law, we do not accept or assume responsibility to anyone other than the company and the
Company’s members as a body, for our audit work, for this report, or for the opinions we
have formed.
Jonathan Davis (Senior Statutory Auditor)
for and on behalf of Saffery Champness LLP
Chartered Accountants
Statutory Auditors
Mitre House
North Park Road
Harrogate
HG1 5RX
8 April 2020
Page 24
Consolidated income statement
For the year ended 31 December 2019
Consolidated statement of comprehensive income
For the year ended 31 December 2019
The accompanying accounting policies and notes form an integral part of these financial
statements.
Page 25
20192018Note£'000£'000Continuing operationsRevenue23,4542,974Cost of sales(280)(315)Gross profit3,1742,659Operating expensesAdministrative expenses(3,164)(3,547)Exchange differences83(138)Exceptional items3- (49)Depreciation and amortisation expense(417)(208)Total operating expenses(3,498)(3,942)Group operating loss before exchange differences,exceptional items & depreciation and amortisation expense10(888)Group operating loss4(324)(1,283)Finance costs5(704)(619)Loss before tax(1,028)(1,902)Income tax credit6211367Loss for the year(817)(1,535)Loss per share (pence)Basic and diluted7(0.23) (0.47) 20192018£'000£'000Loss for the year(817)(1,535)Other comprehensive gain/(loss)Item that will subsequently be reclassifiedto profit or loss:Exchange differences on translationof foreign operations21(28)Total comprehensive loss for the year(796)(1,563)Attributable to:Equity holders of the parent(796)(1,563)
Consolidated statement of financial position
As at 31 December 2019
The financial statements on pages 25 to 55 were approved by the Board of Directors on 8
April 2020 and were signed on its behalf by:
Jeremy Fenn
Chairman
8 April 2020
Company Number: 5136300
Page 26
20192018Note£'000£'000AssetsNon-current assetsProperty, plant and equipment8213219Intangible assets95088Right-of-use assets10558- 821307Current assetsTrade and other receivables111,9761,705Inventories12108151Cash and cash equivalents132643542,3482,210LiabilitiesCurrent liabilitiesTrade and other payables14(4,482)(4,555)Borrowings15(8,311)(2,796)Lease liabilities15(275)- Net current liabilities(10,720)(5,141)Non-current liabilitiesTrade and other payables14(1,776)(2,257)Borrowings15- (5,624)Lease liabilities15(301)- (2,077)(7,881)Net liabilities(11,976)(12,715)Equity attributable to the owners of the parentShare capital167,5956,985Share premium1615,79714,924Reverse acquisition reserve(7,620)(7,620)Merger reserve10,93810,938Foreign currency translation reserve(2,220)(2,241)Accumulated losses(36,466)(35,701)Total equity(11,976)(12,715)
Consolidated statement of changes in equity
For the year ended 31 December 2019
The accompanying accounting policies and notes form an integral part of these financial
statements.
Page 27
ShareShareReverse acquisitionMergerForeign currency translationAccumulatedTotalcapitalpremiumreservereservereserveLossesequity£'000£'000£'000£'000£'000£'000£'000Balance at 1 January 20185,427 12,672 (7,620) 10,938 (2,213) (34,220) (15,016) Equity settled share-based payments- - - - - 54 54 Issue of share capital1,558 2,252 - - - - 3,810 Transactions with owners1,558 2,252 - - - 54 3,864 Loss for the year- - - - - (1,535)(1,535) Exchange differences on translationof foreign operations- - - - (28) - (28) Total comprehensive loss for the year- - - - (28) (1,535) (1,563) Balance at 31 December 20186,985 14,924 (7,620) 10,938 (2,241) (35,701) (12,715) ShareShareReverse acquisitionMergerForeign currency translationAccumulatedTotalcapitalpremiumreservereservereserveLossesequity£'000£'000£'000£'000£'000£'000£'000Balance at 1 January 20196,985 14,924 (7,620) 10,938 (2,241) (35,701) (12,715) Equity settled share-based payments- - - - - 52 52 Issue of share capital610 873 - - - - 1,483 Transactions with owners610 873 - - - 52 1,535 Loss for the year- - - - - (817)(817) Exchange differences on translationof foreign operations- - - - 21 - 21 Total comprehensive loss for the year- - - - 21 (817) (796) Balance at 31 December 20197,595 15,797 (7,620) 10,938 (2,220) (36,466) (11,976)
Consolidated statement of cash flows
For the year ended 31 December 2019
The accompanying accounting policies and notes form an integral part of these financial
statements.
Page 28
20192018Note£'000£'000Operating activitiesCash used in operations18(705) (1,849) Tax received313 493 Interest paid(12)- Net cash used in operating activities(404) (1,356) Investing activitiesPurchase of property, plant & equipment(100) (101) Purchase of right-of-use assets(836)- Net cash used in investing activities(936) (101) Financing activitiesIssue of ordinary share capital1,5251,351Share issue costs(42)(81)Repayment of borrowings15(775)(200)IFRS 16 leases 549 - Net cash inflow from financing activities1,2571,070Effects of exchange rates on cashand cash equivalents(7)9Net decrease in cash andcash equivalents in the year(90)(378)Cash and cash equivalents at beginning of year354732Cash and cash equivalents at end of year264354
Notes to the financial statements
For the year ended 31 December 2019
1 Summary of significant accounting policies
The principal accounting policies applied in the preparation of these consolidated financial
statements are set out below. These policies have been consistently applied to all the
years presented, unless otherwise stated.
1.1
Nature of operations
The principal activity of the Group is the provision of instant communication mobile
applications which serve the market of mobile data services in the mobile communication
industry. The Company is a public limited company which is listed on the Alternative
Investment Market and incorporated and domiciled in England within the UK. The address
of the registered office is Cardale House, Cardale Court, Beckwith Head Road, Harrogate,
HG3 1RY.
1.2
Basis of preparation
The consolidated financial statements have been prepared in accordance with International
Financial Reporting Standards (IFRS), International Financial Reporting Interpretations
Committee (IFRS IC) interpretations endorsed by the European Union and those parts of
the Companies Act 2006 that remain applicable to companies reporting under IFRS. The
financial statements have been prepared on the historical cost basis with the exception of
certain items which are measured at fair value as disclosed in the principal accounting
policies set out below. These policies have been consistently applied to both years
presented unless otherwise stated.
The preparation of financial statements in conformity with IFRS requires the use of
estimates and assumptions that affect the reported amounts of assets and liabilities at the
date of the financial statements and the reported amounts of revenues and expenses
during the reporting period. Although these estimates are based on management’s best
knowledge of the amount, event or actions, actual results ultimately may differ from these
estimates.
Going concern
In preparing the consolidated financial statements the Directors must satisfy themselves
that it is reasonable to adopt the going concern basis. Projections for the Group have been
prepared concerning its future financial performance, its cash flow forecasts and its
liquidity for a period of at least 12 months from the signing of these financial statements.
Within those cash flow forecasts, the Group has included a number of significant payments
and receipts based on its best estimate but, as with all forecasts, there does exist some
uncertainty as to the timing and size of those payments and receipts. In particular, the
forecasts assume the ongoing deferral and phased payment of some of the Group’s
creditors (as disclosed in note 15 to the financial statements), and the continuation at the
current level of both the recurring revenue and an increase in the level of non-recurring
revenues. In the event that some or all of these receipts are delayed, deferred or reduced,
or payments not deferred, management has considered the actions that it would need to
take to conserve cash. These actions would include significant cost savings (principally
payroll based) and/or seeking additional funding from its shareholders (for which there is
currently no shareholder commitment requested). These conditions, along with the other
matters explained in this note to the financial statements, indicate the existence of a
material uncertainty which may cast significant doubt about the Group’s ability to continue
as a going concern. The financial statements do not include the adjustments that would
result if the Group was unable to continue as a going concern.
Page 29
Notes to the financial statements
For the year ended 31 December 2019
Since the balance sheet date, a global pandemic (COVID-19) has occurred. This is an
unprecedented event and its full economic impact on the global economy remains
uncertain. A significant number of governments have enforced home-working measures
and instructed certain sectors to close temporarily. All of our staff are currently
homeworking and we are in the relatively fortunate position where this can continue to be
done efficiently and without any material disruption to service and operations.
We recognise the additional uncertainty this pandemic brings to our financial forecasts and
projections. We are confident that our long-established recurring revenue customer base,
together with our supportive principal creditors, provide us with a firm foundation on which
to mitigate its wider economic impact. The Board has modelled various scenarios for the
impact COVID-19 may have and measures it will take to counter its impact.
The Directors, while noting the existence of a material uncertainty and having considered
the possible management actions as noted above, are of the view that the Group is a
going concern and will be able to meet its debts as and when they fall due for a period of
at least 12 months from the date of signing these accounts.
Significant accounting estimates and judgements
The preparation of these financial statements requires management to make estimates
and judgements that affect the reported amounts of assets and liabilities at the date of the
financial statements and the reported amounts of revenue during the reporting period.
Actual results could differ from these estimates. The key sources of estimation and
judgement are:
Contingent consideration – payments are dependent on estimates of future license sales
revenues (note 14).
Trade and other receivables – recognition of any impairment provisions in respect of
amounts recorded as trade and other receivables is dependent on judgements made on
the recoverability of such items (note 11).
Research and development - distinguishing the research and development phases of the
Group's research and development expenditure and determining whether the recognition
requirements for the capitalisation of development costs are met requires judgement.
Satisfaction of performance obligations - The Group is required to assess each of its
contracts with customers to determine whether performance obligations are satisfied over
time or at a point in time in order to determine the appropriate method for recognising
revenue.
1.3
Basis of consolidation
The Group financial statements consolidate those of the Company and its subsidiary
undertakings at 31 December 2019. A subsidiary is an entity controlled by the Group.
Control is achieved where the Group has the power over the investee; exposure, or rights,
to variable returns from its involvement with the investee; and the ability to use its power
over the investee to affect the amount of the investor's returns. All subsidiaries have a
reporting date of 31 December. All transactions and balances between Group companies
are eliminated on consolidation including unrealised gains and losses on transactions
between Group companies.
1.4
Business combinations
Acquisitions of subsidiaries are dealt with using the acquisition method of accounting. The
acquisition method of accounting involves the recognition at fair value of all identifiable
Page 30
Notes to the financial statements
For the year ended 31 December 2019
assets and liabilities, including contingent liabilities, of the subsidiary at the acquisition
date regardless of whether or not they were recorded in the financial statements of the
subsidiary prior to acquisition. On initial recognition, the assets and liabilities of the
subsidiary are included in the consolidated statement of financial position at their fair
values, which are also used as the bases for subsequent measurement in accordance with
the Group’s accounting policies. Goodwill is stated after separating out identifiable
intangible assets. Any difference between the fair value of assets acquired and the
consideration paid is treated as goodwill in the consolidated statement of financial position.
The results of subsidiaries are included from the date that control commences to the date
that control ceases. Business combinations that preceded the Group’s transition to IFRS on
1 July 2006 have not been restated.
1.5
Revenue recognition
The Group recognises revenue from contracts with customers based on a five-step model
as set out in IFRS 15:
Step 1. Identify contract(s) with a customer: A contract is defined as an
agreement between two or more parties that creates enforceable
rights and obligations and sets out the criteria for every contract
that must be met.
Step 2. Identify performance obligations in the contract: A performance
obligation is a promise in a contract with a customer to transfer a good
or service to the customer.
Step 3. Determine the transaction price: The transaction price is the amount of
consideration to which the Group expects to be entitled in exchange for
transferring promised goods or services to a customer, excluding amounts
collected on behalf of third parties.
Step 4.Allocate the transaction price to the performance obligations in the contract:
For a contract that has more than one performance obligation, the Group
allocates the transaction price to each performance obligation in an amount
that depicts the amount of consideration to which the Group expects to be
entitled in exchange for satisfying each performance obligation.
Step 5. Recognise revenue when (or as) the Group satisfies a performance obligation.
Revenue comprises the fair value of consideration receivable for the sale of licences,
services and goods, excluding inter-company sales and value-added taxes, and represents
net invoice value less estimated rebates, returns and settlement discounts.
Revenue is recognised to the extent it is probable that the economic benefits will flow to
the Group and the revenue and costs, if applicable, can be measured reliably.
License fees
License fees comprise:
Recurring monthly license fee – represents a license fee with a duration of one month and
is recognised at the time the license is sold and delivered to the customer, when at such
point our performance obligations have been materially fulfilled.
Capex license fee – represents a license fee for a period greater than one month.
Contracted fees of this nature are recognised in full when the license is sold and delivered
to the customer, when at such point, our performance obligations have been materially
fulfilled.
Service fees
Service fees comprise:
Page 31
Notes to the financial statements
For the year ended 31 December 2019
Support & Maintenance - recognised on a straight-line basis over the contractual service
period.
Installation and other professional services - recognised when these have been provided to
customer per our contractual deliverables. Where a service contract is of both a material
value and deliverable timeframe, the service fee will be part recognised based on a stage-
of-completion assessment.
Hardware sales
Revenue from hardware sales is recognised when the goods have been received and
accepted by the customer.
1.6
Interest
Interest is recognised on an accruals basis using the effective interest method.
1.7
Operating expenses
Operating expenses are recognised in the income statement upon utilisation of the service
or as incurred.
1.8
Exceptional items
Exceptional items are non-recurring items which are outside the normal scope of the
Group’s ordinary activities such as liabilities and costs arising from a fundamental
restructuring of the Group’s operations. Such items are disclosed separately within the
financial statements.
1.9
Employee benefits
Pension obligations
The Group does not operate a pension scheme but makes contributions to the personal
schemes of some of its employees. These contributions are charged to the income
statement in the period to which the contributions relate.
Share-based payments
The Group operates equity-settled share-based remuneration plans for its employees.
Vesting conditions are non-market based.
The fair value of options granted is recognised as an employee expense with a
corresponding increase in equity. The fair value is measured at grant date and spread over
the period during which the employees become unconditionally entitled to the options. The
fair value of the options granted is measured using the Black-Scholes pricing model, which
takes into account the terms and conditions upon which the options were granted. The
amount recognised as an expense is adjusted to reflect the actual number of share options
that vest.
1.10 Foreign currency translation
The consolidated financial statements are presented in UK Sterling (GBP £000). Sterling is
also the functional currency of the Company.
Page 32
Notes to the financial statements
For the year ended 31 December 2019
Foreign currency transactions are translated into the functional currency of the respective
Group entity, using the exchange rates prevailing at the dates of the transactions (spot
exchange rate). Foreign exchange gains and losses resulting from the settlement of such
transactions and from the re-measurement of monetary items at year-end exchange rates
are recognised in profit or loss.
Non-monetary items measured at historical cost are translated using the exchange rates at
the date of the transaction (not retranslated).
Foreign operations
In the Group’s financial statements, all assets, liabilities and transactions of Group entities
with a functional currency other than sterling (the Group’s presentation currency) are
translated into sterling upon consolidation. The functional currency of the entities in the
Group have remained unchanged during the reporting period.
On consolidation, assets and liabilities of foreign operations have been translated into
sterling at the closing rate at the reporting date. Income and expenses have been
translated into the Group’s presentation currency at the average rate over the reporting
period given that these rates do not fluctuate significantly over the year. Exchange
differences are charged/credited to other comprehensive income and recognised in the
currency translation reserve in equity. On disposal of a foreign operation, the cumulative
translation differences recognised in equity are reclassified to profit or loss and recognised
as part of the gain or loss on disposal.
1.11 Segmental reporting
The Group presents its results in accordance with internal management reporting
information to the chief operating decision maker (Board of Directors). The Group has only
one operating segment. At 31 December, the Board continue to monitor operating results
by category of revenue.
1.12 Taxation
Current tax
Current tax is provided at amounts expected to be paid (or recovered) using tax rates and
laws that have been enacted or substantively enacted at the statement of financial position
date. The tax currently payable is based on taxable profit for the year. Taxable loss
differs from net loss as reported in income statement because it excludes items of income
that are taxable or deductible in other years and it further excludes items that are never
tax deductible.
Deferred tax
The charge for taxation is based on the profits for the year and takes into account taxation
deferred because of temporary differences between the treatment of certain items for
taxation and for accounting purposes.
Temporary differences arise from the inclusion of profits and losses in the accounts in
different periods from which they are recognised in tax assessments and primarily arise as
a result of the difference between tax allowances on property, plant & equipment and the
corresponding depreciation charge. Full provision is made for the tax effects of these
differences using tax rates and laws enacted or substantively enacted at the balance sheet
date.
No provision is made for unremitted earnings of foreign subsidiaries where there is no
commitment to remit such earnings. Similarly, no provision is made for temporary
Page 33
Notes to the financial statements
For the year ended 31 December 2019
differences relating to investments in subsidiaries since realisation of such differences can
be controlled and is not probable in the foreseeable future. Deferred tax assets are
recognised to the extent that it is probable that future taxable profit will be available
against which the temporary differences can be utilised.
1.13 Property, plant and equipment
Property, plant and equipment is stated at historical cost less depreciation. The Group’s
policy is to write off the difference between the cost of all property, plant and equipment
and their residual value on a straight-line basis over their estimated useful lives as follows:
Office equipment
Computer equipment
Leasehold improvement
3-10 years
3-10 years
3-10 years
Reviews are made annually of the estimated remaining lives and residual values of
individual productive assets, taking account of commercial and technological obsolescence
as well as normal wear and tear, and adjustments are made where appropriate. All
individual assets are reviewed for impairment when there are indications that the carrying
value may not be recoverable.
1.14
IFRS 16 Leases
The Company has adopted IFRS 16 Leases from 1 January 2019, replacing IAS 17, using
the modified retrospective approach. The cumulative effect of initial application is
recognised in retained earnings at 1 January 2019 and accordingly comparative
information presented has not been restated.
IFRS 16 has introduced a single on-balance sheet accounting model for lessees. As a
result, the Group, as a lessee, has recognised right-of-use assets representing its rights to
use the underlying assets, and lease liabilities representing its obligation to make lease
payments. The Group has presented its right-of-use assets and lease liabilities on the face
of the balance sheet. The table below summarises the impact on transition:
In relation to those leases under IFRS 16, the Group now recognises depreciation and
interest costs, instead of an operating lease expense. During the year ended 31 December
2019, this amounted to £278,000 of depreciation charges and £27,000 of interest costs
from these leases.
At transition, for leases classified as operating leases under IAS 17, lease liabilities were
measured at the present value of the remaining lease payments, discounted at an
incremental borrowing rate which reflects the characteristics of the underlying lease, at 1
January 2019. The weighted average incremental borrowing rate applied is 5.0%.
Page 34
1 January2019£'000Right-of-use assets732Current lease liabilities(269)Non-current lease liabilities(463)Retained earnings-
Notes to the financial statements
For the year ended 31 December 2019
Right-of-use assets are measured at their carrying amount as if IFRS 16 had been applied
since the lease commencement date, discounted by the Company's incremental borrowing
rate as at 1 January 2019.
The Group has applied the following practical expedients on transition:
· leases for underlying assets that have a low value (less than £5,000)
· a single discount rate applied to its small portfolio of car leases
· to elect not to separate non-lease components from lease components and
instead to account for each lease component and any associated non-lease
component as a single lease component
1.15
Inventories
Inventories are stated at the lower of historical cost and net realisable amount. Net
realisable amount is the estimated selling price in the ordinary course of business less any
applicable variable selling costs. Provision is made for obsolete, slow moving and defective
inventory where appropriate.
1.16
Intangible assets - research and development
Research expenditure, undertaken with the prospect of gaining new scientific or technical
knowledge and understanding, is charged to income in the year in which it is incurred.
Internal development expenditure, whereby research findings are applied to a plan for the
production of new or substantially improved products or processes, is charged to income in
the year in which it is incurred unless it meets the recognition criteria of IAS 38 ‘Intangible
Assets’ which are;
▪ the development costs can be measured reliably;
▪ the project is technically and commercially feasible;
▪ the Group intends to and has sufficient resources to complete the project;
▪ the Group has the ability to use or sell the resulting technology; and
▪ the resulting technology will generate probable future economic benefits.
Measurement uncertainties over economic benefits generally mean that such criteria are
not met. Where, however, the recognition criteria are met, intangible assets are
capitalised and amortised over their useful economic lives from product launch. Intangible
assets relating to products in development are subject to impairment testing at each
balance sheet date or earlier upon indication of impairment. Any impairment losses are
written off immediately to the income statement in operating expenses.
1.17 Equity
Equity comprises the following:
▪ “Share capital” represents the nominal value of equity shares.
▪ “Share premium” represents the excess over nominal value of the fair value of
consideration received for equity shares, net of expenses of the share issue.
▪ “Reverse acquisition reserve” represents the difference between the required total of the
Group’s equity instruments and the reported equity of the legal parent.
▪ “Merger reserve” represents the difference between the nominal value of the share
capital issued by the Company and their fair value at 7 March 2006, the date of the
acquisition of Mobile Tornado International Ltd.
▪ “Foreign currency translation reserve” represents the differences arising from translation
of investments in overseas subsidiaries into Sterling.
Page 35
Notes to the financial statements
For the year ended 31 December 2019
▪ “Accumulated losses” represents retained losses.
All transactions with owners of the parent are recorded separately within equity.
Reverse acquisition and merger reserves were frozen at their previous GAAP values from 1
July 2006, the date of transition to IFRS. The foreign currency translation reserve was
reset to zero at this date.
1.18 Cash and cash equivalents
Cash and cash equivalents comprise cash on hand and demand deposits, together with
other short-term, highly liquid investments that are readily convertible into known
amounts of cash with maturities of three months or less from inception and which are
subject to an insignificant risk of changes in value.
1.19 Financial assets
Initial recognition and measurement
In accordance with IFRS9, ‘Financial Instruments’ the Group has classified its financial
assets as ‘Financial assets at amortised cost’. The Group determines the classification of its
financial assets at initial recognition.
All financial assets are recognised initially at fair value plus, in the case of assets not at fair
value through the Statement of Comprehensive Income, transaction costs that are
attributable to the acquisition of the financial asset.
Subsequent measurement
The subsequent measurement of financial assets depends on their classification as
described below:
a. Financial assets carried at amortised cost
This category applies to trade and other receivables due from customers in the normal
course of business. All amounts which are not interest bearing are stated at their
recoverable amount, being invoice value less provision for any expected credit losses.
These assets are held at amortised cost.
The group classifies its financial assets as at amortised cost only if both of the following
criteria are met:
(i)
the asset is held within a business model with the objective of collecting the
contractual cash flows; and
(ii) the contractual terms give rise on specified dates to cash flows that are solely
payments of principal and interest on the principal outstanding.
Financial assets at amortised cost comprise current trade and other receivables due from
customers in the normal course of business and cash and cash equivalents.
The Group does not hold any material financial assets at fair value through other
comprehensive income or at fair value through the Statement of Comprehensive Income.
The Group does not hold any derivatives and does not undertake any hedging activities.
Trade receivables are initially recognised at their transaction price. The group does not
expect to have any contracts where the period between the transfer of the promised goods
or services to the customer and payment by the customer exceeds one year. As a
consequence, the group does not adjust any of the transaction prices for the time value of
money. Other financial assets are recognised initially at fair value plus transaction costs
that are directly attributable to the acquisition of the financial asset.
Trade and other receivables are measured at amortised cost less provision for expected
credit losses.
Page 36
Notes to the financial statements
For the year ended 31 December 2019
Impairment of financial assets
The Group assesses on a forward-looking basis the expected credit losses associated with
its financial assets measured at amortised cost. The Group applies the simplified approach
to providing for expected credit losses prescribed by IFRS 9, which permits the use of the
lifetime expected loss provision for all trade receivables. To measure the expected credit
losses, trade receivables have been grouped based on shared credit risk characteristics
and the days past due. For other financial assets at amortised cost, the Group determines
whether there has been a significant increase in credit risk since initial recognition. The
Group recognises twelve month expected credit losses if there has not been a significant
increase in credit risk and lifetime expected credit losses if there has been a significant
increase in credit risk.
Expected credit losses incorporate forward looking information, take into account the time
value of money when there is a significant financing component and are based on days
past due; the external credit ratings of its customers; and significant changes in the
expected performance and behaviour of the borrower.
Financial assets are written off when there is no reasonable expectation of recovery.
Where receivables have been written off, the Group continues to engage in enforcement
activity to attempt to recover the receivable due. Where recoveries are made, these are
recognised in the Statement of Comprehensive Income.
Derecognition
A financial asset (or, where applicable, a part of a financial asset or part of a group of
similar financial assets) is derecognised when:
•
•
The rights to receive cash flows from the asset have expired, or
The Group has transferred its rights to receive cash flows from the asset or has
assumed an obligation to pay the received cash flows in full without material delay
to a third party under a ‘pass-through’ arrangement, and either (a) the Group has
transferred substantially all the risks and rewards of the asset, or (b) the Group
has neither transferred nor retained substantially all the risks and rewards of the
asset, but has transferred control of the assets.
1.20 Financial liabilities
Initial recognition and measurement
All financial liabilities are recognised initially at fair value net of directly attributable
transaction costs.
The Group’s financial liabilities include trade and other payables and previously included
loans and other borrowings including Directors loans.
Subsequent measurement
After initial recognition, interest bearing loans and borrowings are subsequently measured
at amortised cost using the effective interest rate method (EIR). Gains and losses are
recognised in the Statement of Comprehensive Income when the liabilities are
derecognised as well as through the (EIR) amortisation process.
Amortised cost is calculated by taking into account any discount or premium on acquisition
and fees or costs that are an integral part of the EIR. The EIR amortisation is included in
finance costs in the Statement of Comprehensive Income.
This category generally applies to interest-bearing loans and borrowings.
Page 37
Notes to the financial statements
For the year ended 31 December 2019
Derecognition
A financial liability is derecognised when the obligation under the liability is discharged or
cancelled or expires. When an existing financial liability is replaced by another from the
same lender on substantially different terms, or the terms of an existing liability are
substantially modified, such an exchange or modification is treated as a derecognition of
the original liability and the recognition of a new liability. The difference in the respective
carrying amounts is recognised in the Statement of Comprehensive Income.
1.21 Contingent consideration
Contingent consideration arising on the acquisition of a business is held as a creditor in the
balance sheet until such time as those amounts are paid. Amounts arising on business
combinations before 1 July 2006, the date of transition to IFRS, were not restated at this
date.
1.22 Standards in issue not yet effective
At the date of authorisation of these financial statements, the following standards and
interpretations which have not been applied in these financial statements were in issue but
not yet effective:
• Conceptual Framework and Amendments to References to the Conceptual
Framework in IFRS Standards
• Amendments to IFRS 3 Business Combinations
• Amendments to IAS 1 and IAS 8: Definition of Material
•
•
•
Interest Rate Benchmark Reform: amendments to IFRS 9, IAS 39 and IFRS 7
IFRS 17 - Insurance Contracts
IAS 1: current debt classification
The Directors are evaluating the impact that these standards will have on the financial
statements of Group.
1.23 New standards and amendments
During the financial year, the Group has adopted the following new IFRSs (including
amendments thereto) and IFRIC interpretations, that became effective for the first time.
IFRS 16 Leases
IFRIC Interpretation 23 – Uncertainty over Income Tax Treatments
•
•
• Amendments to IFRS 9 – Prepayment Features with Negative Compensation
• Amendments to IAS 28 – Long-term Interests in Associates and Joint Ventures
• Annual improvements 2015-2017 cycle
• Amendments to IAS 19: Plan amendment, Curtailment or Settlement
Their adoption has not had any material impact on the disclosures or amounts reported in
the financial statements except for IFRS 16 Leases which has had an impact as further
detailed in the IFRS 16 lease accounting policy note.
Page 38
Notes to the financial statements
For the year ended 31 December 2019
2
Segmental analysis
The Group presents its results in accordance with internal management reporting
information to the chief operating decision maker (Board of Directors). At 31 December
2019 the Board continued to monitor operating results by category of revenue within a
single operating segment, the provision of instant communication solutions. Under IFRS 8
the Group has only one operating segment. Therefore, the results presented in the income
statement are the same as those required under IFRS 8, save for the year end entry of
IFRS 2 share option charge of £52,000 (year ended 31 December 2018: £54,000).
Revenue by category
Revenue is reported by geographical location of customers. Non-current assets are
reported by geographical location of assets.
Of the total revenue of the Group, four customers each represented revenue greater than
10% of this total – these being 23% or £912,000 (2018: 35% or £1,050,000), 20% or
£676,000 (2018: 12% or £345,000), 15% or 525,000 (2018: 11% or £328,000) and 11%
or £369,000 (2018: 3% or £76,000) respectively.
Page 39
20192018£'000£'000License fees2,1852,124Hardware & software451307Professional services609319Other209224Total3,4542,97420192018£'000£'000Recurring2,0632,049Non-recurring1,391925Total3,4542,9742019201920182018Non-currentNon-currentRevenueassetsRevenueassets£'000£'000£'000£'000UK3653110Europe153- 352- North America985- 1,146- South America1,047142117Israel731815695269Africa502- 32911Total3,4548212,974307
Notes to the financial statements
For the year ended 31 December 2019
3
Exceptional costs
These comprise:
•
Trade receivable provision of £nil (2018: £49,000) representing an 8% discount to
the total debt of one particular customer and granted on the basis of a full and
single settlement of the total debt balance as at 31 December 2018.
4
Group operating loss
Auditors’ remuneration
During the year the Group obtained the following services from the Group’s auditors as
detailed below:
5
Finance costs
Page 40
20192018£'000£'000Group operating loss before taxation is stated aftercharging:Staff costs (note 19)2,578 2,380 Depreciation of owned property, plant and equipment (note 8)101 171 Depreciation of leased right-of-use assets (note 10)278 - Amortisation of intangible assets (note 9)38 37 Research and development expenditure1,199 1,161 Other operating lease rentals- 279 Net exchange (gain)/loss(83) 138 20192018£'000£'000Fees payable to the Company's auditors for the auditof the Company's financial statements263720192018£'000£'000Finance charge on preference shares(666) (614) Finance charge on leases(27) - Other interest payable(11)(5)Total finance costs(704)(619)
Notes to the financial statements
For the year ended 31 December 2019
6
Income tax credit
(a) Analysis of credit for the year
(b) Factors affecting the tax credit for the year
Deferred tax:
At 31 December 2019 the Group had accumulated tax losses of £28,857,000 (31
December 2018: £28,857,000) which are available for offset against future trading profits
of certain Group operations, subject to agreement with the relevant tax authorities. No
deferred tax asset has been recognised in respect of these losses given the level of
uncertainty over their recoverability.
7
Loss per share
Basic loss per share is calculated by dividing the loss attributable to ordinary shareholders
of £817,000 (2018: £1,535,000) by the weighted average number of ordinary shares in
issue during the year of 359,770,621 (2018: 326,694,121).
Page 41
20192018£'000£'000United Kingdom current taxAdjustment in respect of prior years- (17) Current year research & development tax credit claimed(261) (364) Prior year research & development tax credit claimed2 - Withholding tax on overseas sales receipts48 - Overseas current tax in respect of prior years- 14 Total credit for the year(211) (367) 20192018£'000£'000Loss before tax(1,028) (1,902) At standard rate of corporation tax of 19.00% (2018: 19.00%)(195) (361) Effects of:Expenses not deductible for tax purposes134 118 Un-utilised tax losses110 243 Current year research & development tax credit claimed(261) (364) Prior year overseas current tax- 14 Prior year research & development tax credit claimed2 (17) Total credit for the year(211) (367) LossLossLossLossper shareper share£'000pence£'000penceLoss attributable toordinary shareholders(817) (0.23) (1,535) (0.47) Adjusted basic loss per share(817) (0.23) (1,535) (0.47) Basic and diluted20192018Basic and diluted
Notes to the financial statements
For the year ended 31 December 2019
The loss attributable to ordinary shareholders and the weighted average number of
ordinary shares for the purpose of calculating the diluted earnings per ordinary share are
identical to those used for basic earnings per ordinary share. This is because the exercise
of share options are anti-dilutive under the terms of IAS 33.
8
Property, plant and equipment
9
Intangible assets
These comprise third party services and internal staff costs in relation to a quality
assurance automation project.
Page 42
OfficeComputerLeaseholdequipmentequipmentimprovementTotal£'000£'000£'000£'000CostAt 1 January 2018771,2421331,451Additions63165102Exchange adjustments347858At 31 December 2018861,3202061,613Additions- 113- 113Disposals(27)(575)(71)(673)Exchange adjustments(2)(35)(8)(46)At 31 December 2019578231271,007Accumulated depreciationAt 1 January 2018531,044781,175Charge for the year715411172Exchange adjustments240547At 31 December 2018621,238941,394Charge for the year48413101Disposals(17)(572)(72)(661)Exchange adjustments(1)(35)(4)(40)At 31 December 20194871531794Net book amount at 31 December 2019910896213Net book amount at 31 December 20182482112219Software£'000At 1 January 201988Amortisation for the year (38)At 31 December 2019 50
Notes to the financial statements
For the year ended 31 December 2019
10
Right-of-use assets
11
Trade and other receivables
The Group had contract assets within trade and other receivables of £139,000 (2018:
£134,000)
Page 43
LeaseholdPropertyVehiclesTotal£'000£'000£'000CostAt 1 January 2018 & 31 December 2018- - - Effect of initial application of IFRS 1665972731Additions- 105105Disposals- (40)(40)At 31 December 2019659137796Accumulated depreciationAt 1 January 2018 & 31 December 2018- - - Charge for the year19880278Disposals- (40)(40)At 31 December 201919840238Net book amount at 31 December 201946297558Net book amount at 31 December 2018- - - 20192018£'000£'000Trade receivables1,576 1,082 Less: provision for impairment of trade receivables(174) (72) Trade receivables - net1,402 1,010 Other receivables275 429 Prepayments and accrued income299 266 1,976 1,705 Current portion1,976 1,705
Notes to the financial statements
For the year ended 31 December 2019
The age of the Group’s year end overdue receivables is as follows:
Of the overdue receivables, £722,000 (2018: £638,000) relates to one particular customer
against which a provision of £51,000 (2018: £49,000) has been made and which reflects a
settlement discount offer that has been made. The Directors have maintained an open
dialogue with this customer throughout the year and since the year end as to their
financial position. In parallel, an assessment of this customer’s ability to pay has been
made by reference to its anticipated capital funding transaction, its current and projected
operating cash flows as well as the level of cash payments received during the year, post
year-end from the customer and, on the basis of this, no further provision has been made.
The carrying amounts of the Group’s receivables are denominated in US dollar, Canadian
dollar and Euros.
The maximum exposure to credit risk at the reporting date is the carrying value of each
class of receivable mentioned above. The Group does not hold any collateral as security.
Movement on the Group’s provision for impairment of receivables is as follows:
12
Inventories
The cost of inventories recognised as an expense and included within cost of sales
amounted to £163,000 (2018: £200,000). Inventories put to internal use during the year
Page 44
20192018£'000£'000ImpairedLess than three months20 - Three to six months43 - Over six months111 72 174 72 Not impairedLess than three months64 182 Three to six months14 87 Over six months745 513 823 782 20192018£'000£'000At 1 January72 56 Provision for receivables impairment102 72 Receivables written off during the yearas uncollectable- (56) 174 72 20192018£'000£'000Hardware108151
Notes to the financial statements
For the year ended 31 December 2019
and therefore transferred to property, plant and equipment amounted to £22,000 (2018:
£nil).
13
Cash and cash equivalents
14
Trade and other payables
The contingent consideration arose on the purchase of intellectual property from Tersync
Limited in 2001 and represents a royalty payable on future sales of Push to Talk related
products by Mobile Tornado, payable in part as consideration for the acquisition of the
rights to the technology underlying such product. The royalty is payable quarterly on any
relevant sales (on a cash receipts basis) as follows:
(i)
50% of the first US$200,000 relevant sales.
(ii)
15% of any additional relevant sales, subject to any related cumulative royalty
payments being capped at a maximum of US$5.3 million. Direct reseller and other third
party costs may be deducted in arriving at these royalty payments, subject to such costs
not exceeding 10% of the relevant sales.
The deferred income balance includes an amount of £2,012,000 (2018: £2,135,000)
received from InTechnology plc in respect of 12 month licenses that had not been brought
into use at the balance sheet date. The Group will recognise related income from the date
of activation of each licence, or the expiration of its obligations if sooner.
Page 45
20192018£'000£'000Cash at bank and in hand:-Sterling17 54 -US Dollar66 53 -Canadian dollar39 96 -Euro7 11 -New israel shekel135 140 264 354 20192018£'000£'000Trade payables861 787 Accruals405 542 Social security and other taxes101 91 Other payables0 4 Deferred income2,104 2,426 Contingent consideration2,787 2,962 6,258 6,812 Less non-current portion: contingent consideration(1,776) (2,257) Current portion4,482 4,555
Notes to the financial statements
For the year ended 31 December 2019
15
Borrowings, other financial liabilities and other financial assets
Maturity analysis
All preference shares are non-voting, non-convertible cumulative redeemable preference
shares. They are currently redeemable at par value on 31 December 2020, or, at the
Company’s discretion, at any earlier date and will accrue interest at a fixed rate of 10 per
cent. per annum. All preferences shares and accrued interest thereon are thus classified as
repayable in one year or less.
The loan balance of £2,090,000 provided by InTechnology plc is repayable on demand and
thus classified as repayable in one year or less.
InTechnology plc provides the Group with a £300,000 loan facility (2018: £300,000). As at
31 December 2019, the balance on this facility was £nil (31 December 2018: £nil). Further
details of this facility can be found in note 22.
InTechnology plc has agreed not to demand repayment of all amounts due for payment in
one year or less, for a period of at least 12 months from the date of signing of the financial
statements. Further, InTechnology plc has confirmed its willingness, should the Group
request, to extend the redemption date on these preference shares until 31 December
2021.
The Group do not have any derivative financial liabilities at 31 December 2019 or 31
December 2018.
Financial risks
The main financial risks faced by the Group include interest rate risk, liquidity risk, credit
risk and foreign currency risk. The Board reviews and agrees policies for managing each
of these risks.
Page 46
20192018£'000£'000Preference shares6,221 6,330 Loans from related party undertakings2,090 2,090 Finance leases576 - Total borrowings8,887 8,420 Preference shares and loans20192018£'000£'000In one year or less8,311 2,796 Between two and five years- 5,624 Total8,311 8,420 Lease liabilities20192018£'000£'000In one year or less275 - Between two and five years301 - Total576 -
Notes to the financial statements
For the year ended 31 December 2019
The Group’s financial instruments comprise cash, liquid resources and various items, such
as receivables and payables that arise directly from its operations. It is, and has been
throughout the year under review, the Group’s policy that no trading in financial
instruments shall be undertaken. The year-end position reflects these policies and there
have been no changes in policies or risks since the year end.
Financial asset returns are maximised by ongoing review of the Group’s cash flow
requirements. Any funds surplus to short-term working capital requirements are placed on
interest bearing deposit.
Interest rate risk profile of financial assets
The interest rate risk profile of the financial assets of the Group comprise cash of £264,000
(2018: £354,000) as follows:
The Sterling, US dollar and Euro financial assets relate to cash at bank and bear interest
based on GBP LIBOR, US dollar LIBOR and EURIBOR respectively. There are no fixed rate
financial assets (2018: £nil).
Interest rate risk profile of financial liabilities
The interest rate profile of the financial liabilities of the Group is as follows:
Further details of which can be found in note 22.
Page 47
20192018£'000£'000CurrencySterling17 54 US dollar66 53 Canadian dollar39 96 Euro7 11 Israel shekel135 140 Total264 354 Floating rate20192018£'000£'000Loans from related party undertakings2,090 2,090 Total2,090 2,290 Floating
Notes to the financial statements
For the year ended 31 December 2019
Currency risk
The table below shows the extent to which the Company held monetary assets and
liabilities in currencies other than their local currency.
Sensitivity analysis
Financial assets and liabilities are sensitive to movements in interest rates and foreign
exchange rates.
A 10% movement in both sterling to US dollar and Euro exchange rates would result in a
charge or credit to profit and equity of £309,000 (2018: £368,000).
A 1% movement in interest rates would result in a charge or credit to profit and equity of
£5,000 (2018: £7,000).
Liquidity risk
The Group seeks to ensure sufficient liquidity is available to meet its foreseeable needs.
The Board regularly reviews cash flow projections and the headroom position to ensure the
Group is adequately funded.
Capital management
Managed capital is cash to meet working capital needs.
The Group’s capital management objectives are:
▪
▪
To ensure the Group’s ability to continue as a going concern; and
To provide an adequate return to shareholders.
These objectives are maintained by pricing products and services commensurately with the
level of risk.
The Group’s goal in capital management is to maintain adequate cash balances with the
minimum necessary borrowing. There are no externally imposed capital requirements
during the year covered by the financial statements.
Page 48
20192018£'000£'000Functional currency of operation: SterlingUS Dollar (net liabilities)(1,490) (1,889) Euro (net liabilities)(2,003) (2,106) Canadian Dollar net assets/(net liabilities)88 (54) Total(3,405) (4,049)
Notes to the financial statements
For the year ended 31 December 2019
Summary of the Group’s financial assets and liabilities
The Directors consider that the fair value of financial assets and liabilities approximates to
the carrying value for both 2019 and 2018.
16
Share capital and share premium
The total authorised number of ordinary shares is 475 million (2018: 475 million) with a
par value of 2p per share (2018: 2p per share).
Page 49
20192018£'000£'000Current assets - financial assets at amortised costTrade and other receivables1,677 1,439 Cash and cash equivalents264 354 1,941 1,793 Current liabilities - held at amortised costTrade and other payables(2,277) (2,038) Preference shares(6,221) (706) Loans(2,090) (2,090) Lease liabilities(275) (10,863) (4,834) Non-current liabilities - held at amortised costTrade and other payables(1,776) (2,257) Preference shares- (5,624) Lease liabilities(301) - (2,077) (7,881) Net financial assets and liabilities(10,999) (10,922) Number ofissued and fully paidShareSharesharescapitalpremiumTotal'000£'000£'000£'000At 1 January 2019349,240 6,985 14,924 21,909 Issue of shares30,505 610 873 1,483 As at 31 December 2019379,745 7,595 15,797 23,392
Notes to the financial statements
For the year ended 31 December 2019
Non-voting preference shares – included in financial liabilities
All preference shares are non-voting, non-convertible cumulative redeemable preference
shares. They are currently redeemable at par value on 31 December 2020, or, at the
Company’s discretion, at any earlier date and will accrue interest at a fixed rate of 10 per
cent. per annum. InTechnology plc has confirmed its willingness, should the Group
request, to extend the redemption date on these preference shares until 31 December
2021. Unpaid dividends accrue interest at 3% above Bank of England base rate until
settled.
17
Share-based payments
The Group has a share option scheme for certain employees and Directors. Options are
exercisable at a price equal to the average market price of the Company’s shares on the
date of grant. The options are settled in equity.
The number of shares subject to options, the periods in which they were granted and the
dates on which they may be exercised are as follows:
Options were valued using the Black-Scholes option-pricing model.
Page 50
Number ofNominalsharesValue'000£'000As at 31 December 2018 and 201971,277 5,702 ExerciseEarliestVestingExpiry date20192018price penceexerciseconditionName of scheme'000'000dateIsrael scheme- 1,082 2.002/02/09- 31/12/19Israel scheme- 800 5.002/02/09100,000 subscribers31/12/19UK scheme100 100 5.007/07/13100,000 subscribers07/07/20Israel scheme- 400 7.503/01/15- 31/12/19UK scheme3,300 3,300 7.503/01/15- 03/01/22UK scheme200 200 6.018/06/18- 18/06/25Israel scheme1,350 1,500 6.007/09/18- 31/12/23Israel scheme2,500 2,500 2.016/05/19- 31/12/26Israel scheme3,500 3,500 4.004/11/19- 31/12/26Israel scheme5,650 5,900 6.515/06/20Group reports positive15/06/27annual EBITDAUK scheme3,200 3,200 6.515/06/20Group reports positive15/06/27annual EBITDAIsrael scheme2,650 - 5.009/01/22- 09/01/29UK scheme450 - 5.009/01/22- 09/01/29Israel scheme1,000 - 5.028/02/22- 28/02/29Total23,900 22,482 Number of shares
Notes to the financial statements
For the year ended 31 December 2019
The expected volatility is based on historical volatility over the last year. The expected life
is assumed as being equal to the earliest exercise date. The risk-free rate of return is
taken as the Bank of England base-rate at the date of grant.
A reconciliation of option movements over the year to 31 December 2019 is shown below:
The closing mid-market share price on 31 March 2020 was 2.6 pence.
The weighted average remaining contractual life of the share options outstanding at 31
December 2019 was 6.6 years at exercise prices ranging from 2.0 pence to 7.5 pence.
Those options exercisable at 31 December 2019 are at exercise prices ranging from 2.0
pence to 7.5 pence.
The total charge for the year relating to employee share-based payment plans was
£52,000 (2018: £54,000), all of which related to equity-settled share-based payment
transactions.
18
Cash used in operations
Page 51
WeightedWeightedaverageaverageexerciseexerciseNumberpriceNumberprice'000pence'000penceOutstanding at 1 January22,482 5.523,569 5.4Granted4,350 - - 0.0Forfeited(650) 5.8(800) 4.2Exercised- - (87) 2 Expired(2,282) 4.0(200) - Outstanding at 31 December23,900 5.522,482 5.5Exercisable at 31 December10,950 4.95,682 6.52019201820192018£'000£'000Loss before taxation(1,028) (1,902) Adjustments for:Depreciation and amortisation417 208 Share-based payment charge52 54 Interest expense704 619 Changes in working capital:Increase in inventories37 (149) Increase in trade and other receivables(379) (200) Decrease in trade and other payables(508) (479) Net cash used in operations(705) (1,849)
Notes to the financial statements
For the year ended 31 December 2019
Changes in liabilities arising from financing activities
For the year ended 31 December 2019
19
Employee information
The average monthly number of persons (including Executive Directors) employed by the
Group during the year was:
Included in the table above are 20 persons that are contractors (2018: 23). These are
included as employees on the basis of their providing services to the company on a
material time basis over the year.
Page 52
CashFinanceconversionExchange2017flowschargeto equitydifferences2018£'000£'000£'000£'000£'000£'000Preference shares8,255 - 614 (2,539) - 6,330 Loans from related party undertakings2,290 (200) - - - 2,090 Total liabilities from financing activities10,545 (200) 614 (2,539) - 8,420 Cash and cash equivalents(732) 369 - - 9 (354) Net debt9,813 169 614 (2,539) 9 8,066 CashFinanceconversionExchange2018flowschargeto equitydifferences2019£'000£'000£'000£'000£'000£'000Preference shares6,330 - 666 (775) - 6,221 Loans from related party undertakings2,090 - - - - 2,090 Finance leases- - 575 - - 575 Total liabilities from financing activities8,420 - 1,241 (775) - 8,886 Cash and cash equivalents(354) 97 - - (7) (264) Net debt8,066 97 1,241 (775) (7) 8,622 Non-cash changesNon-cash changes20192018NumberNumberSales5 4 Product development & operations36 35 Finance & administration6 6 Total47 45
Notes to the financial statements
For the year ended 31 December 2019
Staff costs for the persons above were:
Directors’ costs included within the above were:
20
Capital commitments
The Group had no capital commitments at 31 December 2019 (2018: £nil).
21
Operating leases
Details of operating lease arrangements for the Group are as follows:
The opening operating lease commitment was £771,000, deducting the effect of
discounting of £40k gives the opening lease liability at 1 January 2019 of £732,000.
22
Related party transactions
For the purposes of IAS 24, key management of the Group are the same as those of the
Board of Directors. There were no share options issued to key management personnel
during the year. Key management personnel remuneration includes the following
expenses:
Directors’ remuneration and the remuneration of each Director is presented in the
Directors’ Report on page 9.
Peter Wilkinson is a shareholder and Director of InTechnology plc. Mobile Tornado Group
plc has bought goods and services totalling £62,000 from InTechnology plc in the year to
31 December 2019 (year ended 31 December 2018; £157,000). As at 31 December 2019,
Page 53
20192018£'000£'000Wages and salaries2,168 2,055 Social security costs117 91 Other pension costs101 76 Share-based payment charge52 54 Other benefits140 104 Total2,578 2,380 Benefits20192018in kindTotalTotal£'000£'000£'000£'000£'000Peter Wilkinson- 28 - 28 66 Jeremy Fenn6 120 2 128 127 Avi Tooba113 - 43 156 147 Jonathan Freeland- 18 - 18 17 Aggregate emoluments119 166 45 330 357 SalaryFees20192018£'000£'000Lease payments under operating leases charged to operating costs in the year- 279
Notes to the financial statements
For the year ended 31 December 2019
Mobile Tornado Group plc owed InTechnology plc £719,000 (31 December 2018;
£850,000).
In previous years, Intechnology plc bought right of use licenses totalling €2,400,000 from
Mobile Tornado Group plc. During the year to 31 December 2019 the value of licenses
brought into use was €nil (year ended 31 December 2018; €nil). The balance of unused
licenses as at 31 December 2019 was €2,376,000 (31 December 2018; €2,376,000).
InTechnology plc has provided loan finance of £nil to Mobile Tornado Group plc in the year
ended 31 December 2019 (year ended 31 December 2018; £nil). As at 31 December 2019,
Mobile Tornado Group plc owed InTechnology plc £2,090,000 (31 December 2018;
£2,090,000).
InTechnology plc has provided preference share finance of £nil to Mobile Tornado Group
plc in the year ended 31 December 2019 (year ended 31 December 2018; £nil). During
the year, the Company issued 15,504,687 new ordinary shares to Intechnology plc at 5p
per share as capitalisation of £0.78m preference share indebtedness owed by the
Company to Intechnology plc. As at 31 December 2019, Mobile Tornado Group plc had
total preference share indebtedness to InTechnology plc of £6,221,000 (31 December
2018; £6,330,000).
On 26 September 2018, the Company entered into a revolving loan facility agreement with
InTechnology Plc. Pursuant to the facility agreement, which is for a period of two years
from date entered into, InTechnology has made available to the Company a revolving loan
facility of up to a maximum principal amount of £300,000. Any new amounts drawn down
by the Company pursuant to the facility agreement will be subject to a 2% facility fee and
will bear interest at a rate of 10% per annum. The facility agreement allows for monies to
be drawn down, repaid and redrawn again in any manner and any number of times by the
Company until the agreement expires, however, any monies repaid and subsequently
redrawn will not incur a further facility fee. At the expiration date of the facility agreement,
all monies shall be repayable by the Company to InTechnology together with any facility
fee and accrued interest thereon. During the year £300,000 was drawn down and
subsequently repaid. Interest and facilities fees for the year, all of which were paid during
the year, amounted to £12,000 (year ended 31 December 2018; £nil) As at 31 December
2019, Mobile Tornado Group plc owed InTechnology plc £nil in respect of this agreement
(31 December 2018: £nil).
Payments to a third party, Mainstream Capital Partners LLP, are made in respect of the
services provided by Jeremy Fenn, Executive Chairman. As at 31 December 2019, Mobile
Tornado Group Plc owed £12,000 (31 December 2018: £nil) to Jeremy Fenn.
The Group is controlled by InTechnology plc (incorporated in the UK), which owns 50.8%
of the Company’s ordinary shares. The Group’s ultimate parent and controlling party is
Peter Wilkinson.
23
Investments
Details of the principal investments at 31 December 2019 in which the Company holds
more than 20% of the nominal value of ordinary share capital are as follows:
Country of
incorporation or
registration
Nature of
business
Group
proportion
held
Company
proportion
held
M.T. Labs
Limited
Israel
Sale of instant
communication
services
100%
100%
Page 54
Notes to the financial statements
For the year ended 31 December 2019
With registered address: 13 Amal street, Afek Industrial Park, Rosh Ha’ayin 4809249,
Israel
24
Post balance-sheet event
Since the balance sheet date, a global pandemic (COVID-19) has occurred. This is an
unprecedented event and its full economic impact on the global economy remains
uncertain. A significant number of governments have enforced home-working measures
and instructed certain sectors to close temporarily. All of our staff are currently
homeworking and we are in the relatively fortunate position where this can continue to be
done efficiently and without any material disruption to service and operations.
We recognise the additional uncertainty this pandemic brings to our financial forecasts and
projections. We are confident that our long-established recurring revenue customer base,
together with our supportive principal creditors, provide us with a firm foundation on which
to mitigate its wider economic impact. The Board has modelled various scenarios for the
impact COVID-19 may have and measures it will take to counter its impact.
Page 55
Company balance sheet
As at 31 December 2019
The Company’s loss for the financial year was £1,274,000 (2018: £2,077,000 loss).
The financial statements on pages 56 to 66 were approved by the Board of Directors on 8
April 2020 and were signed on its behalf by:
Jeremy Fenn
Chairman
8 April 2020
Company Number: 5136300
The accompanying notes form an integral part of these financial statements.
Page 56
20192018Note£'000£'000Fixed assetsIntangible assets45,6616,275Tangible assets512475,6736,322Current assetsDebtors72,5012,288Stock- 22Cash at bank and in hand1302142,6312,524Creditors - amounts falling due within one year8(12,340)(6,960)Net current liabilities(9,709)(4,436)Total assets less current liabilities(4,036)1,886Creditors - amounts falling due after more than one year8(1,776)(7,959)Net liabilities(5,812)(6,073)Capital and reservesCalled up share capital97,5956,985Share premium account15,79714,924Merger reserve10,93810,938Share option reserve277225Accumulated losses(40,419)(39,145)Total shareholders' deficit(5,812)(6,073)
Company statement of changes in equity
For the year ended 31 December 2019
Page 57
Called up shareShare premiumMergerShare optionAccumulatedShareholders'capitalaccountreservereservelossesdeficit£'000£'000£'000£'000£'000£'000Balance at 1 January 20185,427 12,672 10,938 171 (37,068) (7,860) Equity settled share-based payments- - - 54 - 54 Issue of share capital1,558 2,252 - - - 3,810 Loss for the financial year- - - - (2,077)(2,077) Balance at 31 December 20186,985 14,924 10,938 225 (39,145) (6,073) Called up shareShare premiumMergerShare optionAccumulatedShareholders'capitalaccountreservereservelossesdeficit£'000£'000£'000£'000£'000£'000Balance at 1 January 20196,985 14,924 10,938 225 (39,145) (6,073) Equity settled share-based payments- - - 52 - 52 Issue of share capital610 873 - - - 1,483 Loss for the financial year- - - - (1,274)(1,274) Balance at 31 December 20197,595 15,797 10,938 277 (40,419) (5,812)
Notes to the Company financial statements
For the year ended 31 December 2019
1.
General information
The principal activity of the Company is the provision of instant communication mobile
applications which serve the market of mobile data services in the mobile communication
industry. The Company is a public limited company which is listed on the Alternative
Investment Market and incorporated and domiciled in England within the UK. The address
of the registered office is Cardale House, Cardale Court, Beckwith Head Road, Harrogate,
HG3 1RY.
2.
Statement of compliance
The individual financial statements of Mobile Tornado Group plc have been prepared in
compliance with United Kingdom Accounting Standards, including Financial Reporting
Standard 102 “The Financial Reporting Standard applicable in the United Kingdom and the
Republic of Ireland” (“FRS 102”) and the Companies Act 2006.
3.
Summary of significant accounting policies
The principal accounting policies applied in the preparation of these financial statements
are set out below. These policies have been consistently applied to all the years presented,
unless otherwise stated.
3.1
Basis of preparation
The financial statements are presented in sterling, rounded to the nearest thousand. They
are prepared on a going concern basis and under the historical cost convention. The
preparation of financial statements in conformity with FRS 102 requires the use of certain
critical accounting estimates. It also requires management to exercise its judgement in the
process of applying the company’s accounting policies. The areas involving a higher degree
of judgement or complexity, or areas where assumptions and estimates are significant to
the financial statements are disclosed in Note 3.3.
The Company has taken advantage of the following exemptions in its individual financial
statements:
•
From preparing a statement of cashflows;
• Disclosure of related party transactions with and between wholly-owned
subsidiaries;
• Disclosures relating to financial instruments.
3.2
Going concern
The Financial Statements are prepared on a going concern basis.
When determining the adoption of this approach the Directors have considered a wide
range of information relating to present and future conditions, including the current state
of the Balance Sheet, future projections, cash flow forecasts, access to funding, ability to
successfully secure additional investment, available mitigating actions and the medium-
term strategy of the business.
In common with many businesses at this stage of development, the Company is dependent
on its ability to meet its cash flow forecasts. Within those cash flow forecasts, the Group
Page 58
Notes to the Company financial statements
For the year ended 31 December 2019
has included a number of significant payments and receipts based on its best estimate but,
as with all forecasts, there does exist some uncertainty as to the timing and size of those
payments and receipts. In particular, the forecasts assume the ongoing deferral and
phased payment of some of the Group’s creditors, and the continuation at the current level
of both the recurring revenue and an increase in the level of non-recurring revenues. In
the event that some or all of these receipts are delayed, deferred or reduced, or payments
not deferred, management has considered the actions that it would need to take to
conserve cash. These actions would include significant cost savings (principally payroll
based) and/or seeking additional funding from its shareholders (for which there is
currently no shareholder commitment requested). These conditions, along with the other
matters explained in note 1 to the financial statements, indicate the existence of a material
uncertainty which may cast significant doubt about the Group’s ability to continue as a
going concern. The financial statements do not include the adjustments that would result if
the Group was unable to continue as a going concern.
Since the balance sheet date, a global pandemic (COVID-19) has occurred. This is an
unprecedented event and its full economic impact on the global economy remains
uncertain. A significant number of governments have enforced home-working measures
and instructed certain sectors to close temporarily. All of our staff are currently
homeworking and we are in the relatively fortunate position where this can continue to be
done efficiently and without any material disruption to service and operations.
We recognise the additional uncertainty this pandemic brings to our financial forecasts and
projections. We are confident that our long-established recurring revenue customer base,
together with our supportive principal creditors, provide us with a firm foundation on which
to mitigate its wider economic impact. The Board has modelled various scenarios for the
impact COVID-19 may have and measures it will take to counter its impact.
The Directors, while noting the existence of a material uncertainty and having considered
the possible management actions as noted above, are of the view that the Group is a
going concern and will be able to meet its debts as and when they fall due for a period of
at least 12 months from the date of signing these accounts.
3.3
Critical accounting estimates and judgements
The company makes estimates and assumptions concerning the future. The resulting
accounting estimates will, by definition, seldom equal the related actual results. The
estimates and assumptions that have a significant risk of causing a material adjustment to
the carrying amounts of assets and liabilities within the next financial year are addressed
below:
Contingent consideration – payments are dependent on estimates of future license sales
revenues.
Trade and other receivables – recognition of any impairment provisions in respect of
amounts recorded as trade and other receivables is dependent on judgements made on
the recoverability of such items.
Research and development - distinguishing the research and development phases of the
Group's research and development expenditure and determining whether the recognition
requirements for the capitalisation of development costs are met requires judgement.
Valuation of goodwill – the carrying value of goodwill is reviewed for impairment at least
annually. In determining whether goodwill is impaired an estimation of the fair value
and/or the value in use of the cash generating unit (CGU) to which the goodwill has been
Page 59
Notes to the Company financial statements
For the year ended 31 December 2019
allocated is required. This calculation of value in use requires estimates to be made
relating to the timing and amount of future cash flows expected from the CGU, and
suitable discount rates based on the Company’s weighted average cost of capital adjusted
to reflect the specific economic environment of the relevant CGU. The calculation of fair
value requires estimates of the market value of the Company by reference to existing
market data for the Company or for similar entities.
3.4
Share options
The Company grants share options to employees and Directors on a discretionary basis.
The fair value of options granted is recognised as an employee expense with a
corresponding increase in equity. The fair value is measured at grant date and spread over
the period during which the employees become unconditionally entitled to the options. The
fair value of the options granted is measured using the Black-Scholes pricing model, which
takes into account the terms and conditions upon which the options were granted. The
amount recognised as an expense is adjusted to reflect the actual number of share options
that vest.
3.5
Foreign currencies
Transactions in foreign currencies are recorded at the rate of exchange ruling at the date
of the transaction. Monetary assets and liabilities denominated in foreign currencies are
translated to sterling at the exchange rates ruling at the balance sheet date.
All exchange differences are taken to the profit and loss account.
3.6
Tangible fixed assets
The cost of tangible fixed assets is their purchase cost. Depreciation is calculated so as to
write-off the cost of an asset, less its estimated residual value, over the useful economic
life of that asset as follows:
Computer & other equipment
3 years
The Directors review tangible fixed assets for impairment if events or changes in
circumstances indicate that the carrying value of may not be recoverable.
3.7
Goodwill
The Directors continue to assess that the goodwill has a finite life of 20 years and therefore
will continue to amortise the goodwill over the remaining 10 years of this period.
After initial recognition, goodwill is measured at cost less amortisation and accumulated
impairment losses. At each year end date goodwill is reviewed for impairment using a
discounted cash flow method applied to business forecasts. If this review demonstrates
that impairment has occurred, this is expensed to the Company’s income statement.
Goodwill is allocated to cash generating units for the purpose of impairment testing.
Page 60
Notes to the Company financial statements
For the year ended 31 December 2019
3.8
Intangible assets
Research expenditure, undertaken with the prospect of gaining new scientific or technical
knowledge and understanding, is charged to income in the year in which it is incurred.
Internal development expenditure, whereby research findings are applied to a plan for the
production of new or substantially improved products or processes, is charged to income in
the year in which it is incurred unless it meets the recognition criteria of FRS102 Section
18 ‘Intangible Assets which, other than for goodwill’, are;
▪ The technical feasibility of completing the intangible asset so that it will be available for
use or sale.
▪ Its intention to complete the intangible asset and use or sell it.
▪ Its ability to use or sell the intangible asset
▪ How the intangible asset will generate probable future economic benefits. Among other
things, the entity can demonstrate the existence of a market for the output of the
intangible asset or the intangible asset itself or, if it is to be used internally, the usefulness
of the intangible asset.
▪ The availability of adequate technical, financial and other resources to complete the
development and to use or sell the intangible asset.
▪ Its ability to measure reliably the expenditure attributable to the intangible asset during
its development.
Measurement uncertainties over economic benefits generally mean that such criteria are
not met. Where, however, the recognition criteria are met, intangible assets are
capitalised and amortised over their useful economic lives from product launch. Intangible
assets relating to products in development are subject to impairment testing at each
balance sheet date or earlier upon indication of impairment. Any impairment losses are
written off immediately to income.
3.9
Investments
Investments are stated at cost less provision for any permanent impairment in value. The
carrying value of investments is reviewed annually to determine the need for any provision
for impairment. The investment has been fully impaired in previous periods.
3.10 Financial liabilities
Financial liabilities and equity instruments are classified according to the substance of the
contractual arrangements entered into. An equity instrument is any contract that
evidences a residual interest in the assets of the entity after deducting all of its financial
liabilities.
Where the contractual obligation of the financial instruments (including share capital) are
equivalent to a similar debt instrument, those financial instruments are classed as financial
liabilities. Financial liabilities are presented as such in the balance sheet. Finance costs
and gains and losses relating to financial liabilities are included in the profit and loss
account. Finance costs are calculated so as to produce a constant rate of return on the
outstanding liability.
Where the contractual terms of share capital do not have any terms meeting the definition
of a financial liability then this is classed as an equity instrument. Dividend and
distributions relating to equity instruments are debited direct to equity.
Page 61
Notes to the Company financial statements
For the year ended 31 December 2019
4 Intangible assets
A 10% reduction in the revenue growth assumption will not result in an impairment of
goodwill.
5 Tangible assets
Page 62
GoodwillSoftwareTotal£'000£'000£'000CostAt 1 January 201912,75818712,945Additions- - - At 31 December 201912,75818712,945Accumulated amortisationAt 1 January 20196,571996,670Charge for the year57638614At 31 December 20197,1471377,284Net book amount at 31 December 20195,611505,661Net book amount at 31 December 20186,187886,275ComputerequipmentVehiclesTotal£'000£'000£'000CostAt 1 January 201943624460Additions22- 22Disposals(43)- (43)At 31 December 201941524439Accumulated depreciationAt 1 January 201938924413Charge for the year45- 45Disposals(31)- (31)At 31 December 201940324427Net book amount at 31 December 201912- 12Net book amount at 31 December 201847- 47
Notes to the Company financial statements
For the year ended 31 December 2019
6 Fixed asset investments
Details of the investments at 31 December 2019 in which the Company holds more than
20% of the nominal value of ordinary share capital are as follows:
Country of
incorporation
or registration
Nature of
business
Group
proportion
held
Company
proportion
held
M.T. Labs Limited
Israel
Sale of instant
communication
services
100%
100%
With registered address:13 Amal street, Afek Industrial Park, Rosh Ha’ayin 4809249, Israel
On 31 October 2009 the trade and net assets of Mobile Tornado International Limited were
transferred to Mobile Tornado Group plc at book value, following which the net investment
held by Mobile Tornado Group plc in Mobile Tornado International Limited was
£12,758,000. Consequently, the value of the investment held in Mobile Tornado
International Limited is not supported by any net assets or future cash flows. As the
transfer did not impair the future profitability of the Company, £12,758,000 was
transferred from investments to goodwill in the Company balance sheet.
Mobile Tornado International Limited was subsequently dissolved.
7 Debtors
Trade receivables includes £nil (2018: £nil) falling due after more than one year. Trade
receivables are stated after provisions for impairment of £174,000 (2018: £72,000).
Amounts due from group undertakings are unsecured, interest free and repayable on
demand.
Page 63
£'000£'000Trade receivables1,257 1,003 Prepayments and accrued income177 157 Other debtors272 384 Amounts owed by Group undertakings795 744 2,501 2,288
Notes to the Company financial statements
For the year ended 31 December 2019
8 Creditors
The contingent consideration arose on the purchase of intellectual property from Tersync
Limited in 2001 and represents a royalty payable on future sales of Push to Talk related
products by Mobile Tornado, payable in part as consideration for the acquisition of the
rights to the technology underlying such product. The royalty is payable quarterly on any
relevant sales (on a cash receipts basis) as follows:
(i)
50% of the first US$200,000 relevant sales.
(ii)
15% of any additional relevant sales, subject to any related cumulative royalty
payments being capped at a maximum of US$5.3 million. Direct reseller and other third
party costs may be deducted in arriving at these royalty payments, subject to such costs
not exceeding 10% of the relevant sales.
The deferred income balance includes an amount of £2,012,000 (2018: £2,135,000)
received from InTechnology plc in respect of 12 month licenses that had not been brought
into use at the balance sheet date. The Group will recognise related income from the date
of activation of each licence, or the expiration of its obligations if sooner.
9 Called up share capital
There is a single class of ordinary shares. There are no restrictions on the distributions.
Page 64
20192018£'000£'000Trade creditors806 740 Accruals96 268 Other taxation and social security13 21 10% cumulative preference shares6,220 6,408 Other creditors- 4 Deferred income2,104 2,426 Loans owed to related party undertakings2,090 2,090 Contingent consideration2,787 2,962 14,116 14,919 Less non-current portion:Deferred consideration(1,776) (2,257) 10% cumulative preference shares- (5,702) Amounts due within 1 year12,340 6,960 20192018£'000£'000Allotted, called up and fully paid379,744,923 (2018: 349,240,236) Ordinary shares of 2p each7,5956,985Total7,5956,985
Notes to the Company financial statements
For the year ended 31 December 2019
Non-voting preference shares – classified as liability
All preference shares are non-voting, non-convertible cumulative redeemable preference
shares. They are redeemable at par value on 31 December 2020, or, at the Company’s
discretion, at any earlier date and will accrue interest at a fixed rate of 10 per cent. per
annum. Unpaid dividends accrue interest at 3% above Bank of England base rate until
settled.
InTechnology plc has confirmed its willingness, should the Group request, to extend the
redemption date on these preference shares until 31 December 2021.
10 Capital and other commitments
At the balance sheet date, the Company had outstanding commitments for future
minimum lease payments under non-cancellable operating leases as follows:
Operating lease payments represent rentals payable by the Company for certain
properties.
11 Related party transactions
The Company has taken advantage of the exemption available under FRS 102 ‘Related
Party Disclosures’ from disclosing transactions between the Company and its wholly owned
subsidiary undertaking as these have been eliminated on consolidation of these financial
statements.
Peter Wilkinson is a shareholder and Director of InTechnology plc. Mobile Tornado Group
plc has bought goods and services totalling £62,000 from InTechnology plc in the year to
31 December 2019 (year ended 31 December 2018; £157,000). As at 31 December 2019,
Mobile Tornado Group plc owed InTechnology plc £719,000 (31 December 2018;
£850,000).
In previous years, Intechnology plc bought right of use licenses totalling €2,400,000 from
Mobile Tornado Group plc. During the year to 31 December 2019 the value of licenses
brought into use was €nil (year ended 31 December 2018; €nil). The balance of unused
licenses as at 31 December 2019 was €2,376,000 (31 December 2018; €2,376,000).
InTechnology plc has provided loan finance of £nil to Mobile Tornado Group plc in the year
ended 31 December 2019 (year ended 31 December 2018; £nil). As at 31 December 2019,
Mobile Tornado Group plc owed InTechnology plc £2,090,000 (31 December 2018;
£2,090,000).
InTechnology plc has provided preference share finance of £nil to Mobile Tornado Group
plc in the year ended 31 December 2019 (year ended 31 December 2018; £nil). During
Page 65
Number ofNominalsharesValue'000£'000As at 31 December 2018 and 201971,277 5,702 20192018£'000£'000One to five years05Total05
Notes to the Company financial statements
For the year ended 31 December 2019
the year, the Company issued 15,504,687 new ordinary shares to Intechnology plc at 5p
per share as capitalisation of £0.78m preference share indebtedness owed by the
Company to Intechnology plc. As at 31 December 2019, Mobile Tornado Group plc had
total preference share indebtedness to InTechnology plc of £6,221,000 (31 December
2018; £6,330,000).
On 26 September 2018, the Company entered into a revolving loan facility agreement with
InTechnology Plc. Pursuant to the facility agreement, which is for a period of two years
from date entered into, InTechnology has made available to the Company a revolving loan
facility of up to a maximum principal amount of £300,000. Any new amounts drawn down
by the Company pursuant to the facility agreement will be subject to a 2% facility fee and
will bear interest at a rate of 10% per annum. The facility agreement allows for monies to
be drawn down, repaid and redrawn again in any manner and any number of times by the
Company until the agreement expires, however, any monies repaid and subsequently
redrawn will not incur a further facility fee. At the expiration date of the facility agreement,
all monies shall be repayable by the Company to InTechnology together with any facility
fee and accrued interest thereon. During the year £300,000 was drawn down and
subsequently repaid. Interest and facilities fees for the year, all of which were paid during
the year, amounted to £12,000 (year ended 31 December 2018; £nil) As at 31 December
2019, Mobile Tornado Group plc owed InTechnology plc £nil in respect of this agreement
(31 December 2018: £nil).
Payments to a third party, Mainstream Capital Partners LLP, are made in respect of the
services provided by Jeremy Fenn, Executive Chairman. As at 31 December 2019, Mobile
Tornado Group Plc owed £12,000 (31 December 2018: £nil) to Jeremy Fenn.
The Group is controlled by InTechnology plc (incorporated in the UK), which owns 50.8%
of the Company’s ordinary shares. The Group’s ultimate parent and controlling party is
Peter Wilkinson.
12 Loss for the financial year
The Company has taken advantage of Section 408 of the Companies Act 2006 and has not
included its own profit and loss account in these financial statements. The Parent
Company’s loss for the year ended 31 December 2019 was £1,274,000 (year ended 31
December 2018: £2,077,000 loss).
Page 66
Corporate information
Company Registration Number:
5136300
Registered Office:
Directors:
Nominated Advisor and Broker:
Bankers:
Solicitors:
Registrars:
Auditors:
Internet address:
HTUwww.mobiletornado.com UTH
Cardale House
Cardale Court
Beckwith Head Road
Harrogate
North Yorkshire
HG3 1RY
Peter Wilkinson
Jeremy Fenn
Avi Tooba
Jonathan Freeland
(Non-Executive Director)
(Executive Chairman)
(Chief Executive Officer)
(Non-Executive Director)
Allenby Capital Ltd
5 St Helen’s Place
London
EC3A 6AB
Barclays Bank Plc
Hanover Square
50 Pall Mall
London
SW1Y 5AX
Schofield Sweeney LLP
76 Wellington Street
Leeds
LS1 2AY
Link Asset Services
The Registry
34 Beckenham Road
Beckenham
Kent
BR3 4TU
Saffery Champness LLP
Mitre House
North Park Road
Harrogate
HG1 5RX
Page 67
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