WANdisco Annual Report 2019

FY2019 Annual Report · WANdisco

Loading PDF…

WANDISCO PLC
ANNUAL REPORT
AND ACCOUNTS 2019

Wide
Area
Network
distributed
computing

WANdisco is the LiveData company for machine learning and AI.

WANdisco solutions enable enterprises to create an environment where data is always
available, accurate and protected, creating a strong backbone for their IT infrastructure
and a bedrock for running consistent, accurate machine learning applications. With zero
downtime and zero data loss, WANdisco Fusion keeps geographically dispersed data at any
scale consistent between on-premises and cloud environments allowing businesses to
operate seamlessly in a hybrid or multi-cloud environment.

WANdisco has over a hundred customers and significant go-to-market partnerships with
Microsoft Azure, Amazon Web Services, Google Cloud, Oracle, and others as well as OEM
relationships with IBM and Alibaba.

Read more about our
markets from page 8

WANDISCO PLC

ANNUAL REPORT AND ACCOUNTS 2019

Embed and enable

WANdisco technology into
cloud fabric to become de-facto
standard for data migration.

STRONG
INTELLECTUAL
PROPERTY

GLOBAL
CUSTOMER
BASE

Provide insight

We create solutions and
partnerships that facilitates the
use of data for cloud analytics.

THE VALUE WE CREATE

For customers

The ability to put all their data to work
for their business all the time, at any scale.

$8.3m

investment in new technology

For employees

The growth of the business has provided
many opportunities for existing and new
colleagues and we continue to invest in
developing and retaining our people
and strengthening the team.

162

employees

For partners

We have an expanding network of partners and
system integrators, all of which are dedicated
to meeting the needs of our customers.

partners and system integrators

Reinvestment

We invest in our business;
during 2019 areas of investment
included channel strategy and
product development.

Read more about our
value creation from page 1

Read more about our
strategy from page 16

WANDISCO PLC ANNUAL REPORT AND ACCOUNTS 2019

Strategic reportOUR PARTNERSHIPS AND TECHNOLOGY

Deepening
partnerships

Together with our partners, we are growing, innovating
and investing in ways to help customers transform their
businesses with WANdisco solutions.

About the partnership

WANdisco’s partnership with Microsoft
helps customers migrate data to the
Microsoft Azure cloud rapidly and easily,
and exploit the power and capabilities
of the Microsoft Azure environment.

2019 update

• Microsoft Gold Partner

• Launched integrated solution

with Azure Databricks

• Joint development for embedded

Azure Data Lake Migration
("ADLM") solution

• Achieved co-sell status for WANdisco
LiveAnalytics for Azure Databricks
and WANdisco Fusion

WANdisco helps customers easily
migrate data to Amazon Simple Storage
Service (S3) in order to quickly leverage
the benefits and capabilities of AWS.

The combination of WANdisco
LiveAnalytics and Databricks Delta
Lake accelerates cloud adoption
and modernises big data analytics.

2019 update

• Exceeded 2019 AWS APN
Program requirements

• Launched integrated solution

with AWS Databricks

• Sales momentum and strengthening

• Developed LiveAnalytics for both

Azure and AWS, an integrated solution
with Databricks

• Launched LiveDeltaLake for Databricks
across multiple cloud environments

field alignment in NA and EMEA

• Launched Co-Marketing Program

• Participant in Big Data

Competency Development

• Initiated joint field enablement based

on co-developed sales assets

• Began regional leadership connections

and account pursuit

WANDISCO PLC

ANNUAL REPORT AND ACCOUNTS 2019

SYSTEM INTEGRATORS AND DISTRIBUTORS

WANdisco works with consulting and system integrator
partners which provide expertise, technology skills and
solutions that better enable customer success. Our partners
can quickly move to market with WANdisco due to their
existing Hadoop experience and understanding of the needs
of the Hadoop community. WANdisco partners synergistically
have existing relationships with clients and client providers to
which they provide cloud services such as big data migration,
backup, disaster recovery and high availability.

2019 update

• Engaged regional and global system integrators directly with several key customers

• Embedded WANdisco solution into their migration practice offering

• Developed a recruiting and onboarding methodology to scale the partner programme

Recruit

Ready

Engage

WANDISCO PLC ANNUAL REPORT AND ACCOUNTS 2019

Strategic reportOUR STRATEGY

Strong progress across
our strategic initiatives

DEEPENING
PARTNER
RELATIONSHIPS

Importance

2019 achievements

The channel partnerships we have
established are significant as:

• Improved partner status with Microsoft

by embedding Fusion in Azure;

Priorities for 2020

• Focus on new partner channel

and their development;

Link to KPIs

• Revenue.

• Cash overheads.

• they provide WANdisco with access to

vast sales teams, adding significant global
and horizontal market reach;

• Achieved Advanced Technology Partner

• Expand channel account manager

status with AWS; and

model; and

• Appointed Micro-D Master Distributor

• Expand partner channel further.

• they allow us to drive more revenue

for Africa.

at lower cost; and

• their endorsement of WANdisco Fusion
strengthens our brand and our portfolio
of partners.

We continue to seek opportunities
to expand our sales channels.

CONTINUED
CUSTOMER
TRACTION

Importance

2019 achievements

WANdisco’s technology solves critical data
management challenges across cloud
computing and Big Data for enterprise
customers and their service providers.

• Launched LiveData for Multicloud at the
end of 2018, which was followed by the
launch of LiveMigrator and LiveAnalytics
during 2019.

Priorities for 2020

Link to KPIs

• Capitalise on multi-cloud opportunity; and

• Revenue.

• New products launched to expand

addressable market.

Our product is a platform for any
IT architecture.

We identify development projects that will
enhance our technology and increase its
ease of use and functionality for customers
and end users, and we listen to existing
customers and potential customers and our
channel partners for future requirements.

PEOPLE
DEVELOPMENT

Importance

2019 achievements

We want to provide an environment where
we attract, retain, develop and enable all
our people to demonstrate, grow and apply
their capabilities, offering opportunities for
everyone to reach their potential.

• Enhanced our management team

with several key senior hires in product
development, marketing, business
development and sales;

• Provided new opportunities internally
resulting in a number of internal job
moves and promotions; and

• Enhanced our benefits package

to employees globally.

WANDISCO PLC

ANNUAL REPORT AND ACCOUNTS 2019

Priorities for 2020

Link to KPIs

• Continue to develop our team with

• Revenue.

internal job moves and promotions; and

• Cash overheads.

• Enhance our team with quality new

external hires.

DEEPENING

PARTNER

RELATIONSHIPS

Importance

2019 achievements

The channel partnerships we have

• Improved partner status with Microsoft

established are significant as:

by embedding Fusion in Azure;

Priorities for 2020

• Focus on new partner channel

and their development;

Link to KPIs

• Revenue.

• Cash overheads.

and horizontal market reach;

• Appointed Micro-D Master Distributor

• Expand partner channel further.

• Achieved Advanced Technology Partner

• Expand channel account manager

model; and

• they provide WANdisco with access to

vast sales teams, adding significant global

status with AWS; and

• they allow us to drive more revenue

for Africa.

CONTINUED

CUSTOMER

TRACTION

Importance

2019 achievements

Priorities for 2020

Link to KPIs

WANdisco’s technology solves critical data

• Launched LiveData for Multicloud at the

• Capitalise on multi-cloud opportunity; and

• Revenue.

management challenges across cloud

end of 2018, which was followed by the

computing and Big Data for enterprise

launch of LiveMigrator and LiveAnalytics

customers and their service providers.

during 2019.

• New products launched to expand

addressable market.

at lower cost; and

• their endorsement of WANdisco Fusion

strengthens our brand and our portfolio

of partners.

We continue to seek opportunities

to expand our sales channels.

Our product is a platform for any

IT architecture.

We identify development projects that will

enhance our technology and increase its

ease of use and functionality for customers

and end users, and we listen to existing

customers and potential customers and our

channel partners for future requirements.

PEOPLE

DEVELOPMENT

Importance

2019 achievements

We want to provide an environment where

• Enhanced our management team

we attract, retain, develop and enable all

with several key senior hires in product

our people to demonstrate, grow and apply

development, marketing, business

their capabilities, offering opportunities for

development and sales;

everyone to reach their potential.

• Provided new opportunities internally

resulting in a number of internal job

moves and promotions; and

• Enhanced our benefits package

to employees globally.

Priorities for 2020

Link to KPIs

• Continue to develop our team with

• Revenue.

internal job moves and promotions; and

• Cash overheads.

• Enhance our team with quality new

external hires.

Read about how we
manage risk from page 20

Find our KPIs
on page 19

Summary of achievements

Sales channel development

Of all the significant developments WANdisco
has delivered in 2019, the further execution
of our indirect sales plan has been the most
strategically important.

In 2016, WANdisco was primarily a direct sales
organisation, with a market reach that was
limited by our finite sales force. During 2017,
we won or deepened strategic relationships
with market-leading IT and cloud providers,
including IBM, Dell EMC and go-to-market
partnerships with Amazon Web Services,
Microsoft Azure, Google Cloud and Oracle.

During 2018 these partnerships were further
enhanced. WANdisco entered a new OEM
agreement with Alibaba Cloud and also
achieved co-sell status through the Microsoft
One Commercial Partner Program.

In February 2019 WANdisco received
Advanced Technology Partner status with
Amazon Web Services in the AWS Partner
Network, which is the highest tier for
Technology Partners that provide
software and internet solutions in
the AWS Partner Network.

During 2019 the relationship with Microsoft
was further enhanced to embed Fusion into
Azure, allowing customers to use Fusion as
if it was a native Azure offering.

As an Azure embedded product, customers
can deploy WANdisco Fusion just by selecting
it from the same Azure menu they use for
native Microsoft products, and the charges
added on their monthly Azure bill. No
software to install, no new contracts to
sign. The product is now publicly available
as a paid service which we expect to facilitate
a greater volume and velocity of deals than
we have experienced in prior years.

WANDISCO PLC ANNUAL REPORT AND ACCOUNTS 2019

Strategic reportOUR STRATEGY CONTINUED

Solving data
management challenges

Summary of achievements continued

WANdisco Fusion

Sales channel development continued

Driving channel sales success:
supporting our partners

During 2019 we continued to invest in
developing our channel strategy, enhancing
the dedicated channel account managers
for key partner accounts introduced in 2018
and dedicated software engineering teams.
Their remit is to work with technology
partners on the closer integration of our
technologies and to accelerate speed to
market with our joint solutions. We will
continue to develop this model further
including extending to our new partners.

Supporting our customers and partners is a
more efficient use of our resources and will
ultimately drive faster and more profitable
revenue growth.

The indirect sales plan: a breakdown
by channel

WANdisco continues to target third party
technology companies and cloud platform
providers who want to embed, offer or
recommend our Fusion product as part of
or an extension to their platforms. We will
continue to seek opportunities to form
closer partnership relationships.

Product innovation

WANdisco’s technology solves critical data
management challenges across cloud
computing and Big Data for enterprise
customers and their service providers. The
ability to continuously replicate at vast scale
to the cloud and on-premises data centres
with guaranteed consistency, availability and
no business disruption, frees companies to
innovate in the way they exploit data for
new business insights and initiatives.

WANdisco Fusion is our next-generation
replication platform, an architecture that
supports a wider range of data environments
than our original Hadoop deployments.

WANdisco Fusion for Multicloud

In October 2018, we announced the launch
of WANdisco LiveData for Multicloud. This
enterprise replication software enables a
LiveData platform for a multi-cloud
environment, ensuring data accuracy and
consistency for business applications in any
combination of major cloud environments.
WANdisco LiveData for Multicloud was
borne from the cross-industry imperative
to have data accessibility and availability
in heterogeneous cloud data environments.

In addition, we have introduced greater
flexibility in the way our partners and their
customers can use our technology. Additional
plug-ins mean WANdisco Fusion can address a
wider range of use cases, including large-scale
data migration between data centres and the
use of cloud storage ”appliances”.

In January 2019 we announced a new joint
engineered solution with IBM to support
relational database technology for the first
time, significantly expanding our addressable
market. The IBM Db2 Big SQL solution
was jointly engineered between IBM and
WANdisco to extend the capability of IBM Big
Replicate (IBM’s product name for WANdisco
Fusion) to support scenarios where customers
are looking to take advantage of hybrid cloud.

In June 2019 we introduced LiveMigrator, a
solution enabling the migration of petabyte
scale live data to the cloud. LiveMigrator’s
automated process enables enterprises’
on-premises data to be seamlessly migrated
to the cloud and WANdisco’s core Fusion
technology keeps the migrated data
consistent with on-premises data.

In September 2019, we introduced
LiveAnalytics to provide live business
insights when migrating Hadoop analytic
workloads from on-premises to Spark-based
analytics in the cloud. This solution
allows both migrated and migrating
data to be immediately available for
analysis. LiveAnalytics works in tandem
with WANdisco’s LiveMigrator, its
petabyte-scale, non-blocking, single
scan data migration technology.

Product protection: safeguarding our IP

WANdisco’s technology continues to be
unrivalled in the marketplace. Until we
developed WANdisco Fusion, there was no
practical or affordable way for companies to
keep mass-scale real-time data consistently
and continuously replicated across distance.

Our IP – as embodied in WANdisco’s DConE
and the products we have built from this –
is well protected. To date, we have filed more
than 48 patents, and 25 have been granted
already. We also have a head start of more
than fourteen years over any potential
competition. This early foothold, and the
ongoing improvements we are making from
experience with real-world applications of
our technology at massive scale, continue
to ensure our market advantage.

Product plans for 2020 and beyond

Our product strategy will continue
to evolve in line with our indirect sales
strategy, with further enhancements
designed to capitalise on the cross-industry
opportunities and high-growth use cases
we have identified. Our main focus for 2020
will be to accelerate the speed to market of
solutions co-developed with or optimised
for our strategic partners.

WANDISCO PLC

ANNUAL REPORT AND ACCOUNTS 2019

KEY PERFORMANCE INDICATORS

Building foundations
for continued growth

Our KPIs reflect our financial
performance in 2019

Commentary on the actual performance of the Group

against each of these KPIs is set out in the Chairman

and Chief Executive’s report and the Financial review.

Changes to KPIs this year

We have updated our KPIs this year to more accurately

reflect our progress and performance.

We replaced our bookings KPI with a new KPI which

measures subscription as a % of revenue.

Revenue ($m)

$16.2m

16.2

17.0

19.6

11.4

11.0

Cash overheads ($m)

$31.7m

31.7

29.8

24.5

23.4

34.6

Subscription as a % of revenue

69%

Definition and calculation

Total of all revenue streams generated
by the Group.

Operating expenses adjusted for:
depreciation, amortisation,
capitalisation of development
expenditure and equity-settled
share-based payment.

Total subscription revenue (term
licences and maintenance and support)
as a % of total revenue.

Performance in 2019

Revenue was marginally lower in 2019,
reflecting an increased shift to
cloud-based revenues with recurring
annual revenues and some deals that
were delayed to future years.

The small decrease in revenue included
strong renewals and new contract
growth offset by some deals that were
delayed into a future period.

Cash overheads increased in the year
as we continued to make investments
in go-to-market resources and
engineering. In addition, we invested
in our strategic partnerships with
additional development.

Subscription revenue increased as a %
of sales due to our ongoing shift towards
cloud-based revenue, which is typically
annual recurring in nature. We expect
this trend to continue in future periods.

Links to strategy

Key

Deepening partner relationships

Continued customer traction

People development

WANDISCO PLC ANNUAL REPORT AND ACCOUNTS 2019

Strategic report

RISKS

Ensuring risks are
assessed and managed

The Group’s operations
expose it to a variety of risks.

Effective risk management aids
decision-making, underpins the delivery of
the Group’s strategy and objectives, and helps
to ensure that the risks the Group takes are
adequately assessed and actively managed.

The Group regularly monitors its key risks
and reviews its management processes and
systems to ensure that they are effective
and consistent with good practice. The
Board is ultimately responsible for the
Group’s risk management.

The risk management process involves
the identification and prioritisation of key
risks, together with appropriate controls
and plans for mitigation, which are then
reported to the Board. As with all businesses,
the Group is affected by a number of risks
and uncertainties, some of which are
beyond our control.

The table opposite shows the principal
risks and uncertainties which could have
a material adverse impact on the Group.

This is not an exhaustive list and there may
be risks and uncertainties of which the
Board is not aware, or which are believed
to be immaterial, which could have an
adverse effect on the Group.

Risk management framework

BOARD

Leadership of risk management, sets strategic objectives
and risk appetite and monitors performance

Accountable for the effectiveness of the Group’s internal
control and risk management processes

Read about corporate governance from page 35

AUDIT COMMITTEE

Delegated responsibility from the Board to oversee risk
management and internal controls

Oversees the effectiveness of the Group’s internal control
and risk management processes

Monitors the independence and expertise of the external auditor

Find the Audit Committee report from page 40

EXECUTIVE DIRECTORS

Communicate and disseminate risk policies

Support and help management to assess risk

Encourage open communication on risk matters

Assess materiality of risks in the context of the whole Group
and monitor mitigation and controls

Find the Board of Directors from page 30

WANDISCO PLC

ANNUAL REPORT AND ACCOUNTS 2019

Risk change

Decrease

During 2019
we significantly
enhanced our team
through key hires.

In addition, we
have enhanced
the benefits
package to our
employees globally
and enhanced share
option participation.

Risk change

No change

At 31 December
2019 the Group’s
cash resources
increased to $23.4m
(2018: $10.8m).

PEOPLE

Risk description

Potential impact

Risk mitigation

Our future success depends on retention of
senior management and key technical personnel.
Whilst much of our proprietary knowledge is
documented, our technical experts contribute
valuable skills and knowledge and, despite
contractual confidentiality agreements, there
can be no guarantee that those individuals will
not in the future join competitors or establish
themselves in competition.

This may in turn
impact our ability to
attract and retain key
talent, affecting our
achievement of
strategic objectives
and performance
milestones.

Our human resources function oversees employee
communications to ensure, given our rapidly
developing markets, employees’ understanding
of our strategic direction enables them to make
meaningful contributions to the achievement
of our goals.

Stock-based compensation has continued to be
an important component of retaining, motivating
and attracting key talent.

During the year the headcount increased
from 148 to 162. This movement was a targeted
increase in the R&D, sales and customer support
teams to provide investment in our product
and sales channel strategy. It is essential that
we retain and motivate our workforce and
attract the right talent in the case of any
replacement and new hires in the future.

FINANCING

Risk description

Potential impact

Risk mitigation

Our product, Fusion, addresses a still-emerging
market in which we have limited forward visibility,
and we continued to be a loss-making business
in 2019.

This could adversely
impact our ability to
fund investment in our
business to achieve
our strategic goals.

Our own and partner sales pipelines continue to
grow, and we have continued to build on the OEM
relationship established with IBM during 2016 and
expanded other partnerships. Operating costs
increased during the year due to some targeted
investment in R&D, sales and customer support
teams. We have prepared a detailed budget and
forecasts of the Group’s expected performance
over a period covering at least the next twelve
months from the date of the approval of these
financial statements. As well as modelling the
realisation of the sales pipeline, these forecasts
also cover several scenarios.

During the year there were two share subscriptions,
one in February 2019 which raised $17.5m of gross
proceeds and the other in November 2019 which
raised $16.5m gross proceeds.

Following the year end a share subscription
raised $25m of gross proceeds. We maintain
close relationships with our principal and
potential providers of finance and continue
to review the need for additional or alternative
funding. See also Note 2(b).

Key

Deepening partner relationships

Continued customer traction

People development

WANDISCO PLC ANNUAL REPORT AND ACCOUNTS 2019

Strategic reportRISKS CONTINUED

COMPETITION

Risk description

Potential impact

Risk mitigation

There can be no guarantee that competitors
will not develop superior products. Competitors
may have or develop greater financial, marketing
or technical resources, enabling them to
successfully develop and market competing
products. As the open-source software on
which we depend is licensed for free, our
ability to sell value-added products may be
limited by potential customers opting to rely
purely on the underlying open-source software,
together with any free extensions that might
be developed to address the same challenges
that our software resolves.

This could adversely
impact market share,
growth, revenue, margin
and overall profitability.

We protect our intellectual property by securing
patents whenever possible. To date, we have
filed more than 48 patents, 25 of which have been
granted. We continue to dedicate significant
resource to the constant enhancement of our
core intellectual property.

Senior management devotes considerable time
and resource to monitoring product releases
by potential competitors in the data replication
software market. During the year, we have
continued to invest in our technologies and
there were further new releases of our products.

Risk change

No change

During 2019 there
was no change in
our competitive
environment.

CHANNEL PARTNER ENGAGEMENT

Risk description

Potential impact

Risk mitigation

We are in partnership with an array of vendors
that offer on-premises and cloud solutions.

Some of these partnerships are relatively new
business relationships. There is a risk that we
mismanage these relationships or that partners
decide not to devote significant sales or
product integration resource to our offerings.

This could adversely
impact our partner
relationships and the
success of these
relationships.

We have established a customer success team
who are focused on supporting our customers
and partners, developing new partner relationships
and creating new commercial propositions that
derive long-term value from these relationships.

RESOURCE ALLOCATION AND OPERATIONAL EXECUTION

Risk description

Potential impact

Risk mitigation

We address a significant and rapidly growing
market, but, as a small company, we have limited
people and capital resources. Over time it will be
essential to keep adding to and refreshing this
resource, but always it will remain essential that
we ensure that resource is effectively directed to
addressing and delivering on our strategic goals.

This could result in the
balance of resources
not being focused on
the right strategic goals.

We have a business planning process which
aims to ensure the investments we make and
the allocation of existing resource are aligned
with our strategic goals, which in turn are
responsive to the evolution of our marketplace.

We continued to improve internal financial
reporting and cost control processes. These
financial reports are regularly monitored by
senior management and the Board.

Risk change

No change

During 2019 we
added a new Master
Distributor for Africa
and embedded
Fusion into
Microsoft Azure.

Risk change

No change

WANDISCO PLC

ANNUAL REPORT AND ACCOUNTS 2019

PRODUCTS

Risk description

The software on which our products is based
is complex and the products may contain
undetected defects which may be discovered
after first introduction. Such defects could
damage the Group’s reputation and reduce
revenue from subscription renewals and
extensions. Many of our products are
designed for use with open-source software,
whose development, by the open-source
community, we do not solely control. Changes
to its structure and development path may impair
the effectiveness of our products. Regulation of
data transfer is rapidly evolving and additional
regulations concerning user privacy, content
liability, data encryption and copyright protection
may reduce the value added by our products.

SALES

Risk description

Any economic downturn may have an adverse
effect on the funds available for customers
to invest in our products. Increasing budget
scrutiny may periodically extend sales cycles,
from customers’ evaluations through to
commencement of subscription contracts.
Variability of sales cycles across different sizes
and types of customer may bring volatility to our
quarterly results. Any new sales executives joining
the business, in a rapidly changing marketplace,
may take longer than expected to reach full
productivity in concluding sales transactions.

COVID-19

Risk description

Potential impact

Risk mitigation

Risk change

No change

During 2019 we continued
to successfully release new
versions of our products.

If we fail to develop and
manage a prioritised
strategy for our
products that delivers
against customer and
partner needs, there
is a financial risk
that customers will
go elsewhere.

We have invested in quality control
processes and training within our
engineering team. We have a
dedicated team committing code
to relevant open-source tools to
ensure our products interact well
with open-source components and
to monitor evolving open-source
projects to which we could potentially
add commercial value. Our product
roadmap is based on requirements
expressed by customers and partners
with whom we are pursuing sales
opportunities. Our product managers
are mandated to propose roadmap
alterations if regulations render our
intended features either more or
less relevant.

Potential impact

Risk mitigation

Risk change

This could adversely
impact our achievement
of our revenue goals
and expansion of our
customer base and
use cases.

No change

Our products enable significant
savings on data storage and
processing and, therefore, demand
should be relatively insensitive to
economic conditions. Our strategy is
oriented to generating a broad-based
set of sales opportunities, across
regions, industries, sizes of customer
and technology use cases. We have
invested in senior management and
systems to manage the completion
of sales engagement in an efficient
and commercially beneficial manner.

Potential impact

Risk mitigation

Risk change

The COVID-19 pandemic was declared a
global health emergency by the World Health
Organization on 31 January 2020. The worldwide
spread of COVID-19 has resulted in public health
responses in affected regions, including travel
bans and restrictions, social distancing
requirements and shelter-in-place orders.

Global slowdown of
economic activity
could negatively
impact our business,
operations and
financial performance.

Having employees work remotely,
cancelling all non-essential
employee travel, and cancelling,
postponing or holding virtually
events and meetings. Strict review
of non-essential expenses and
cash flow. Significant fundraise
post year end.

Increase

New risk this year. The severity,
magnitude and duration of the
COVID-19 pandemic, the public
health responses and the
economic consequences are
uncertain, rapidly changing
and difficult to predict, and
the pandemic’s impact on
our operations and financial
performance, as well as its impact
on our ability to successfully
execute our business strategies
and initiatives, remains uncertain
and difficult to predict.

Key

Deepening partner relationships

Continued customer traction

People development

WANDISCO PLC ANNUAL REPORT AND ACCOUNTS 2019

Strategic report
FINANCIAL REVIEW
ERIK MILLER, CHIEF FINANCIAL OFFICER

Significant progress
with partners

Significant progress with Microsoft and partnerships underpin
the Board’s confidence in our strategy and product focus.

2019 highlights

• Targeted increases in expenditure

to support our channel and
product development.

Revenue

Revenue was $16.2m (2018: $17.0m), reflecting
an increasing shift to cloud-based revenues with
recurring annual revenues and some deals that
were delayed to future years. The small decrease
in revenue included strong renewals and
new contract growth offset by some deals
that were delayed into a future period.

• Successfully raised $34m from existing
shareholders in two rounds in 2019.

Contract wins continue to exhibit variability
in the timing of their completion.

• Raised $25m following the year end.

Operating costs

Revenue for the year ended 31 December
2019 was $16.2m (2018: $17.0m).

Deferred revenue from sales booked
during 2019 and in previous years, and
not yet recognised as revenue, is $3.8m at
31 December 2019, at 31 December 2018
this stood at $4.3m. Our deferred revenue
represents future revenue from new and
renewed contracts, many of them spanning
multiple years.

Adjusted EBITDA loss2 was $11.7m
(2018: $9.4m), due primarily to the slight
reduction in revenue and continued
investments in the business.

Cash overheads1 increased in the year
as we made investments in go-to-market
resources and engineering, rising to $31.7m
from $29.8m in 2018. As we implemented
IFRS 163 there was a small reduction in
operating costs from the removal of
$632,000 property rent and lease costs,
which was offset by $573,000 depreciation
expense on the right of use assets.

Product development expenditure capitalised
was $5.1m in the year (2018: $4.9m). All of
this expenditure was associated with new
product features.

Our headcount was 162 as at 31 December 2019
(31 December 2018: 148). Headcount
increases in the year were principally in sales
and marketing and engineering as we added
capacity to service our new and expanded
channel partner relationships and develop
new cloud-focused products.

Profit and loss

Adjusted EBITDA2 loss for the year
was $11.7m (2018: $9.4m).

The loss after tax for the year increased
to $28.3m (2018: $19.7m), as a result of the
lower revenue and increased overheads and
share-based payment charge. The exceptional
finance loss of $2.0m (2018: $2.8m gain) arose
from the retranslation of intercompany balances
at 31 December 2019, reflecting the increase
in sterling against the US dollar. The impact of
FX rates changes on the financial statements
should be restricted to the retranslation of
US dollar denominated intercompany loans,
as opposed to the operating activities of
the business. A translation gain arising on
the net assets of overseas subsidiaries
reported in reserves results in a minimal
impact on the group net assets.

Balance sheet and cash flow

Trade and other receivables at 31 December
2019 were $8.5m (31 December 2018: $7.4m).
This includes $2.8m of trade receivables
(31 December 2018: $1.8m) and $5.7m
related to non-trade receivables
(31 December 2018: $5.6m).

Net consumption of cash was $19.4m before
financing (2018: $16.7m), resulting in a closing
cash balance of $23.4m at 31 December 2019.
The consumption of cash was due primarily
to lower revenues and a modest increase in
cash overheads. At 31 December 2019, we
had drawings under our revolving credit
facility with Silicon Valley Bank of $2.2m.

Subsequent events

On 12 June 2020 the Group announced
a placing (which was approved by General
Meeting on 29 June 2020) for the subscription
of 3,100,000 new ordinary shares of 10 pence
each in the Company (comprising 2,362,515
placing shares and 737,485 direct subscription
shares) at a price of 650 pence (a discount
of approximately 12.2% to the Company’s
closing share price on 11 June 2020) raising
gross proceeds of $25m. This represents
6.4% of the entire existing share capital of
WANdisco. The proceeds will be used to
support our relationships with strategic cloud
partners and provide growth working capital.

The global expansion of the COVID-19 virus
since the fiscal year end has resulted in
macroeconomic uncertainty. Whilst there
has been no material impact on the Group
as at the date of this report, it is difficult to
assess the short to longer-term impact of
that uncertainty on the Group's operations.

As at 31 May 2020 the Group had cash
reserves of $11.6 million.

Whilst the impact of COVID-19 is still uncertain,
we are moving forward this year with continued
business momentum as evidenced by our
landmark agreement with Microsoft announced
in June 2020. Management expects that the
potential of the agreement with Microsoft will
overcome any short-term headwinds from the
economic uncertainty surrounding the impact
of COVID-19.

IFRS 16 “Leases”

Like all companies, as required by the
International Accounting Standards Board
“IASB” the Group has initially adopted IFRS 16,
“Leases” effective 1 January 2019. The effect of
initially applying IFRS 16 is mainly attributed to
the following:

• recognition of a right of use asset

on the balance sheet;

• removal of the related rent expense and an
increase in depreciation and interest expense;

• recognition of a liability for the present value

of lease payments; and

• change to operating ratios in comparison to

prior periods.

IFRS 16 establishes a comprehensive framework
for accounting for leases. It replaced IAS 17,
“Leases”, the previous reporting standard.
The Group has adopted IFRS 16 using the
cumulative effect method, with the effect of
initially applying this standard recognised at the
date of initial application (i.e. 1 January 2019).
Accordingly, the information presented for
2018 has not been restated – i.e. it is presented,
as previously reported, under IAS 17 and
related interpretations.

Erik Miller
Chief Financial Officer
29 June 2020

1 Operating expenses adjusted for: depreciation,
amortisation, capitalisation of development
expenditure and equity-settled share-based
payment. See Note 11 for a reconciliation.

2 Operating loss adjusted for: depreciation,

amortisation and equity-settled share-based
payment. See Note 11 for a reconciliation.

3 Effective 1 January 2019, the Company adopted
a new accounting standard (“IFRS 16 Leases”),
which impacted the Company’s treatment of
operating leases. The Company adopted IFRS 16
using the cumulative effect method with the
effect of initially applying this standard recognised
at the date of initial application (i.e. 1 January 2019).
Accordingly, the information presented for 2018
has not been restated – i.e. it is presented, as
previously reported, under IAS 17 and IFRIC 4.
In the interest of comparability during the transition
year to IFRS 16, the Company has provided adjusted
EBITDA and operating loss information in accordance
with both IFRS 16 and under the previous lease
accounting standard in effect prior to the adoption
of IFRS 16 (“IAS 17 Leases”). See Note 5 to the
consolidated financial statements for a reconciliation.

Revenue ($m)

$16.2m

16.2

17.0

19.6

11.4

11.0

Cash overheads ($m)1

$31.7m

31.7

29.8

24.5

23.4

34.6

Adjusted EBITDA ($m)2

$(11.7)m

(11.7)

(9.4)

(0.6)

(7.5)

(16.0)

Cash ($m)

$23.4m

23.4

27.4

10.8

7.6

2.6

Statutory loss for the year ($m)

$(28.3)m

(28.3)

(19.7)

(13.5)

(9.3)

(29.9)

WANDISCO PLC ANNUAL REPORT AND ACCOUNTS 2019

Strategic reportSUSTAINABILITY

We are proud of
our wealth of talent

WANdisco prides itself on its wealth of talent and its retention
record. This is important given the competition for good
software engineers. We have a strong track record of keeping
people challenged, motivated and enthused by the complex
scenarios our technology addresses.

OUR PRIORITIES

The Group recognises that, although its primary responsibility is to its shareholders, it also has responsibilities towards its
employees, customers, partners, suppliers and also, ultimately, those consumers who benefit from its products, the broader
public and the environment.

OUR PEOPLE

ENVIRONMENT

SOCIAL AND COMMUNITY

WANdisco’s overriding purpose is to power
the LiveData future in a responsible and
efficient manner. We aspire to apply
sustainability management standards
equal to our business ambitions, and every
day we strive to make a difference in the
communities in which we operate.

As a company we have a strong ethos
of giving back to the community. This
includes fostering the next generation
of data scientists.

Priorities

• Attract, retain and develop our people.

• Ensure low impact of our business

on the environment.

• Development of engineering skills in
local schools, university and colleges.

Outcomes

• A number of successful new hires

in the year in key roles.

• Grant from Invest Northern Ireland.

• Internal promotions with the business.

• Investment in technology to collaborate
and reduce physical travel to reduce the
Group’s environmental footprint.

• Work placement students and

WANdisco Data Academy.

• Platform for employees to promote

and raise awareness of charities
important to them.

WANDISCO PLC

ANNUAL REPORT AND ACCOUNTS 2019

OUR PEOPLE
Delivering relevant talent

WANdisco prides itself on its wealth of
talent and its retention record. This is
important given the competition for good
software engineers. We have a strong track
record of keeping people challenged,
motivated and enthused by the complex
scenarios our technology addresses.

In addition to providing work that stretches
our people, we operate a mentoring scheme
for those joining us fresh from university or
early in their careers. Our young engineers
are given the chance to shadow and work
alongside data scientists with PhDs, many
of whom have 30 or more years’ real-world
experience. Our Chief Data Scientist,
Inventor and Co-founder, Dr Yeturu Aahlad,
who developed the complex mathematical
algorithm that forms the basis of WANdisco’s
patented DConE technology, is well known
for being highly approachable. Our younger
employees say that their day-to-day contact
with Dr Aahlad and other senior engineers
is more inspiring and useful than weeks of
classroom training. Dr Aahlad is recognised
as a global authority on distributed computing.

He has a PhD in the subject from the University
of Texas, Austin, as well as a BSc in Electrical
Engineering from the Indian Institute of
Technology (“IIT”), Madras.

support teams. In Belfast we also have
part of our software development team,
including the core of the WANdisco Fusion
development team.

In 2019 we significantly strengthened
our engineering team due to the addition
of Dr Konstantin Boudnik who joined
in September 2019 as our VP and
Chief Architect.

California: Silicon Valley

Silicon Valley is a recognised centre of
excellence for open-source development.
In San Ramon, California, our engineering
heritage goes back to our roots in the
Hadoop open-source community. Today,
some 11 developers are based here, including
our Chief Data Scientist, Dr Yeturu Aahlad.

Our employees in the UK come from all
over the world and include graduates and
PhD students from Queen’s University,
Belfast, Northern Ireland, which is globally
acclaimed for its IT credentials. Sheffield is
our European base and home to both our
core technology development and customer

We continue to look for opportunities to
achieve gender balance in our hiring policies,
in addition to seeking the best professionals
across the age and experience spectrum.
Our approach continues to be to match the
most appropriate person to the role, but in
light of findings that female representation
in technology companies is still below 20%
in some Western markets, we have taken
proactive steps, such as improving our
maternity provision, to ensure that our
Company policies are not a barrier to women
considering IT as a long-term career. In
addition, we have continued to take proactive
steps during the year to attend local events
which aim to encourage more women into
careers in engineering. At a grass-roots
level, we are also committed to attracting
talented new generations to data science
and are working with Sheffield Hallam
University to support and nurture talent.

WANDISCO PLC ANNUAL REPORT AND ACCOUNTS 2019

Strategic reportSUSTAINABILITY CONTINUED

ENVIRONMENT
Reduction in our
environmental impact

We are committed to managing our use
of resources and proactively managing
our environmental impact. We continue
to focus our commitment on areas that
are most relevant to WANdisco, our
people and our customers.

We have invested in technology to try
and encourage collaboration across our
business and also with customers and
partners to reduce business travel.

SOCIAL AND COMMUNITY
Delivering on corporate
social responsibility

WANdisco’s overriding purpose is to power
the LiveData future in a responsible and
efficient manner. We aspire to apply
sustainability management standards equal
to our business ambitions, and every day
we strive to make a difference in the
communities in which we operate.

As a company we have a strong ethos of
giving back to the community. This includes
fostering the next generation of data
scientists. This commitment spans both
sides of the Atlantic, from Sheffield in the
UK, where the Company’s British operations
are based (and where CEO David Richards
originates from) and the Belfast operation,
to Silicon Valley, where WANdisco’s North
American operations are headquartered.

In 2019, the Company and its employees
supported the following charitable and
community causes:

The Sheffield UTC Academy Trust
(University Technical College)

Members of our Sheffield team attended
meetings with the Director of Computing
at UTC Sheffield Olympic Legacy Park to
encourage college students to consider
careers in tech and widen their horizons on
the types of jobs within the industry, and to
help provide some ideas for project work.

Sheffield Hallam
University interaction

During 2019 we have continued our
practice to take Sheffield University
placement students for twelve month
placements. We have seen great success
with this with students leaving at the end
of their twelve months with the necessary
skills to obtain employment within WANdisco.
One student was taken on as a full-time
member of the Customer Success team
after their placement and University course
was completed. We have engaged with
Sheffield Hallam via their Preferred
Placement scheme and secured further
placement students for 2020.

WANDISCO PLC

ANNUAL REPORT AND ACCOUNTS 2019

School placements

We have provided work experience
placements for secondary school children
(Tapton Secondary School and Yewlands
Academy) in Sheffield.

The Sheffield College WANdisco
Data Academy

The WANdisco Data Academy was launched
at the Sheffield College in September 2019.
WANdisco has partnered with the college to
provide an enhanced learning environment
for students at the college. The students
enter the academy via application and
interview and during their time in the
WANdisco-branded classrooms, will receive
support from the Company by way of
specialist speakers, workplace visits, special
projects, masterclasses and interaction with
employees. A selection of the students will
also be able to take part in a placement year
at WANdisco spending one day per week
within the office, giving an insight into the
business, and working on projects set up
by experts in their field. Attendance at the
WANdisco Academy has been reported
as being high (94%), and feedback from
the students has been “incredible”.

David & Jane Richards Family
Foundation, https://djrff.org

Through the charitable David & Jane
Richards Family Foundation, WANdisco’s
CEO, David Richards, is investing in
programmes to improve the way schools
inspire children to learn about technology,
specifically data science.

Although many schools have introduced
creative ways to teach coding to even very
young children, David wants to see schools
inspiring pupils to use data and technology
to solve real-world problems – skills he
believes will be more useful to the economy
in the future. Created in collaboration with
both educational and industry experts, the
foundation’s pioneering “Get Creative with
Data” course is currently being taught to
over 1,000 KS3 students in eight schools
across Sheffield and South Yorkshire, with
ambitious plans for a wider rollout.

The Richards are also passionate about
ecology and the environment, and are keen
to help young people become advocates for
a greener society. Amidst an ever-growing
concern for the UK’s dwindling bee
population, the Foundation is funding the
installation and running costs of beehives
and bee colonies at a number of schools
around Sheffield.

WANdisco believes in the importance
of giving employees the opportunity to
support charities and causes that are
important to them and to raise awareness.
To enable this, we created a platform for
employees to post information on, and
which allows other employees to donate
to these charities if they wish. In the UK,
the Sheffield office donated £3,000 to
the Sheffield Children’s Charity for the
“Snowflake Switch On” in December 2019.
This money raised an astonishing £336,200
for the hospital’s “Build a Better Future”
campaign, which will create a new emergency
department, cancer ward and helipad.

Stay up to date with the latest news and
investor information at wandisco.com

WANDISCO PLC ANNUAL REPORT AND ACCOUNTS 2019

Strategic reportBOARD OF DIRECTORS

David Richards
Chairman, President, CEO
and Co‑founder

Bob Corey
Vice Chairman and
Senior Non‑executive Director

A N R

Erik Miller
Chief Financial Officer

Age
49

Age
68

Age
60

Length of tenure
Appointed 19 November 2018

Length of tenure
Appointed 5 December 2016

Skills and experience
Erik was the Chief Financial Officer of Envivio,
Inc., a NASDAQ-listed provider of video
transcoding software, from February 2010
to January 2016, following its acquisition by
Ericsson AB. From January 2008 to July 2009,
Erik served as Chief Financial Officer at SigNav
Pty. Ltd., a component supplier to the wireless
industry, where he was responsible for finance
and administration functions. From March 2006
to January 2008, he served as Chief Financial
Officer at Tangler Pty. Ltd., a social networking
company, where he was responsible for finance
and administrative functions. Erik received a BS
degree in Business Administration from the
University of California, Berkeley.

External appointments
None.

Skills and experience
Bob brings more than 30 years of executive and
financial management experience in public and
private companies in Silicon Valley with software
and hardware companies.

Bob is highly experienced in managing the
financial aspects of public companies; he has
a strong history with Wall Street, and extensive
mergers and acquisitions experience. He also
has deep corporate governance acumen and has
served on numerous boards in Silicon Valley as
Chairman of the Board, Chairman of the Audit
Committee, and a member on Compensation
and Nomination and Governance Committees.

Formerly Bob was Chief Financial Officer of
Callidus Software, a $2.4bn acquisition by SAP
in April 2018. Until September 2017, he sat on
the board and chaired the audit committee for
Apigee, a $625m acquisition by Google. He has
also served as the Chief Financial Officer of
FrontRange Solutions USA Inc., an enterprise
software company. Prior to FrontRange, Bob was
a member of the board of directors at Extreme
Networks, Inc., an ethernet solutions company,
ultimately serving as Interim Chief Executive
Officer and Executive Vice President and Chief
Financial Officer. Bob has also served as a member
of the board of directors for AmberPoint, Interwoven,
Live Ops and Veraz Networks.

Bob began his career at Arthur Andersen, is a
California CPA (not current), and has a Bachelor
of Business Administration, Accounting from
California State University at Fullerton. Bob is a
Veteran of the United States Air Force, where he
served as an Air Traffic Controller.

External appointments
None.

Length of tenure
Appointed 11 May 2012 (Chairman from
6 October 2016)

Skills and experience
Since co-founding the Company in Silicon Valley
in 2005, David has led WANdisco on a course for
rapid international expansion, opening offices
in the UK, Japan and China. David spearheaded
WANdisco to a hugely successful listing on the
London Stock Exchange (WAND:LSE) and, shortly
after, the acquisition of AltoStor, which accelerated
the development of WANdisco’s first products
for the Big Data market.

A passionate advocate of entrepreneurship,
David has established and successfully exited
several highly successful Silicon Valley technology
companies. David was the founder and CEO of
Librados, an application integration software
provider, and led the company’s acquisition by
NASDAQ-listed NetManage, Inc. in 2005. David
is a frequent commentator on a range of business
and technology issues, appearing regularly
on Bloomberg and CNBC. David holds a BSc
in Computer Science from the University
of Huddersfield.

After Paul Walker, the former Chairman, stepped
down from the Board in October 2016, David
took the role of Chairman. In 2017 David was
awarded an Honorary Doctorate by Sheffield
Hallam University in recognition of him being a
champion of British technology and a passionate
advocate of entrepreneurship.

David and his wife Jane founded the David &
Jane Richards Family Foundation with the
purpose to educate, empower and improve the
lives of children through hands-on programmes
and targeted assistance. They aim to encourage
children to fulfil their potential and make a
positive impact on the world around them. The
first programmes commenced in 2018 in some
state schools in the UK, where they will use new
methods to teach computing skills and install
beehives as part of a wider teaching curriculum.

External appointments
With over 20 years of executive experience in
the software industry, David sits on a number of
advisory and executive boards of Silicon Valley
start-up ventures.

WANDISCO PLC

AN NUAL REPORT AND ACCOUNTS 2019

Dr Yeturu Aahlad
Chief Scientist, Inventor
and Co‑founder

Grant Dollens
Non‑executive Director

A N R

Karl Monaghan
Non‑executive Director

A N R

Age
62

Age
41

Age
57

Length of tenure
Appointed 23 February 2017

Length of tenure
Appointed 9 October 2016

Length of tenure
Appointed 5 December 2016

Skills and experience
Dr Aahlad is a recognised worldwide authority
on distributed computing. He is named in 35
WANdisco patents, including US and international
patents, continuations and divisionals. It was
Dr Aahlad’s vision and years of persistence that
led to the invention of technology that many
thought was impossible – that of Active-Active
replication (WANdisco’s patented DConE
technology). Prior to WANdisco, Dr Aahlad served
as the distributed systems architect for iPlanet
(Sun/Netscape Alliance) Application Server. At
Netscape, Dr Aahlad joined the elite team in
charge of creating a new server platform based
on the CORBA distributed object framework.

Prior to Sun/Netscape Dr Aahlad worked on
incorporating the CORBA security service into
Fujitsu’s Object Request Broker. Dr Aahlad
designed and implemented the CORBA event
services while working on Sun’s first CORBA
initiative. Earlier in his career, Dr Aahlad worked
on a distributed programming language at IBM’s
Palo Alto Scientific Center.

Dr Aahlad has a PhD in Distributed Computing
from the University of Texas, Austin, and a BSc
in Electrical Engineering from IIT Madras.

External appointments
None.

Skills and experience
Prior to founding Global Frontier Investments, LLC,
Grant was an Investment Analyst and member of
the investment committee for Ayer Capital, a
long/short equity healthcare fund, where he was
focused on medical devices, diagnostics, healthcare
services, biotechnology and pharmaceutical
investments. Prior to Ayer, Grant was an Associate
in the healthcare group at BA Venture Partners
(now Scale Ventures), where he sourced, evaluated
and invested in private medical device, biotechnology,
specialty pharmaceutical and healthcare service
companies. Before BA Venture Partners, Grant
was an Investment Banking Analyst in corporate
finance at Deutsche Bank Alex. Brown focused
on the technology sector.

Grant received his MBA from the Kellogg School
of Management at Northwestern University, with
majors in Analytical Finance, Management and
Strategy, and Accounting. He received his BSc in
Biomedical Engineering from Duke University.

External appointments
Grant founded Global Frontier Investments, LLC,
a long-term oriented global equities fund, in 2010
and serves as its Portfolio Manager. Grant is also
a member of the board of ColdQuanta, Inc.

Skills and experience
Karl brings a wealth of capital markets and board
experience. Prior to founding Ashling Capital, Karl
has worked in corporate finance for Robert W. Baird,
Credit Lyonnais Securities, Bank of Ireland,
Johnson Fry and BDO Stoy Hayward. Additionally,
he trained as a Chartered Accountant with KPMG
in Dublin and holds a Bachelor of Commerce
degree from University College Dublin.

External appointments
Karl is currently Managing Partner at Ashling
Capital LLP, which he founded in December
2002, to provide consultancy services to both
quoted and private companies.

Karl is also currently a Non-executive Director
of AIM company CareTech Holdings plc.

Committee membership key

Audit Committee

Nomination Committee

Remuneration Committee

Committee Chairman

WANDISCO PLC AN NUAL REPORT AND ACCOUNTS 2019

Corporate governanceEXECUTIVE TEAM

Strong and experienced
leadership team

David Richards
Chairman, President,
CEO and Co‑founder

Erik Miller
Chief Financial Officer

Dr Yeturu Aahlad
Chief Scientist,
Inventor and Co‑founder

Paul Scott‑Murphy
VP Product Management – Platform

Dr Ramki Thurimella
VP Research & Development

Read about our Board from page 30

Length of tenure
Five years

Length of tenure
Two years

Skills and experience
Paul has overall responsibility for WANdisco’s
product strategy for platform, including the
delivery of product to market and its success.
This includes directing the product management
team, product strategy, requirements definitions,
feature management and prioritisation, roadmaps,
co-ordination of product releases with customer
and partner requirements and testing. Previously
Regional Chief Technology Officer for TIBCO
Software in Asia Pacific and Japan. Paul has a
Bachelor of Science with first class honours and
a Bachelor of Engineering with first class honours
from the University of Western Australia.

Skills and experience
Dr Thurimella has extensive experience in algorithm
design and information security. He has published
over 50 peer-reviewed papers and three book
chapters in these areas. He held various senior
positions at the University of Denver, including
the Director of Cybersecurity and the Chair of
Computer Science, and was Director of Engineering
at P2 Energy Solutions and Software Architect and
Project Manager at Symphony Media. Dr Thurimella
has a PhD in Parallel Graph Algorithms from the
University of Texas, Austin, and an MS in Computer
Science from IIT Madras.

Anne Lynch
SVP Human Resources

Larry Webster
General Counsel and Company Secretary

Dr Konstantin Boudnik
VP and Chief Architect

Length of tenure
Three years

Length of tenure
Six years

Length of tenure
Less than one year

Skills and experience
Anne was the VP HR of Envivio, Inc. She was
also the VP HR for Harmonic, Inc. as well as the
Director General of Harmonic Europe. She has
also held senior level positions at Quantum
(Seagate), Schlumberger Limited and Computer
Sciences Corporation (“CSC”). Anne earned her
BA at Clarke University and completed graduate
studies in Linguistics at Emory University and
postgraduate studies at L’université Paris-Sorbonne.
She has a Master of Arts degree in Business
Leadership and Ethics from St. Mary’s College
of California.

Skills and experience
Larry previously worked at Wilson Sonsini
Goodrich & Rosati, a large California-based law
firm, where he provided advice and services both
to large corporations and emerging growth
technology companies. He also had roles in
Gunderson Dettmer, another Silicon Valley firm,
and Hughes & Luce, a Dallas law firm. He started
his legal career at telecommunications giant
Northern Telecom in Texas. Larry holds a JD
from Brigham Young University, a BSc in Business
Management and a BA in Asian Studies, also
from Brigham Young University.

Skills and experience
Dr Konstantin Boudnik is one of the veteran
developers of Apache Hadoop, co-author of
Apache BigTop, the open-source framework for
creation of software stacks and operation of data
processing projects used by all commercial
vendors of Hadoop-based platforms. With
more than 20 years of experience in software
development, Dr Boudnik was awarded with 16
US patents in distributed computing. Over the
years, Dr Boudnik has founded a number of
technological start-ups, and his consulting
business delivers solutions for companies.

WANDISCO PLC

AN NUAL REPORT AND ACCOUNTS 2019

Keith Graham
SVP Global Sales

Length of tenure
Five years

Peter Scott
SVP Business Development – OEM Sales

Daud Khan
VP Corporate Development

Length of tenure
Eleven years

Length of tenure
Two years

Skills and experience
Keith previously spent nine years with TIBCO
Software in Asia Pacific including serving for
over five years as Regional Vice President and
Managing Director of Australia and New Zealand.
Keith worked at Librados as Vice President EMEA,
where he was part of the founding team from
start-up until the acquisition by NetManage. He
was a Regional Director at Reuters Plc, where he
was responsible for Reuters’ $100m+ software
solutions business. Keith holds an MA in
Management Science and Information Systems
Studies from Trinity College, Dublin.

Skills and experience
Peter was a member of the sales management
team at Empirix’s Web Business Unit, which was
acquired by Oracle. He was also part of the sales
management team at Vecta Software, a CRM and
business intelligence software vendor. He began
his career with Sales Dynamics, helping early
stage venture-backed technology companies
establish sales processes that enabled them to
achieve aggressive revenue targets. Prior to his
career in technology sales, Peter spent six years
in the British Army with the Royal Engineers.

Skills and experience
Daud has spent the majority of his career
following and commentating on infrastructure
and application software companies and IT
service companies. He was a Director in equity
research at Canaccord Genuity covering UK
technology companies. Previously at Berenberg,
where he established its global technology
research franchise. Daud has also had senior
roles at JP Morgan Cazenove and Merrill Lynch.
Daud qualified as an accountant (ACA) from PwC
in 1999 and has an MA in Computer Science/
Management Studies from the University
of Cambridge.

Ian Wild
VP Product Management – Customer Experience

Justin Holtzinger
VP Engineering and Customer Success

Van Diamandakis
SVP of Marketing

Length of tenure
Ten years

Length of tenure
Two years

Length of tenure
Less than one year

Skills and experience
Ian has been a part of the WANdisco team for
over ten years, in that time progressing through a
range of roles including technical sales, engineering
and product management. Ian built and managed
the rapid expansion of the UK based engineering
teams before relocating to California in 2014
where he now owns customer experience as
part of the product management function.

Skills and experience
Justin is a customer-focused leader with more
than 20 years of experience and a proven track
record of successfully building high-performance
technology teams capable of delivering unmatched
customer experiences during his seven-year career
at EMC, where he held leadership roles in professional
services, led their Global Data Migration Practice,
and later led the global services product launch
for EMC’s high-performance Big Data compute
appliance. Justin obtained his Master of Business
Administration from St. Mary’s of California.

Skills and experience
Van is a proven Silicon Valley technology
executive with over 25 years of operational
experience that draws upon his track record
leading global marketing transformations, driving
to meaningful financial events including IPOs and
acquisitions. Van has been at the forefront of B2B
technology marketing. Previously Van was a five-time
CMO and held executive marketing positions
at Oracle, WebEx, Riverbed Technology, Sage
Business Cloud, Joyent and Persado AI. Van is
a MBA graduate of The University of Iowa.

WANDISCO PLC AN NUAL REPORT AND ACCOUNTS 2019

Corporate governanceVICE CHAIRMAN’S INTRODUCTION TO GOVERNANCE
BOB COREY, VICE CHAIRMAN AND SENIOR NON-EXECUTIVE DIRECTOR

Effective governance
and leadership

As an AIM-listed company the Board has adopted the
Quoted Companies Alliance (“QCA”) Corporate Governance Code.

• David Richards fulfils the role of Chairman
and CEO of the Company. David took on
both roles following the resignation of the
prior Chairman. Bob Corey was appointed
in November 2018 as Senior Non-executive
Director and Vice Chairman to better
balance the roles of CEO and Chairman.

meet with members of the Executive Team
and to build on knowledge of the business.
There are regular interactive presentations
from, and discussions with, the Executive
Team and, in 2019, these have included the
topics of product strategy, partnerships and
engineering progress.

During the year under review, we have
continued to evaluate the composition of
our Board, but no further appointments
have been made.

In considering refreshment of the Board
and succession planning, the Board will
have regard to ongoing developments and
trends including in relation to matters such
as diversity in its broadest sense. Whilst the
Company pursues diversity, including
gender diversity, throughout the business,
the Board is not committed to any specific
targets. Instead, the Board will continue to
pursue a policy of appointing talented people
at every level to deliver high-performance.

The Board holds all its strategic decision-
making meetings at the Group’s US offices
and, as a result, takes the opportunity to

Finally, the Annual General Meeting (“AGM”)
will be held at the UK Company’s offices on
29 July 2020. Due to COVID-19 restrictions
on people gathering, the AGM will be
restricted to two attendees, both of whom
will be shareholders for the purposes of
forming a quorum. Unfortunately, other
shareholders must not attend the AGM in
person, but shareholders are strongly
encouraged to exercise their vote on the
matters of business at the AGM by submitting
a proxy appointment and giving voting
instructions. There will be a section on the
Company website allowing shareholders
to post any questions they might have.

Bob Corey
Vice Chairman and Senior
Non‑executive Director
29 June 2020

The Corporate governance statement,
together with the information provided
below and in the Audit Committee report,
explains how WANdisco’s governance
framework works. As a Board, we recognise
that we are accountable to shareholders for
good corporate governance, and we seek
to promote consistently high standards of
governance throughout the Group. The
Group promotes this culture within its
strategy and management of risks and is
continually analysing this, from information
provided by the executive management
team, to ensure compliance.

During the year, we have complied with the
QCA Code with the following exception:

Board composition

50+

3 Non-executive Directors

Tenure

17+

1 0–3 years

3 Executive Directors

5 3–5 years

WANDISCO PLC

AN NUAL REPORT AND ACCOUNTS 2019

Sector experience

David
Richards

Bob
Corey

Erik
Miller

Dr Yeturu
Aahlad

Grant
Dollens

Karl
Monaghan

Technology

Financial
management

Strategy
development

Corporate
governance

Corporate
finance

Healthcare

50
83
CORPORATE GOVERNANCE REPORT

Ensuring the long‑term
success of the Group

Board effectiveness

Meeting attendance

Board composition and responsibilities

The Board comprises three Executive
Directors (including the Chairman) and
three Non-executive Directors, two of
which are independent (Bob Corey and
Karl Monaghan).

The Board is responsible for the long-term
success of the Group. It sets the Group’s
values, standards and strategic aims and
oversees implementation within a
framework of prudent and effective
controls, ensuring only acceptable risks are
taken. It provides leadership and direction
and is also responsible for corporate
governance and the overall financial
performance of the Group.

The Board has agreed the schedule of
matters reserved for its decision, which
includes ensuring that the necessary
financial and human resources are in place
to meet its obligations to its shareholders
and others. It also approves acquisitions
and disposals of businesses, major capital
expenditure and annual financial budgets,
and sets dividend policy.

An Executive Committee supports the
Board in implementing strategy and reports
relevant matters to the Board for its
consideration and approval. This Executive
Committee comprises three Executive
Directors and eleven members of
senior management.

All the Directors have access to the advice
and services of the Company Secretary,
who is responsible for ensuring compliance
with applicable rules, regulations and
Board procedures.

Directors have the right to request that any
concerns they have are recorded in the
appropriate Committee or Board minutes.

David Richards

Bob Corey

Erik Miller

Dr Yeturu Aahlad

Grant Dollens

Karl Monaghan

Attended

Did not attend

Not required to attend

Board and Committee meetings

The table above shows the number of Board meetings held during the year, and the
attendance of each Director. See our Committee reports for Audit, Remuneration and
Nomination Committee meetings.

Board Committees

To assist the Board in carrying out its functions and to ensure that there is independent
oversight of internal controls and risk management, the Board delegates certain responsibilities
to its three principal Committees as shown in the governance framework diagram below.

More detail on each of the Committees can be found on pages 39 to 43.

Governance framework

BOARD

EXECUTIVE TEAM

Chaired by the Chief Executive Officer, it comprises the three Executive
Directors and senior management representation from product, marketing,
engineering, business development, finance, legal, HR, sales and support. It
assists the Executive Directors in implementing the business plan and policies
and managing the operational and financial performance of the Company.

Nomination Committee

Read more from page 42

WANDISCO PLC AN NUAL REPORT AND ACCOUNTS 2019

Corporate governanceCORPORATE GOVERNANCE REPORT CONTINUED

Ensuring Board
effectiveness

Board effectiveness continued

Board independence, appointment
and re‑election

There are two Non-executive Directors,
who are considered by the Board to be
independent of the management and are
free to exercise independence of judgement.
They have never been employees of the
Group and they do not participate in the
Group’s bonus arrangements. They receive
no other remuneration from the Group
other than their Directors’ fees.

Each new Director, on appointment, is
briefed on the activities of the Group.
Professional induction training is also
given as appropriate. The Chairman briefs
Non-executive Directors on issues arising
at Board meetings if required and Non-
executive Directors have access to the
Chairman at any time. Ongoing training
is provided as needed. Directors were
updated on a frequent and regular basis
on the Group’s business.

Directors are subject to re-election at the
Annual General Meeting (“AGM”) following
their appointment. In addition, at each AGM
one-third (or the whole number nearest to
one-third) of the Directors retire by rotation.

Terms of appointment
and time commitment

All Non-executive Directors are appointed
for an initial term of three years subject
to satisfactory performance. After this
time, they may serve additional three-year
terms following review by the Board. All
Non-executive Directors are expected to
devote such time as is necessary for the
proper performance of their duties. Directors
are expected to attend all Board meetings
and Committee meetings of which they
are members and any additional meetings
as required. Further details of their terms
and conditions are summarised in the
Remuneration report on pages 42 and 43
and the terms and conditions of appointment
of the Non-executive Directors are available
at the Company’s registered office.

Development, information
and support

All Board Directors have access to the
Company Secretary, who advises them on
governance matters. The Chairman and
the Company Secretary work together
to ensure that Board papers are clear,
accurate, delivered in a timely manner to
Directors and of sufficient quality to enable
the Board to discharge its duties. Specific
business-related presentations are given
by members of the Executive Team when
appropriate and external speakers also
attend Board meetings to present on
relevant topics. As well as the support
of the Company Secretary, there is a
procedure in place for any Director to take
independent professional advice at the
Company’s expense in the furtherance of
their duties, where considered necessary.
As part of the Board evaluation process,
training and development needs are
considered and training courses are
arranged, where appropriate.

Board activities throughout the year

AT EACH SCHEDULED MEETING
Discuss:
• Strategic and operational matters

• Trading results

• Management accounts and financial commentary

February

March

• Treasury matters

• Approval of subscription

• Approval of annual budget

• Legal, Company Secretarial and regulatory matters

of new shares

• Investor relations

• Corporate affairs

Review:
• Minutes of previous meetings

• The implementation of actions agreed at previous meetings

• The rolling annual agenda items

• Update on product

strategy and partnerships

WANDISCO PLC

AN NUAL REPORT AND ACCOUNTS 2019

In line with the Code, we ensure that any
new Directors joining the Board receive
appropriate support and are given a tailored
induction programme organised through
the Company Secretary, including the
provision of background material on the
Company and briefings with management
as appropriate. Each Director’s individual
experience and background are considered
in developing a programme tailored to his
or her own requirements. Any new Director
will also be expected to meet with major
shareholders if required.

Succession planning

The Nomination Committee focuses on
Board succession and composition and
succession planning.

Board evaluation

The performance of the Board was
evaluated informally on an ongoing basis
with reference to all aspects of its
operation including, but not limited to:
the appropriateness of its skill level; the
way its meetings were conducted and
administered (including the content of
those meetings); the effectiveness of the
various Committees; whether corporate
governance issues were handled in a
satisfactory manner; and whether there
was a clear strategy and objectives. The
conclusion was that the Board was
performing as expected.

Each Director’s performance is appraised
through the normal appraisal process. Save
for the Chairman and Chief Executive Officer,
who was appraised by the Non-executive
Directors, the Executive Board members
were appraised by the Chairman and Chief
Executive Officer. The Non-executive
Directors were appraised by the Chairman
and Chief Executive Officer.

Internal controls and risk
management

The Board is responsible for the Group’s
system of internal controls and for reviewing
its effectiveness. Such a system is designed
to mitigate against and manage, rather than
eliminate, the risk of failure to achieve
business objectives and can only provide
reasonable and not absolute assurance
against material misstatement or loss.

Executive management considered the
potential financial and non-financial risks
which may impact on the business as part
of the quarterly management reporting
procedures. The Board received the
principal risk outputs of these quarterly
management reports and monitored the
position at Board meetings. The principal
risks are set out on pages 20 to 23.

The Board confirms that there are ongoing
processes for identifying, evaluating and
mitigating the significant risks faced by the
Group. The processes, which have been in

place throughout the year and up to the
date of approval of the Annual Report
and Accounts, are consistent, so far as is
appropriate for the nature and size of the
Group’s business, with the guidance issued
by the Financial Reporting Council.

The Group’s internal financial control
and monitoring procedures include:

• clear responsibility on the part of line
and financial management for the
maintenance of good financial controls
and the production of accurate and timely
financial management information;

• the control of key financial risks through

appropriate authorisation levels and
segregation of accounting duties;

• detailed monthly budgeting and reporting
of trading results, balance sheets and cash
flows, with regular review by management
of variances from budget;

• reporting on any non-compliance
with internal financial controls and
procedures; and

• review of reports issued by the

external auditor.

The Audit Committee, on behalf of the
Board, reviewed reports from the external
auditor together with management’s
response regarding proposed actions.
In this manner, it has reviewed the
effectiveness of the system of internal
controls for the year under review.

• Update on engineering

and partnerships

• Approval of subscription

of new shares

April

May

August

November

December

• Update on product strategy and partnerships

• Update on product

strategy and partnerships

• Review and approval of Annual Report

and Accounts 2018

• Review and approval of preliminary

announcement of 2018 results

• Consideration and approval of appointment

of external auditor

• Review of Non-executive Director fees

• Approval of appointment

of new auditor

WANDISCO PLC AN NUAL REPORT AND ACCOUNTS 2019

Corporate governanceCORPORATE GOVERNANCE REPORT CONTINUED

Communicating
to our shareholders

Relations with shareholders

WANdisco is committed to communicating
openly with its shareholders to ensure that
its strategy and performance are clearly
understood. During the year, numerous
activities were undertaken to engage
with shareholders.

Results announcements

We communicate with shareholders
through our full-year and half-year
announcements and trading updates.
We invite institutional shareholders and
analysts to view our full-year and half-year
announcements. The presentation slides
and a webcast of the presentations are
made available at www.wandisco.com/
investors/reports-and-presentations on
the day of announcement.

Shareholder meetings

The AGM is the principal forum for dialogue
with private shareholders, and we encourage
shareholders to attend and participate.
The AGM was held on Wednesday 22 May

2019 key shareholder engagements

2019 at our office in Sheffield, with the
results being published on our website,
www.wandisco.com/investors.

This year’s AGM will be held at 10am
on Wednesday 29 July 2020 at our office
in Sheffield. Full details are included in
the Notice of Meeting, which is sent to
shareholders at least 21 days before the
meeting. Due to COVID-19 restrictions,
the meeting will be restricted to two
attendees. However, shareholders are
strongly encouraged to exercise their vote.
In addition, there will be a section on the
Company website allowing shareholders
to post any questions they might have.

Website and shareholder
communications

Our website, www.wandisco.com/
investors, provides a range of corporate
information on our business, results and
financial performance, including copies
of our Annual Report and Accounts,
announcements and presentations.

Meetings, roadshows
and conferences

The Directors actively seek to build a
mutual understanding of objectives with
institutional shareholders. Shareholder
relations are managed primarily by the
Chief Executive Officer and the Chief
Financial Officer. A calendar of events
is set out below.

The Chief Executive Officer and the
Chief Financial Officer regularly meet with
institutional shareholders to foster a mutual
understanding of objectives. In particular,
an extensive programme of meetings with
analysts and institutional shareholders is
held following the interim and preliminary
results announcements. Feedback from
these meetings and market updates prepared
by the Company’s Nomad are presented
to the Board to ensure it understands
shareholders’ views. The other Non-executive
Directors are available to shareholders to
discuss strategy and governance issues.

Month

March 2019

April 2019

May 2019

June 2019

September 2019

November 2019

Communication

Type

The Global Group UK Investor Show in London

Preliminary results

Stifel LSE Discovery Conference in New York

Annual Report published

AGM

Result of AGM

Oppenheimer Emerging Growth Conference in New York

LD Micro Conference in Los Angeles

Stifel 2019 Cross Sector Insight Conference in Boston

Interim results

Craig Hallum Capital Group 10 Annual Alpha Select Conference New York

Needham Big Data 1x1 Conference San Francisco

December 2019

Stifel UK Technology & Internet Conf New York

Meeting

RNS

Report

Conference

WANDISCO PLC

AN NUAL REPORT AND ACCOUNTS 2019

NOMINATION COMMITTEE REPORT
DAVID RICHARDS, CHAIRMAN, PRESIDENT, CEO AND CO-FOUNDER

Monitoring
succession planning

The Nomination Committee assists the Board in determining
Board appointments and succession planning for Directors.

Committee meeting attendance

David Richards

Bob Corey

Erik Miller

Grant Dollens

Karl Monaghan

Attended

Did not attend

Not required to attend

Estimated allocation of time

Performance evaluation

80% Succession planning

15% Structure review

Committee composition

Committee meetings

The Nomination Committee is chaired
by David Richards and the other members
of the Committee are Bob Corey, Grant
Dollens, Karl Monaghan and Erik Miller.

Committee responsibilities

The Nomination Committee has responsibility
for: reviewing the structure, size and
composition of the Board and recommending
to the Board any changes required; succession
planning; and identifying and nominating for
approval Board candidates to ﬁll vacancies
as and when they arise. The Committee is
also responsible for reviewing the results of
any Board performance evaluation process
and making recommendations to the Board
concerning the Board’s Committees and
the re-election of Directors at the AGM.

The membership of the Nomination Committee
comprises the three Non-executive Directors,
David Richards and Erik Miller.

The Nomination Committee is required to
meet not less than twice a year and at such
other times as required.

It has written terms of reference, which are
available for review at www.wandisco.com.

The Nomination Committee met two times
in the year, with the Chief Executive Officer
and Chief Financial Officer in attendance.

The Board has considered diversity in
broader terms than just gender and believes
it is also important to have the correct
balance of skills, experience, independence
and knowledge on the Board. All Board
appointments will be made on merit and
with the aim of achieving a correct balance.
The Group has formal policies in place to
promote equality of opportunity across the
whole organisation and training is provided
to assist this.

Currently, there are no women on the
Board. As opportunities arise, the Board will
seek to increase the presence of women on
the Board consistent with the above policy
and the terms of reference of the
Nomination Committee.

David Richards
Chairman, President,
CEO and Co‑founder
29 June 2020

WANDISCO PLC AN NUAL REPORT AND ACCOUNTS 2019

Corporate governance80
+
15
AUDIT COMMITTEE REPORT
BOB COREY, VICE CHAIRMAN AND SENIOR NON-EXECUTIVE DIRECTOR

Ensuring compliance
and effectiveness

I am pleased to present the Report of the Audit Committee,
which provides a summary of the Committee’s role and
activities during the 2019 financial year.

Committee composition

Bob Corey is the Chairman of the
Committee and the other members of the
Committee are Karl Monaghan and Grant
Dollens. The Board considers Bob Corey to
have relevant and recent financial experience,
given his biography set out on page 30.

Committee responsibilities

The Audit Committee (“the Committee”) is
established by and is responsible to the Board.
It has written terms of reference, which are
available for review at www.wandisco.com.
Its main responsibilities are:

• to monitor and be satisfied that the

Group’s financial statements are fair,
balanced and understandable before
submission to the Board for approval,
ensuring their compliance with the
appropriate accounting standards,
the law and the AIM Rules;

• to monitor and review the effectiveness
of the Group’s system of internal control;

• to make recommendations to the Board
in relation to the appointment of the
external auditor and its remuneration,
following appointment by the shareholders
in general meeting, and to review and be
satisfied with the auditor’s independence,
objectivity and effectiveness on an
ongoing basis; and

• to implement the policy relating to any
non-audit services performed by the
external auditor.

The Committee is authorised by the Board
to seek and obtain any information it
requires from any officer or employee of
the Group and to obtain external legal or
other independent professional advice as
is deemed necessary by it.

Committee meetings

There were two meetings of the Committee
during the year scheduled to coincide with
the review of the scope of the external
audit and observations arising from its work
in relation to internal control, and to review
the financial statements. The external
auditor attended all of these meetings.
Since the end of the financial year, the
Committee has met once (in February
2020) to consider, amongst other matters,
this Annual Report, with the external
auditor being present at this meeting.
The Committee also met with the external
auditor, without the Executive Directors
being present, once during the year.

Significant work undertaken
by the Committee during the year

Review of the 2019
financial statements

The Audit Committee reviewed and
endorsed, prior to submission to the Board,
full-year financial statements and the
preliminary, interim results and trading
update announcements. The Committee
considered risk management updates,
agreed external audit plans, approved
accounting policies and ensured
appropriate whistleblowing arrangements
and associated policies were in place.

Committee meeting attendance

Bob Corey

Grant Dollens

Karl Monaghan

Attended

Did not attend

Not required to attend

Estimated allocation of time

Performance evaluation

20% Accounting matters

10% Risk management

15%

Internal controls

35% Financial reporting

15% Audit tender

WANDISCO PLC

AN NUAL REPORT AND ACCOUNTS 2019

20
+
10
+
15
+
35
+
15
In reviewing the financial statements
with management and the auditor, the
Committee has discussed and debated the
critical accounting judgements and key
sources of estimation uncertainty as set
out in Note 4 to the financial statements.
As a result of our review, the Committee
has identified the following issues that
require a high level of judgement or have
a significant impact on the interpretation
of this Annual Report.

Brexit

Management reviewed the potential impacts
that Brexit could have on the business.

The Committee is satisfied with the findings
identified and that appropriate disclosures
have been made in the Annual Report
and Accounts.

Going concern

The consolidated financial statements have
been prepared on a going concern basis,
which assumes that the Group will be able
to meet the mandatory repayment terms of
the banking facilities as disclosed in Note 25.

The detailed budget and forecasts formed
the basis of the going concern review and
management also prepared a sensitised
version, which considered a delay in revenue
growth and included actions, under the
control of the Group, that they could take
to further significantly reduce the cost base
in the coming year in the event that
longer-term revenue is set to remain
consistent with the level reported in 2019.
Further details are included in Note 2(b).

The Committee is satisfied with the findings
of the going concern review and that
appropriate disclosures have been made
in the Annual Report and Accounts.

Revenue recognition

Under IFRS 15 the Group is required to
de-bundle subscription arrangements
into the separate licence and maintenance

and support performance obligations. The
method of allocation requires judgement
and is based on prior experience of separate
arrangements (e.g. when maintenance and
support is sold separately on a perpetual
licence) along with market practice.

The Committee is satisfied that the
judgements made by management are
reasonable and that appropriate disclosures
have been made in the Annual Report
and Accounts.

Capitalisation and carrying value
of development costs

The Group capitalises development costs
which meets the criteria required under
IAS 38. The carrying amount of the
intangible assets is allocated to CGUs.
The recoverable amount was calculated
using a value in use basis based on
financial forecasts.

The Committee is satisfied that the
judgements made by management in the
value in use calculation are reasonable and
that appropriate disclosures have been
made in the Annual Report and Accounts.

In reaching this conclusion the Committee
has considered the reports and analysis
prepared by management and has also
constructively challenged assumptions.
The Committee has also considered
detailed reporting from and discussions
with the external auditor.

Committee performance

The Committee carried out an annual
assessment of its own performance during
the year and the conclusion was that the
Committee was performing as expected.

External auditor

During 2019 there was an audit rotation,
and BDO LLP was selected and appointed
as the Company’s auditor following a
review of a number of potential providers.

As required, the external auditor provided
the Committee with information for review
about policies and processes for maintaining
its independence and compliance regarding
the rotation of audit partners and staff.
The Committee considered all relationships
between the external auditor and the Group
and was satisfied that they did not
compromise the auditor’s judgement or
independence, particularly with the
provision of non-audit services.

An internal review of the effectiveness of
the external audit process was carried out
during the year and no deficiencies were
found. Management was satisfied with the
external audit team’s knowledge of the
business and that the scope of the audit
was appropriate, all significant accounting
judgements had been challenged robustly
and the audit had been effective.

All of the above was considered before
a recommendation was made by the
Committee to the Board to propose BDO
for election at the AGM.

Internal audit function

Given the Group’s size and development,
the Board did not consider it necessary to
have an internal audit function during the
year. The Board will continue to monitor
this requirement annually.

Bob Corey
Vice Chairman and
Senior Non‑executive Director
29 June 2020

WANDISCO PLC AN NUAL REPORT AND ACCOUNTS 2019

Corporate governanceREMUNERATION COMMITTEE AND REMUNERATION REPORT
KARL MONAGHAN, CHAIRMAN OF THE REMUNERATION COMMITTEE

Determining
remuneration policies

This report sets out information about the remuneration of the
Directors of the Company for the year ended 31 December 2019.

Committee meeting attendance

Karl Monaghan

Bob Corey

Grant Dollens

Attended

Did not attend

Not required to attend

Estimated allocation of time

Performance evaluation

25% Remuneration policy

70% Share option grant review

The Board, as required by the QCA Code,
supports the principle of transparency and
has prepared this report in order to provide
information to shareholders on executive
remuneration arrangements.

The Remuneration Committee

Committee composition

The Remuneration Committee is chaired
by Karl Monaghan and the other members
of the Committee are Bob Corey and
Grant Dollens.

Committee responsibilities

The Remuneration Committee’s
primary purposes are to assist the
Board in determining the Company’s
remuneration policies, review the
performance of the Executive Directors
and make recommendations to the Board
on matters relating to their remuneration
and terms of service, the granting of share
options, and other equity incentives.

Committee meetings

The Remuneration Committee met four
times in the year, with the other Board
members in attendance as appropriate.

Remuneration Committee report

The content of this report is unaudited
unless stated.

Remuneration policy

The objective of the remuneration policy
is to ensure that the overall remuneration
of Executive Directors is aligned with the
performance of the Group and preserves
an appropriate balance of income and
shareholder value.

Non‑executive Directors

Remuneration of the Non-executive
Directors is determined by the Executive
Directors. Non-executive Directors are not
entitled to pensions, annual bonuses or
employee benefits. They are entitled to
participate in share option arrangements
relating to the Company’s shares. Each of
the Non-executive Directors has a letter of
appointment stating his annual fee and that
his appointment is initially for a term of
three years, subject to re-appointment at
the AGM, renewable for further periods of
three years. Their appointment may be
terminated with three months’ written
notice at any time.

Directors’ remuneration

The normal remuneration arrangements for
Executive Directors consist of basic salary
and annual performance-related bonuses.
In addition, they receive private healthcare.

The Committee intends to make further
awards under the Long-Term Incentive Plan
(“LTIP”) during 2020. Details of any awards
will be disclosed in next year’s
Remuneration Committee report.

2019 annual bonus

The 2019 Bonus Plan comprised a target
bonus based on a % of base salary. The
Bonus Plan is based on the achievement of
corporate financial performance measures,
including revenue and overheads targets.
Having regard to the performance of the
business, the Remuneration Committee
resolved to pay bonuses as set out on page 43.

Similar bonus principles will be adopted for
2020. Performance targets and weightings
were set by the Remuneration Committee
at the start of the year.

WANDISCO PLC

AN NUAL REPORT AND ACCOUNTS 2019

25
+
70
Directors’ interests

Details of the Directors’ shareholdings are included in the Directors’ report on page 45.

Directors’ share options

Aggregate emoluments disclosed below do not include any amounts for the value of options to acquire ordinary shares in the Company
granted to or held by the Directors. Details of options for Directors who served during the year are as follows:

Executive Directors
David Richards

Dr Yeturu Aahlad

Erik Miller

Non-executive Directors
Grant Dollens
Karl Monaghan

Bob Corey

1 All options were granted on 30 April 2019.

Directors’ remuneration (audited)

Executive Directors
David Richards
Erik Miller
Dr Yeturu Aahlad

Non-executive Directors
Grant Dollens
Karl Monaghan
Bob Corey

Number of
options at
1 January
2019

Exercise
price

Number of
options
granted ¹

Number of
options
exercised

Number of

Number of
options at
options 31 December
2019
lapsed

£1.90
£0.10
£0.10
£0.10
£0.10
£0.10
£0.10
£0.10
£1.90
£8.39
£0.10
£0.10
£0.10

£0.10
£0.10
£0.10
£0.10

92,771
241,037
18,123
—
—
241,037
18,123
—
410,789
423,707
18,123
—
—

—
22,249
—
22,249
—

—
—
—
29,094
23,764
—
—
23,764
—
—
—
9,904
23,764

—
—
7,923
—
7,923

—
—
—
—
—
—
—
—
—
—
—
—
—

—
—
—
—
—

92,771
—
241,037
—
18,123
—
29,094
—
23,764
—
241,037
—
18,123
—
—
23,764
— 410,789
— 423,707
18,123
—
9,904
—
23,764
—

—
—
—
—
—

—
22,249
7,923
22,249
7,923

Payment
currency

Salary/fees
‘000

Bonus ²
‘000

Benefits ¹
‘000

31 December
2019
Total
‘000

31 December
2018
Total
‘000

$
$
$

£
£
£

490
250
150

40
40
50

367
125
—

—
—
—

39
27
20

—
—
—

896
402
170

40
40
50

891
399
168

40
40
6

1 Benefits include the provision of private health insurance for Executive Directors and their immediate families.

2 50% of bonus due for David Richards and Erik Miller is to be settled via RSUs which have a one-year vesting period.

The total Directors’ remuneration for the period ended 31 December 2019, in US dollars, was $1,637,000 (2018: $1,570,000).

Approval

This report was approved by the Directors and signed by order of the Board.

Karl Monaghan
Chairman of the Remuneration Committee
29 June 2020

WANDISCO PLC AN NUAL REPORT AND ACCOUNTS 2019

Corporate governanceDIRECTORS’ REPORT
ERIK MILLER, CHIEF FINANCIAL OFFICER

The Directors present their report and the
audited financial statements for the year
ended 31 December 2019 in accordance
with the Companies (Jersey) Law 1991.
Particulars of important events affecting
the Group, together with the factors likely
to affect its future development,
performance and position, are set out
in the Strategic report on pages 6 to 29,
which is incorporated into this report by
reference together with the Corporate
governance report on pages 35 to 38.
In addition, this report should be read in
conjunction with information concerning
employee share schemes, which can be
found in the Remuneration Committee
report on pages 42 and 43 and in Note 15
to the financial statements, and which is
incorporated by way of cross-reference
into the Directors’ report.

Principal activity

The principal activity of the Group is the
development and provision of global
collaboration software.

Business review and future
developments

A review of the Group’s operations and
future developments is covered in the
Strategic report section of the Annual
Report and Accounts on pages 6 to 29.
This report includes sections on strategy
and markets and considers key risks and
key performance indicators.

Financial results

Details of the Group’s financial results
are set out in the Consolidated statement
of profit or loss and other comprehensive
income and other components on
pages 51 to 87.

After making reasonable enquiries and following two share subscriptions during the year,
one in February 2019 for raised $17.5m of gross proceeds and the other in November 2019
which raised $16.5m of gross proceeds, the Board has an expectation that the Group and
the Company have adequate financial resources together with a strong business model to
ensure they continue to operate for the foreseeable future. Accordingly, the Directors have
adopted the going concern basis in preparing the financial statements. This is described in
more detail in Note 2(b).

Annual General Meeting (“AGM”)

On pages 89 to 91 is the notice of the Company’s eighth AGM to be held at 10am on
29 July 2020 at the UK Company’s offices, Castle House, 1–13 Angel Street, Sheffield S3 8LN.

Directors

The Directors who served on the Board and on Board Committees during the year are set
out on pages 30 and 31. One-third of the Directors are required to retire at the AGM and
can offer themselves for re-election.

Information on Directors’ remuneration and share option rights is given in the
Remuneration Committee report on pages 42 and 43.

Directors’ indemnity arrangements

The Directors benefited from qualifying third party indemnity provisions in place during
the financial year and at the date of this report. Other than this, and with the exception of
employment contracts between each Executive Director and the Group, at no time during
the year did any Director hold a material interest in any contract of significance with the
Group or any of its subsidiary undertakings. The Group has purchased and maintained
throughout the year Directors’ and officers’ liability insurance in respect of all Group companies.

None of the Directors had any interest in the share capital of any subsidiary company.
Further details of options held by the Directors are set out in the Remuneration Committee
report on pages 42 and 43.

The middle market price of the Company’s ordinary shares on 31 December 2019 was
445.00 pence and the range during the year was 338.00 pence to 781.00 pence, with
an average price of 514.91 pence.

Significant shareholders

The Company is informed that, at 22 June 2020 (the latest practicable date prior to
publication), individual registered shareholdings of more than 3% of the Company’s issued
share capital were as follows:

Dividends

The Directors do not recommend the
payment of a dividend (2018: $nil).

Invesco Ltd. (Oppenheimer)

Davis Capital Partners, LLC

T Rowe Price International

Lombard Odier Asset Management (Europe) Limited

Going concern

The Company’s business activities, together
with risk factors which potentially affect
its future development, performance or
position, can be found in the Strategic
report on pages 6 to 29. Details of the
Company’s financial position and its cash
flows are outlined in the Financial review
on pages 24 and 25.

Conifer Capital Management

Swedbank Robur Fonder AB

Dr Yeturu Aahlad

Grant Dollens1

David Richards

Ross Creek Capital Management, LLC

UBS Securities

1 Of which 526,384 shares (1.09%) are held by Grant Dollens personally and 1,635,355 shares (3.39%)
are held by Global Frontier Partners, in which Grant Dollens is interested (Grant Dollens is currently
Managing Member at Global Frontier Investments, LLC, a US-based investment manager, and
Portfolio Manager for Global Frontier Partners, LP, a shareholder in WANdisco).

WANDISCO PLC

AN NUAL REPORT AND ACCOUNTS 2019

% of issued
ordinary
share
capital

Number
of shares

5,000,000

10.36%

3,609,286

3,628,167

2,889,968

2,844,177

2,700,000

2,442,504

2,161,739

2,119,233

2,025,000

1,572,135

7.48%

7.52%

5.99%

5.90%

5.60%

5.06%

4.48%

4.39%

4.20%

3.26%

Auditor

As recommended by the Audit Committee,
a resolution for the appointment of BDO
LLP as auditor of the Company is to be
proposed at the forthcoming AGM.

Audit information

Each of the Directors at the date of the
Directors’ report confirms that, so far as
he is aware, there is no relevant audit
information of which the Company’s
auditor is unaware and he has taken all
the reasonable steps that he ought to have
taken as a Director to make himself aware
of any relevant audit information and to
establish that the Company’s auditor is
aware of the information.

Subsequent events

On 12 June 2020 the Group announced a
placing (which was approved by General
Meeting on 29 June 2020) for the subscription
of 3,100,000 new ordinary shares of 10 pence
each in the Company (comprising 2,362,515
placing shares and 737,485 direct subscription
shares) at a price of 650 pence (a discount of
approximately 12.2% to the Company’s closing
share price on 11 June 2020) raising gross
proceeds of $25m. This represents 6.4% of
the entire existing share capital of WANdisco.
The proceeds will be used to support our
relationships with strategic cloud partners
and provide growth working capital.

The Directors’ report has been approved
by the Board of Directors on 29 June 2020.

Signed on behalf of the Board.

Erik Miller
Chief Financial Officer
29 June 2020

Directors’ shareholdings

The beneficial interests of the Directors in the share capital of the Company at
31 December 2019 and 22 June 2020 (the latest practicable date prior to publication) were
as follows:

Executive

David Richards

Dr Yeturu Aahlad

Erik Miller

Non-executive

Grant Dollens¹

Karl Monaghan

At 31 December 2019

At 22 June 2020

% of issued
ordinary
share
capital

Number
of shares

% of issued
ordinary
share
capital

Number
of shares

2,119,233

4.39% 2,119,233

2,442,504

5.06% 2,442,504

27,124

0.06%

27,124

2,161,739

4.48% 2,161,739

53,542

0.11%

53,542

4.39%

5.06%

0.06%

4.48%

0.11%

1 Of which 526,384 shares (1.09%) are held by Grant Dollens personally and 1,635,355 shares (3.39%)
are held by Global Frontier Partners, in which Grant Dollens is interested (Grant Dollens is currently
Managing Member at Global Frontier Investments, LLC, a US-based investment manager,
and Portfolio Manager for Global Frontier Partners, LP, a shareholder in WANdisco).

Articles of Association

Any amendments to the Articles of
Association of the Company may be made
by special resolution of the shareholders.

Research and development

The Group expended $8,263,000 during
the year (2018: $8,072,000) on research
and development, of which $5,062,000
(2018: $4,910,000) was capitalised within
intangible assets and $3,201,000 (2018:
$3,162,000) was charged to the income
statement. In addition, an amortisation
charge of $5,284,000 (2018: $5,725,000)
has been recognised against previously
capitalised costs.

It is the policy of the Group that the
training, career development and promotion
of a disabled person should, as far as
possible, be identical to that of a person
who does not have a disability. In the event
of members of staff becoming disabled,
every effort is made to ensure that their
employment with the Group continues.

Health and safety

The Group is committed to providing a safe
and healthy working environment for all
staff and contractors. The Group’s health
and safety standard sets out the range of
policies, procedures and systems required
to manage risks and promote wellbeing.

Derivatives and financial instruments

The Group’s policy and exposure to
derivatives and financial instruments is set
out in Note 25.

Political and charitable donations

During the year ended 31 December 2019
the Group made political donations of $nil
(2018: $nil) and charitable donations
of $10,170 (2018: $1,715).

Employee involvement

It is the Group’s policy to involve employees
in its progress, development and performance.
Applications for employment by disabled
persons are fully considered, bearing in
mind the respective aptitudes and abilities
of the applicants concerned. The Group is
a committed equal opportunities employer
and has engaged employees with broad
backgrounds and skills.

Supplier payment policy and practice

The Group does not operate a standard
code in respect of payments to suppliers.
The Group agrees terms of payment with
suppliers at the start of business and then
makes payments in accordance with
contractual and other legal obligations.

The number of creditor days outstanding at
31 December 2019 was 19 days (2018: 32 days).

WANDISCO PLC AN NUAL REPORT AND ACCOUNTS 2019

Corporate governanceSTATEMENT OF DIRECTORS’ RESPONSIBILITIES
IN RESPECT OF THE ANNUAL REPORT AND THE FINANCIAL STATEMENTS

Directors’
responsibilities

The Directors are responsible for preparing the Annual Report
and the Group financial statements in accordance with
applicable law and regulations.

Company law requires the Directors to
prepare Group financial statements for
each financial year. As required by the AIM
Rules of the London Stock Exchange they
are required to prepare the Group financial
statements in accordance with International
Financial Reporting Standards as adopted
by the EU (“IFRSs as adopted by the EU”)
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 of its profit or loss for that period. In
preparing the Group financial statements,
the Directors are required to:

• select suitable accounting policies
and then apply them consistently;

• make judgements and estimates that
are reasonable, relevant and reliable;

• state whether they have been prepared
in accordance with IFRSs as adopted
by the EU; and

• assess the Group’s ability to continue as

a going concern, disclosing, as applicable,
matters related to going concern and use
the going concern basis of accounting
unless they either intend to liquidate the
Group or to cease operations, or have
no realistic alternative but to do so.

The Directors are responsible for keeping
adequate accounting records that disclose
with reasonable accuracy at any time the
financial position of the Company and to
enable them to ensure that the financial
statements comply with the Companies
(Jersey) Law 1991. They are responsible for
such internal control as they determine is
necessary to enable the preparation of
financial statements that are free from
material misstatement, whether due

to fraud or error, and have general
responsibility for taking such steps as are
reasonably open to them to safeguard the
assets of the Company and to prevent and
detect fraud and other irregularities.

The Directors are responsible for the
maintenance and integrity of the corporate
and financial information included on the
Company’s website. Legislation in Jersey
governing the preparation and dissemination
of financial statements may differ from
legislation in other jurisdictions.

WANDISCO PLC

AN NUAL REPORT AND ACCOUNTS 2019

INDEPENDENT AUDITOR’S REPORT
TO THE MEMBERS OF WANDISCO PLC

Opinion

Audit scope

We have audited the financial statements of WANdisco plc
(“the Parent Company”) and its subsidiaries (“the Group”) for the
year ended 31 December 2019 which comprise the Consolidated
statement of profit or loss and other comprehensive income, the
Consolidated statement of financial position, the Consolidated
statement of changes in equity, the Consolidated statement of
cash flows and the notes to the financial statements, including a
summary of significant accounting policies. The financial reporting
framework that has been applied in their preparation is applicable
law and International Financial Reporting Standards as adopted
by the European Union (“IFRSs as adopted by the EU”).

In our opinion, the financial statements:

• give a true and fair view of the state of the Group’s affairs as
at 31 December 2019 and of its loss for the year then ended;

• have been properly prepared in accordance with IFRSs

as adopted by the EU; and

• have been prepared in accordance with the requirements

of Companies (Jersey) Law 1991.

Basis for opinion

We conducted our audit in accordance with International
Standards on Auditing (UK) (“ISAs (UK)”) and applicable law. Our
responsibilities under those standards are further described in the
Auditor’s responsibilities for the audit of the financial statements
section of our report. We are independent of the Group and the
Parent Company in accordance with the ethical requirements that
are relevant to our audit of the financial statements in the UK,
including the FRC’s Ethical Standard as applied to listed entities,
and we have fulfilled our other ethical responsibilities in accordance
with these requirements. We believe that the audit evidence we
have obtained is sufficient and appropriate to provide a basis for
our opinion.

Conclusions relating to going concern

We have nothing to report in respect of the following matters in
relation to which the ISAs (UK) require us to report to you where:

• the Directors’ use of the going concern basis of accounting in the

preparation of the financial statements is not appropriate; or

• the Directors have not disclosed in the financial statements any
identified material uncertainties that may cast significant doubt
about the Group or the Parent Company’s ability to continue to
adopt the going concern basis of accounting for a period of at
least twelve months from the date when the financial statements
are authorised for issue.

Overview of our audit approach

Key audit matters

• Revenue recognition.

• Capitalisation of development costs.

• Carrying value of development costs.

• Going concern assessment.

• We performed an audit of the complete financial information

of three components and audit procedures on specific balances
for a further two components.

• The components where we performed full or specific audit

procedures accounted for 98% of Group loss before tax, 100%
of revenue and 98% of Group total assets.

Materiality

• Overall Group materiality of $375,000, which represents 2%

of loss before tax.

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) that we identified including those which had the greatest
effect on: the overall audit strategy, the allocation of resources in
the audit, and directing the efforts of the engagement team. These
matters were addressed in the context of our audit of the financial
statements as a whole, and in our opinion thereon, and we do not
provide a separate opinion on these matters.

Revenue recognition

The Group has reported revenues of $16.2m (FY18: $17.0m) with
deferred revenue at 31 December 2019 of $3.8m (FY18: $4.3m).
The Group’s contracts with customers can involve multiple deliverables.
Therefore, revenue recognition related to each deliverable requires
judgement over the assessment of the separate contract deliverables.
We assessed revenue recognition as a fraud risk as revenue forms
the basis for certain of the Group’s key performance indicators,
both in external communications and for management incentives.
We identified two specific risks of fraud and error in respect of
inappropriate revenue recognition given the nature of the Group’s
contracts with customers as follows:

• the recognition of revenue in the appropriate period, including

the deferral, or accrual, of revenue, i.e. cut-off; and

• inappropriate measurement of revenue attributed to each

deliverable within a contract with a customer.

Revenue recognition is disclosed in Note 8 of the consolidated
financial statements and relevant accounting policies in Note 29.

How we addressed the key audit matter in the audit

• We evaluated management’s determination of whether the nature
of the Group’s products results in the provision of a deliverable at
a point in time or over a contractual term. This included the
assessment of new or one-off transactions.

• For a sample of customers, we tested all revenue transactions in

FY2019 with the customers to (1) ensure a proper identification of
deliverables; (2) proper and consistent allocation of the contract
price to the performance obligations satisfied over time and at a
point in time; (3) for deliverables, for which revenue is earned
over time, accurate calculation of the revenue and deferred revenue
based on the progress of the contract; (4) consistent application
of the revenue recognition policy; and (5) appropriate period of
revenue recognition with reference to contractual documents.

WANDISCO PLC AN NUAL REPORT AND ACCOUNTS 2019

Financial statementsINDEPENDENT AUDITOR’S REPORT CONTINUED
TO THE MEMBERS OF WANDISCO PLC

Key audit matters continued

Revenue recognition continued

How we addressed the key audit matter in the audit continued

• We performed a search for revenue recorded through journal
entries and tested for any unusual entries, or entries that were
posted outside of normal business processes. We investigated
any unusual items to establish whether any sale had occurred
in the financial year to support the revenue recognised.

• We performed certain specific procedures to address the risk of
management override, which included testing of unusual, new
or significant transactions or contractual terms. We obtained
management’s analysis for a sample of contracts and assessed
the Group’s estimate of the fair value attributed to each identified
performance obligation within each sampled contract and the
timing of revenue recognition for each deliverable.

• We also considered the adequacy of the Group’s disclosures

relating to revenue recognition in Notes 8 and 29.

Key observations

Based on procedures performed, we did not identify any evidence
of material misstatement in the revenue recognised in the year.

Capitalisation of development costs

The Group capitalises internal costs in respect of development
projects amounting $5.1m (FY18: $4.9m). The Directors apply
judgement in the classification of expenditure as capital in nature
rather than ongoing operational expenditure. The significant
judgement and related risk is that:

Key observations

Based on procedures performed, we noted the costs capitalised
by management were in line with the requirements of IAS 38.

Carrying value of development costs

The Group continues to be loss making and, as a result, the Group
has tested previously capitalised development costs for impairment.
There remains a degree of uncertainty around expected revenues
and profits will be realised and be sufficient to ensure recoverability
of the assets recognised on the balance sheet.

The impairment test of intangible assets including key assumptions
and underlying recoverable amounts is disclosed in Note 17 of the
consolidated financial statements.

How we addressed the key audit matter in the audit

• With assistance from a BDO valuation specialist, we performed
audit procedures on the reasonableness of the growth rates,
margin and discount rate applied including comparison to
economic and industry forecasts where appropriate.

• We assessed the appropriateness of the key assumptions used

in the FY20 forecast including new customer acquisition, upsell/
add-ons and level of loss of customers by assessing these against
the results achieved in FY19.

• We performed a sensitivity analysis of management’s model in

respect of the key assumptions such as discount rate and growth
rates to ensure there was sufficient headroom in their calculation.

• We considered the appropriateness of the related disclosures

provided in Note 17 in the Group financial statements.

• Internal costs are capitalised that should be expensed under

Key observations

the requirements of IAS 38 “Intangible Assets”.

Capitalised development costs is disclosed in Note 17 of the
consolidated financial statements and relevant accounting policies
in Note 29.

Based on procedures performed, we did not note any issues
with the recoverability of the intangible assets recognised on the
balance sheet and concluded that management’s judgements
and disclosures were appropriate.

How we addressed the key audit matter in the audit

Going concern assessment

• We assessed the nature of the sampled items capitalised and

evaluated the appropriateness of their classification as capitalised
costs, having regard to IAS 38 requirements. This included assessing
whether major projects are technically feasible and commercially
viable by reference to existing orders and future forecasts given
the core technology.

• We agreed the existence of a sample of employees to contracts
including verifying their salary costs and identifying roles and
responsibilities to determine if the portion of costs capitalised
reflects the work performed on the systems.

• We considered the appropriateness of the related disclosures

provided in Note 17 in the Group financial statements.

The Group has continued to make losses in the financial year, and
the net liabilities and deficit financial position at year end indicate
that there is an elevated risk associated with the Group’s going
concern status.

The financial statements explain in Note 2(b) how the Directors
have formed a judgement that it is appropriate to adopt the going
concern basis of preparation for the Group.

That judgement is based on an evaluation of the inherent risks
to the Group’s business model and how those risks might affect
the Group’s financial resources or ability to continue operations
over a period of at least a year from the date of approval of the
financial statements.

WANDISCO PLC

AN NUAL REPORT AND ACCOUNTS 2019

Key audit matters continued

Performance materiality

Performance materiality is the application of materiality at the
individual account or balance level set at an amount to reduce
to an appropriately low level the probability that the aggregate
of uncorrected and undetected misstatements exceeds materiality
for the financial statements as a whole.

On the basis of our risk assessments, together with our assessment
of the Group’s overall control environment, our judgement was
that performance materiality should be set at 65% of Group
materiality, being $244,000.

Performance materiality applied to the audits of the three
significant components was in the range of $85,000 to $217,000.

Reporting threshold

We agreed with the Audit Committee that we would report to
the Committee all individual audit differences identified during the
course of our audit in excess of $19,000. We also agreed to report
differences below these thresholds that, in our view, warranted
reporting on qualitative grounds.

An overview of the scope of our audit

Our assessment of audit risk, our evaluation of materiality and our
allocation of performance materiality determine our audit scope
for each entity within the Group. Taken together, this enables us to
form an opinion on the consolidated financial statements. We take
into account size, risk profile, the organisation of the Group and
effectiveness of Group-wide controls and changes in the business
environment when assessing the level of work to be performed at
each entity.

The work on all five components was performed by the Group team.

Of the Group’s five reporting components, we subjected three
significant components to full scope audits for Group purposes. For
the residual two components, we performed audit procedures on
specific accounts within that component that we considered had
the potential for the greatest impact on the significant accounts
in the financial statements either because of the size of these
accounts or their risk profile.

The coverage obtained from the work performed by us was 98% of
Group loss before tax, 100% of Group revenue and 98% of Group
total assets.

Going concern assessment continued

The risks most likely to adversely affect the Group’s available
financial resources over this period were:

• meeting Board forecasts particularly relating to the timing

and value of future, unsecured pipeline sales; and

• the achievability of mitigating actions the Directors would
take should these, or other, adverse factors materialise.

The risk for our audit was whether or not those risks were such
that they amounted to a material uncertainty that may have cast
significant doubt about the ability to continue as a going concern.

How we addressed the key audit matter in the audit

• We evaluated the key underlying assumptions used in the Group’s
forecasts around the achievement of forecast revenue through
robust interrogation of the forecasts and understanding how
these were derived.

• We considered the Group’s historical budgeting accuracy, by

assessing actual performance against budget and understanding
the changes in circumstances leading to the forecast revenue.

• We performed analysis of changes in key assumptions including
a reasonable possible (but not unrealistic) reduction in forecast
revenue to understand the sensitivity in the cash flow forecasts.

• We considered the appropriateness of the related disclosures
by comparing to the key assumptions and key sensitivities as
considered by the Directors in their forecasts.

Our application of materiality

Materiality

We apply the concept of materiality in planning and performing
the audit, in evaluating the effect of identified misstatements
on the audit and in forming our audit opinion.

We consider materiality to be the magnitude by which misstatements,
including omissions, could influence the economic decisions of
reasonable users that are taken on the basis of the financial statements.
Importantly, misstatements below these levels will not necessarily
be evaluated as immaterial as we also take account of the nature of
identified misstatements, and the particular circumstances of their
occurrence, when evaluating their effect on the financial
statements as a whole.

Materiality for the Group financial statements was set at $375,000,
determined with reference to a benchmark of the three year
average of loss before tax of $18.7m (of which it represents 2%).
A 2% benchmark was considered appropriate, as this was the first
year of audit for BDO and with the Group being AIM listed.

Materiality allocated to the three significant components was
in the range of $132,000 to $335,000.

WANDISCO PLC AN NUAL REPORT AND ACCOUNTS 2019

Financial statementsAuditor’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: https://www.frc.org.uk/auditorsresponsibilities.
This description forms part of our Auditor’s report.

Use of our report

This report is made solely to the Parent Company’s members, as
a body, in accordance with Article 113A of the Companies (Jersey)
Law 1991. Our audit work has been undertaken so that we might
state to the Parent Company’s members those matters we are
required to state to them in an auditor’s report and for no other
purpose. To the fullest extent permitted by law, we do not accept
or assume responsibility to anyone other than the Parent Company
and the Parent Company’s members as a body, for our audit work,
for this report, or for the opinions we have formed.

David Butcher
For and on behalf of BDO LLP
Chartered Accountants
London, UK
29 June 2020

BDO LLP is a limited liability partnership registered in England and Wales
(with registered number OC305127).

INDEPENDENT AUDITOR’S REPORT CONTINUED
TO THE MEMBERS OF WANDISCO PLC

Other information

The Directors are responsible for the other information. The other
information comprises the information included in the Annual
Report and Accounts, 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.

Matters on which we are required to report by exception

We have nothing to report in respect of the following matters
where the Companies (Jersey) Law 1991 requires us to report
to you if, in our opinion:

• proper accounting records have not been kept by Parent Company,
or proper returns adequate for our audit have not been received
from branches not visited by us; or

• the Parent Company financial statements are not in agreement

with the accounting records and returns; or

• we have not received all the information and explanations we

require for our audit.

Responsibilities of Directors

As explained more fully in the Statement of Directors’ responsibilities,
the Directors are responsible for the preparation of the financial
statements and for being satisfied that they give a true and fair view
and for such internal control as the Directors determine is necessary
to enable the preparation of financial statements that are free from
material misstatement, whether due to fraud or error.

In preparing the financial statements, the Directors are responsible
for assessing the Group’s or the Parent Company’s ability to continue
as a going concern, disclosing, as applicable, matters related to
going concern and using the going concern basis of accounting
unless the Directors either intend to liquidate the Group or the
Parent Company or to cease operations, or have no realistic
alternative but to do so.

WANDISCO PLC

AN NUAL REPORT AND ACCOUNTS 2019

CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2019

Year ended 31 December 2019

As restated
Year ended 31 December 2018

Continuing operations

Revenue

Cost of sales

Gross profit

Operating expenses

Operating loss

Finance income

Finance costs

Net finance income/(costs)

(Loss)/profit before tax

Income tax

(Loss)/profit for the year

Other comprehensive income

Items that are or may be reclassified subsequently
to profit or loss:

Foreign operations – foreign currency
translation differences

Pre-
exceptional
$’000

Exceptional
items ¹
$’000

Pre-
exceptional
$’000

Exceptional
items ¹
$’000

9,11

(42,148)

16,155

(1,186)

14,969

(27,179)

604

(527)

Note

7,8

Total
$’000

16,155

(1,186)

17,019

(1,544)

14,969

15,475

(42,148)

(38,712)

(27,179)

(23,237)

Total
$’000

17,019

(1,544)

15,475

(38,712)

(23,237)

—

604

(2,047)

(2,574)

443

(514)

2,793

—

3,236

(514)

(2,047)

(1,970)

(71)

2,793

2,722

(27,102)

(2,047)

(29,149)

(23,308)

2,793

(20,515)

885

—

885

802

—

802

(26,217)

(2,047)

(28,264)

(22,506)

2,793

(19,713)

(282)

2,047

1,765

(81)

(2,793)

(2,874)

Other comprehensive income for the year, net of tax

(282)

2,047

1,765

(81)

(2,793)

(2,874)

Total comprehensive income for the year

(26,499)

—

(26,499)

(22,587)

—

(22,587)

Loss per share

Basic and diluted loss per share

Adjusted earnings before interest, tax, depreciation
and amortisation (“Adjusted EBITDA”)

1 See Note 10.

The notes on pages 55 to 87 are an integral part of these consolidated financial statements.

($0.63)

(11,670)

($0.47)

(9,397)

WANDISCO PLC AN NUAL REPORT AND ACCOUNTS 2019

Financial statementsCONSOLIDATED STATEMENT OF FINANCIAL POSITION
AT 31 DECEMBER 2019

Assets

Property, plant and equipment

Intangible assets

Other non-current assets

Non-current assets

Trade and other receivables

Cash and cash equivalents

Current assets

Total assets

Equity

Share capital

Share premium

Translation reserve

Merger reserve

Retained earnings

Total equity

Liabilities

Loans and borrowings

Deferred income

Deferred tax liabilities

Non-current liabilities

Current tax liabilities

Loans and borrowings

Trade and other payables

Deferred income

Current liabilities

Total liabilities

Total equity and liabilities

31 December
2019
$’000

31 December
2018
$’000

Note

3,735

4,877

3,016

828

5,516

2,580

11,628

8,924

8,545

23,354

7,399

10,757

31,899

18,156

43,527

27,080

21(a)

7,097

6,361

149,336

115,909

21(c)

(5,583)

(7,348)

1,247

(121,922)

(102,365)

30,175

13,804

2,889

1,188

1,277

4,081

1,378

2,212

4,371

2,622

3,990

4,860

3,041

9,271

11,898

13,352

13,276

43,527

27,080

The notes on pages 55 to 87 are an integral part of these consolidated financial statements.

The financial statements on pages 51 to 87 were approved by the Board of Directors on 29 June 2020 and signed on its behalf by:

David Richards
Chairman and CEO

Erik Miller

Chief Financial Officer

Company registered number: 110497

WANDISCO PLC

AN NUAL REPORT AND ACCOUNTS 2019

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2019

Balance at 31 December 2017

Adjustment on application of IFRS 15

6,156

115,196

(4,474)

1,247

(100,658)

—

11,029

Attributable to owners of the Company

Share
capital
$’000

Share
premium
$’000

Translation
reserve
$’000

Merger
reserve
$’000

Retained
earnings
$’000

Note

Total
equity
$’000

17,467

11,029

Adjusted balance at 1 January 2018

6,156

115,196

(4,474)

1,247

(89,629)

28,496

Total comprehensive income for the year

Loss for the year

Other comprehensive income for the year

Total comprehensive income for the year

Transactions with owners of the Company

Contributions and distributions

Equity-settled share-based payment

15(e)

Share options exercised

Total transactions with owners of the Company

—

205

—

713

—

(2,874)

—

(19,713)

—

(2,874)

(19,713)

(22,587)

6,977

—

6,977

918

6,977

7,895

Balance at 31 December 2018 – as restated

6,361

115,909

(7,348)

1,247

(102,365)

13,804

Total comprehensive income for the year

Loss for the year

Other comprehensive income for the year

Total comprehensive income for the year

Transactions with owners of the Company

Contributions and distributions

Equity-settled share-based payment

15(e)

Proceeds from share placing

Share options exercised

—

706

—

33,085

342

Total transactions with owners of the Company

736

33,427

—

1,765

—

(28,264)

—

1,765

(28,264)

(26,499)

8,707

—

8,707

33,791

372

8,707

42,870

Balance at 31 December 2019

7,097

149,336

(5,583)

1,247

(121,922)

30,175

The notes on pages 55 to 87 are an integral part of these consolidated financial statements.

WANDISCO PLC AN NUAL REPORT AND ACCOUNTS 2019

Financial statementsCONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2019

Cash flows from operating activities

Loss for the year

Adjustments for:

– Depreciation of property, plant and equipment

– Amortisation of intangible assets

– Loss on sale of property, plant and equipment

– Net finance (income)/costs

– Income tax

– Foreign exchange

– Equity-settled share-based payment

Changes in:

– Trade and other receivables

– Trade and other payables

– Deferred income

– Deferred government grant

Net working capital change

Cash used in operating activities

Interest paid

Income tax received

Net cash used in operating activities

Cash flows from investing activities

Interest received

Proceeds from sale of property, plant and equipment

Acquisition of property, plant and equipment

Development expenditure

Net cash used in investing activities

Cash flows from financing activities

Proceeds from issue of share capital

Net repayment of bank loan

Payment of lease liabilities (2018: Payment of finance lease liabilities)

Net cash from financing activities

Net increase/(decrease) in cash and cash equivalents

Cash and cash equivalents at 1 January

Effect of movements in exchange rates on cash held

Note

2019
$’000

As
restated
2018
$’000

15(e)

(28,264)

(19,713)

1,101

5,701

—

(77)

(885)

1,869

8,707

388

6,475

(802)

(2,517)

6,977

(11,848)

(9,118)

(1,203)

(562)

(508)

—

281

(925)

(1,230)

(2)

(2,273)

(1,876)

(14,121)

(10,994)

(446)

807

(399)

(13,760)

(11,342)

258

—

(841)

213

(677)

(5,062)

(4,910)

(5,645)

(5,369)

22(c)

34,163

(1,667)

(502)

31,994

918

(111)

(95)

712

12,589

(15,999)

10,757

27,396

(640)

Cash and cash equivalents at 31 December

23,354

10,757

The notes on pages 55 to 87 are an integral part of these consolidated financial statements.

WANDISCO PLC

AN NUAL REPORT AND ACCOUNTS 2019

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019

1. Reporting entity

WANdisco plc (“the Company”) is a public limited company incorporated and domiciled in Jersey. The Company’s ordinary shares are
traded on AIM. The Company’s registered office is 47 Esplanade, St. Helier, Jersey JE1 0BD. These consolidated financial statements
comprise the Company and its subsidiaries (together referred to as the “Group”). The Group is primarily involved in the development
and provision of global collaboration software (see Note 7).

2. Basis of accounting

These consolidated financial statements have been prepared in accordance with International Financial Reporting Standards (“IFRSs”)
as adopted by the EU. They were authorised for issue by the Company’s Board of Directors on 29 June 2020.

Under Article 105(11) of the Companies (Jersey) Law 1991, a parent company preparing consolidated financial statements need not
present solus (parent company only) financial information, unless required to do so by an ordinary resolution of the Company’s members.

(a) Accounting policies

Details of the Group’s accounting policies are included in Note 29.

This is the first set of the Group’s annual financial statements in which IFRS 16 “Leases” has been applied. Changes to the significant
accounting policies are described in Note 5.

(b) Going concern basis of accounting

The consolidated financial statements have been prepared on a going concern basis, which assumes that the Group will be able to meet
the mandatory repayment terms of the banking facilities as disclosed in Note 25.

As at 31 December 2019 the Group had net assets of $30.2m (31 December 2018: $13.8m), including cash of $23.4m (2018: $10.8m) as set
out in the Consolidated statement of financial position, with a debt facility fully drawn of $2.2m (2018: debt facility fully drawn of $3.9m).
In the year ended 31 December 2019, the Group incurred a loss before tax of $29.1m (2018: $20.5m) and net cash outflows before
financing of $19.4m (2018: $16.7m).

During 2019, the performance of the Group declined, with revenue reducing by 5% to $16.2m (2018: $17.0m) and operating loss
increasing to $27.2m (2018: $23.2m).

The Directors have prepared a detailed budget and forecast of the Group’s expected performance over a period covering at least the next
twelve months from the date of the approval of these financial statements. As well as modelling the realisation of the sales pipeline, these
forecasts also cover a number of scenarios and sensitivities in order for the Board to satisfy itself that the Group remains within its current
cash facilities, details of which are included in Note 22. The cash flow model includes the injection of $25m of cash which was raised
following the year end on 29 June 2020, as detailed in Note 31.

Whilst the Directors are confident in the Group’s ability to grow revenue, the Board’s sensitivity modelling (which considered the impact
of Brexit and COVID-19) shows that the Group can remain within its facilities in the event that revenue growth is delayed (i.e. revenue does
not increase from the level reported in 2019) for a period in excess of twelve months. The Directors’ financial forecasts and operational
planning and modelling also include the actions, under the control of the Group, that they could take to further significantly reduce the
cost base during the coming year in the event that longer-term revenue were set to remain consistent with the level reported in 2019. On
the basis of this financial and operational modelling, the Directors believe that the Group has the capability and the operational agility to
react quickly, cut further costs from the business and ensure that the cost base of the business is aligned with its revenue and funding scale.

As a consequence, the Directors have a reasonable expectation that the Group can continue to operate and to operate within its existing
facilities and be able to meet its commitments and discharge its liabilities in the normal course of business for a period not less than
twelve months from the date of approval of these financial statements. Accordingly, they continue to adopt the going concern basis
in preparing the Group financial statements.

3. Functional and presentational currency

See accounting policy in Note 29(b).

The consolidated financial statements are presented in US dollars, as the revenue for the Group is predominantly derived in this currency.
Billings to the Group’s customers during the year by WANdisco, Inc. were all in US dollars with certain costs being incurred by WANdisco
International Limited in sterling and WANdisco, Pty Ltd in Australian dollars. All financial information has been rounded to the nearest
thousand US dollars unless otherwise stated.

WANDISCO PLC AN NUAL REPORT AND ACCOUNTS 2019

Financial statementsNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
FOR THE YEAR ENDED 31 DECEMBER 2019

4. Use of judgements and estimates

See accounting policy in Note 29(c).

In preparing these consolidated financial statements, management has made judgements and estimates that affect the application of the
Group’s accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates.

Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to estimates are recognised prospectively.

(a) Judgements

Information about judgements made in applying accounting policies that have the most significant effect on the amounts recognised
in the financial statements is included in the following notes:

• Note 8 – revenue recognition.

• Note 13 – deferred tax asset.

• Note 17 – development costs.

(b) Assumptions and estimation uncertainties

Information about assumptions and estimation uncertainties at 31 December 2019 that have a significant risk of resulting in a material
adjustment to the carrying amounts of assets and liabilities in the next financial year is included in the following notes:

• Note 8 – revenue recognition: allocation of value to maintenance and support element of subscription arrangements.

• Note 17 – impairment test of intangible assets: key assumptions underlying recoverable amounts, including the recoverability

of development costs.

A number of the Group’s accounting policies and disclosures require the measurement of fair values, for both financial and non-financial
assets and liabilities.

Further information about the assumptions made in measuring fair values is included in the following note:

• Note 15 – share-based payment.

5. Changes in significant accounting policies – IFRS 16 “Leases”

Except for the changes below, the Group has consistently applied the accounting policies to all periods presented in these consolidated
financial statements.

The Group applied IFRS 16 with a date of initial application of 1 January 2019. As a result, the Group has changed its accounting policy
for lease contracts as detailed below.

The Group applied IFRS 16 using the modified retrospective approach, under which the cumulative effect of initial application is
recognised in retained earnings at 1 January 2019. As a result, the comparative information has not been restated and continues to be
reported under IAS 17 and IFRIC 4.

The details of the changes in accounting policies are disclosed below. For further details see accounting policy in Note 29(q).

(a) Definition of a lease

Previously, the Group determined at contract inception whether an arrangement is or contains a lease under IFRIC 4. Under IFRS 16,
the Group assesses whether a contract is or contains a lease based on the definition of a lease.

On the transition to IFRS 16, the Group elected to apply the practical expedient to grandfather the assessment of which transactions
are leases. It applied IFRS 16 only to contracts that were previously identified as leases. Contracts that were not identified as leases under
IAS 17 and IFRIC 4 were not reassessed for whether there is a lease. Therefore, the definition of a lease under IFRS 16 was applied only
to contracts entered into or changed on or after 1 January 2019.

(b) As a lessee

As a lessee, the Group previously classified leases as operating or finance leases based on its assessment of whether the lease transferred
significantly all of the risks and rewards incidental to ownership of the underlying assets to the Group. Under IFRS 16, the Group
recognises right of use assets and lease liabilities for most leases – i.e. these leases are on balance sheet.

WANDISCO PLC

AN NUAL REPORT AND ACCOUNTS 2019

5. Changes in significant accounting policies – IFRS 16 “Leases” continued

(b) As a lessee continued

(i) Leases classified as operating leases under IAS 17

At transition, lease liabilities were measured at the present value of the remaining lease payments, discounted at the Group’s incremental
borrowing rate as at 1 January 2019. Right of use assets are measured at an amount equal to the lease liability, adjusted by the amount
of any prepaid or accrued lease payments.

The Group used the following practical expedients when applying IFRS 16 to leases previously classified as an operating lease under IAS 17:

• applied the exemption not to recognise right of use assets and liabilities for leases with less than twelve months of lease term; and

• applied the exemption not to recognise right of use assets and liabilities for leases of low-value items.

(ii) Leases previously classified as finance leases

For leases that were classified as finance leases under IAS 17, the carrying amount of the right of use asset and the lease liability at
1 January 2019 are determined at the carrying amount of the lease asset and lease liability under IAS 17 immediately before that date.

(iii) Disclosures

Disclosure of the interest expense on lease liabilities is included in Note 12 – Net finance (costs)/income.

Disclosure of movements in right of use assets and depreciation are included in Note 16 – Property, plant and equipment.

Disclosure of the lease liabilities are included in Note 22 – Loans and borrowings.

The effect of initially applying this standard is as follows:

(I) recognition of a right of use asset and depreciation of this asset;

(II) removal of rent prepayment/accrual and charge to statement of profit or loss; and

(III) recognition of lease liability non-current and current and interest on this liability.

The following table summarises the impact of transition to IFRS 16 on retained earnings at 1 January 2019.

Retained earnings

Property, plant and equipment: right of use asset

Trade and other receivables: remove rent prepayment

Trade and other payables: remove rent accrual

Loans and borrowings – non-current: lease liability due in more than one year

Loans and borrowings – current: lease liability due in less than one year

Impact at 1 January 2019

Impact
of adopting
IFRS 16 at
1 January
2019
$’000

1,865

(41)

(1,491)

(390)

—

Note

5(c)(I)

5(c)(II)

5(c)(III)

The following tables summarise the impacts of adopting IFRS 16 on the Consolidated statement of profit or loss and other comprehensive
income for the year ended 31 December 2019 and the Consolidated statement of financial position for each of the line items affected.
There was no material impact on the Consolidated statement of cash flows for the year ended 31 December 2019.

WANDISCO PLC AN NUAL REPORT AND ACCOUNTS 2019

Financial statementsNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
FOR THE YEAR ENDED 31 DECEMBER 2019

5. Changes in significant accounting policies – IFRS 16 “Leases” continued

(d) Impact on the Consolidated statement of profit or loss and other comprehensive income

Continuing operations

Revenue

Cost of sales

Gross profit

Cash overheads

Year ended 31 December 2019

As reported
(IFRS 16)
$’000

Note

Adjustments
$’000

Amounts
without
adoption of
IFRS 16
$’000

As restated
Year ended
31 December
2018
Amounts
without
adoption of
IFRS 16
$’000

16,155

(1,186)

14,969

—

16,155

(1,186)

17,019

(1,544)

14,969

15,475

5(c)(II)

(31,701)

(632)

(32,333)

(29,782)

Adjusted EBITDA including development expenditure

Development expenditure capitalised

(16,732)

(632)

(17,364)

(14,307)

5,062

—

5,062

4,910

Adjusted EBITDA

Amortisation and depreciation

Equity-settled share-based payment

Operating loss

Net finance (costs)/income

(Loss)/profit before tax

Income tax

(Loss)/profit for the year

Other comprehensive income for the year, net of tax

(11,670)

(632)

(12,302)

5(c)(I)

5(c)(III)

(6,802)

(8,707)

(27,179)

(1,970)

(29,149)

885

(28,264)

1,765

573

—

(59)

201

142

—

142

—

(6,229)

(8,707)

(9,397)

(6,863)

(6,977)

(27,238)

(23,237)

(1,769)

2,722

(29,007)

(20,515)

885

802

(28,122)

(19,713)

1,765

(2,874)

Total comprehensive income for the year

(26,499)

142

(26,357)

(22,587)

(e) Impact on the Consolidated statement of financial position

Non-current assets

Current assets

Total assets

Total equity

Non-current liabilities

Current liabilities

Total liabilities

Total equity and liabilities

Note

5(c)(I)

5(c)(II)

31 December 2019

As reported
(IFRS 16)
$’000

Adjustments
$’000

31 December
2018
Amounts
without
adoption of
IFRS 16
$’000

Amounts
without
adoption of
IFRS 16
$’000

11,628

31,899

(2,591)

9,037

(48)

31,851

8,924

18,156

43,527

(2,639)

40,888

27,080

30,175

142

30,317

13,804

5(c)(III)

5(c)(II), 5(c)(III)

4,081

9,271

(2,334)

(447)

1,747

8,824

1,378

11,898

13,352

(2,781)

10,571

13,276

43,527

(2,639)

40,888

27,080

WANDISCO PLC

AN NUAL REPORT AND ACCOUNTS 2019

6. Alternative performance measures

The Group uses a number of alternative performance measures (“APMs”) which are non-IFRS measures to monitor the performance of
its operations. The Group believes these APMs provide useful historical financial information to help investors and other stakeholders
evaluate the performance of the business and are measures commonly used by certain investors for evaluating the performance of the
Group. In particular, the Group uses APMs which reflect the underlying performance on the basis that this provides a more relevant focus
on the core business performance of the Group and aligns with our KPIs. Adjusted results exclude certain items because if included, these
items could distort the understanding of our performance for the year and the comparability between periods. The Group has been using
the following APMs on a consistent basis and they are defined and reconciled as follows:

• Cash overheads: Operating expenses adjusted for: depreciation, amortisation, capitalisation of development expenditure and

equity-settled share-based payment. See Note 11 for a reconciliation.

• Adjusted EBITDA: Operating loss adjusted for: depreciation, amortisation and equity-settled share-based payment. See Note 11 for

a reconciliation.

7. Operating segments

See accounting policy in Note 29(e).

The Directors consider there to be one operating segment, being that of development and sale of licences for software and related
maintenance and support.

(a) Geographical segments

The Group recognises revenue in three geographical regions based on the location of customers, as set out in the following table:

Revenue

North America – USA

North America – other

Europe

Rest of the world – China

Rest of the world – South Africa

Rest of the world – other

2019
$’000

2018
$’000

6,551

13,864

2,152

5,036

2,088

284

236

1,785

821

—

313

16,155

17,019

Management makes no allocation of costs, assets or liabilities between these segments since all trading activities are operated as a single
business unit.

(b) Major products

The Group’s core patented technology, DConE, enables the replication of data. This core technology is contained in all the Group’s products.

Customer 1

Customer 2

Customer 3

Customer 4

Customer 5

No other single customers contributed 10% or more to the Group’s revenue (2018: nil).

2019
% of
revenue

19%

13%

11%

—

2019
$’000
revenue

3,117

2,088

1,857

—

2018
% of
revenue

2018
$’000
revenue

—

32%

15%

—

5,459

2,471

WANDISCO PLC AN NUAL REPORT AND ACCOUNTS 2019

Financial statementsNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
FOR THE YEAR ENDED 31 DECEMBER 2019

8. Revenue

See accounting policy in Note 29(d).

The Group generates revenue primarily from the sale of global collaboration software to its customers; see Note 7.

(a) Split of revenue by timing of revenue recognition

Revenue

Licences and services transferred at a point in time

Services transferred over time

2019
$’000

2018
$’000

12,596

3,559

13,472

3,547

16,155

17,019

(b) Contract balances

The following table provides information about receivables, contract assets and liabilities from contracts with customers.

Receivables, which are included in “Other non-current assets – accrued income”

Receivables, which are included in “Trade and other receivables – accrued income”

Contract liabilities, which are included in “Deferred income – non-current”

Contract liabilities, which are included in “Deferred income – current”

31 December 31 December
2018
$’000

2019
$’000

2,826

2,964

(1,188)

(2,622)

2,340

2,654

(1,277)

(3,041)

Revenue is measured based on the consideration specified in a contract with a customer. The Group recognises revenue when it transfers
control over a good or service to a customer.

Revenue is recognised either when the performance obligation in the contract has been performed (so “point in time” recognition)
or “over time” as control of the performance obligation is transferred to the customer.

9. Expenses

(a) Expenses by nature

Cost of sales

Staff costs

Development costs capitalised

Amortisation of development costs

Amortisation of other intangible assets

Depreciation of property, plant and equipment

Auditor’s remuneration

Other expenses

Operating expenses

Total cost of sales and operating expenses

Note

2019
$’000

As
restated
2018
$’000

9(b)

1,186

1,544

26,624

23,175

(5,062)

(4,910)

5,284

417

1,101

180

5,725

750

388

133

13,604

13,451

42,148

38,712

43,334

40,256

Included in staff costs above are $284,000 (2018: $245,000) relating to payments made to defined contribution plans.

WANDISCO PLC

AN NUAL REPORT AND ACCOUNTS 2019

9. Expenses continued

(b) Auditor’s remuneration

Audit of these financial statements

Amounts receivable by auditor in respect of:

Audit of financial statements of subsidiaries pursuant to legislation

10. Exceptional items

See accounting policy in Notes 29(b) and (i).

Exchange (loss)/gain on intercompany balances

2019
$’000

126

180

2018
$’000

133

2019
$’000

2018
$’000

(2,047)

2,793

The exceptional (loss)/gain arose on sterling-denominated intercompany balances. These balances were retranslated at the closing
exchange rate at 31 December 2019, which was 1.31, a 3% increase compared to the rate of 1.27 at 31 December 2018. Sterling to US
dollar exchange rates reduced during 2018 compared to 2017. Due to the size and nature of the exchange (loss)/gain in both years, it has
been included as an exceptional item. The exceptional (loss)/gain on intercompany balances in the Consolidated statement of profit or
loss is offset by an equivalent exceptional exchange gain/(loss) on the retranslation of the intercompany balances, which is included in
the retranslation of net assets of foreign operations, included in the other comprehensive income.

11. Adjusted EBITDA and cash overheads

Management has presented the performance measures “Adjusted EBITDA” and “Cash overheads” because it monitors these performance
measures at a consolidated level and it believes that these measures are relevant to an understanding of the Group’s financial performance.
Adjusted EBITDA and cash overheads are not defined performance measures in IFRS. The Group’s definition of adjusted EBITDA and cash
overheads may not be comparable with similarly titled performance measures and disclosures by other entities. As we implemented IFRS
16 there was a small reduction in operating expenses from the removal of $632,000 property rent and lease costs, which was offset by
$573,000 depreciation expense on the right of use assets.

(a) Reconciliation of operating loss to “Adjusted EBITDA”

Operating loss

Adjusted for:

Amortisation and depreciation

Equity-settled share-based payment

Adjusted EBITDA

Development expenditure capitalised

Adjusted EBITDA including development expenditure

(b) Reconciliation of operating expenses to “Cash overheads”

Operating expenses

Adjusted for:

Amortisation and depreciation

Equity-settled share-based payment

Development expenditure capitalised

Cash overheads

Note

2019
$’000

As
restated
2018
$’000

(27,179)

(23,237)

15(e)

6,802

8,707

(11,670)

(5,062)

6,863

6,977

(9,397)

(4,910)

(16,732)

(14,307)

As
restated
2018
$’000

2019
$’000

(42,148)

(38,712)

6,802

8,707

6,863

6,977

Note

9(a)

15(e)

(5,062)

(4,910)

(31,701)

(29,782)

WANDISCO PLC AN NUAL REPORT AND ACCOUNTS 2019

Financial statementsNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
FOR THE YEAR ENDED 31 DECEMBER 2019

12. Net finance (costs)/income

See accounting policy in Note 29(j).

Interest income on cash and cash equivalents

Interest income on non-current assets

Net foreign exchange gain

Finance income

Net foreign exchange loss

Interest payable on bank borrowings

Leases (interest portion) (2018: Interest on finance leases)

Finance charges

Loan amortisation costs

Finance costs

Net finance (costs)/income

13. Income tax

See accounting policy in Note 29(k).

(a) Amounts recognised in profit or loss

Current tax expense

Current year

Changes in estimates related to prior year

Income tax

(b) Reconciliation of effective tax rate

Loss before tax from continuing operations

Tax using the Company’s domestic tax rate

Effect of tax rates in foreign jurisdictions

Tax effect of:

Non-deductible expenses

Tax exempt (expenses)/income

R&D tax credits

Losses not recognised for current or deferred tax

Changes in estimates related to prior year

2019
$’000

258

346

—

2018
$’000

213

230

2,793

604

3,236

(2,047)

(237)

(209)

—

(81)

—

(321)

(15)

(63)

(115)

(2,574)

(514)

(1,970)

2,722

2019
$’000

2018
$’000

636

249

885

2018
%

21%

(1%)

445

357

802

As
restated
2018
$’000

20,515

4,308

(186)

2019
$’000

29,149

6,121

(61)

(1,476)

(7%)

(1,400)

(317)

351

517

223

2019
%

21%

(5%)

(1%)

(14%)

(3,982)

(15%)

(3,017)

249

885

357

802

Non-taxable (expenses)/income reflects the tax impact of the exceptional foreign exchange translation gain/(loss) included in loss before tax.

The changes in estimates related to prior year of $249k (2018: $357k) includes an additional amount now recognised in respect of research
and development tax credits relating to prior year of $249k (2018: $320k).

WANDISCO PLC

AN NUAL REPORT AND ACCOUNTS 2019

13. Income tax continued

Reductions in the UK corporation tax rate to 19% (effective from 1 April 2017) and to 17% (effective from 1 April 2020) were substantively
enacted on 6 September 2016. This will reduce the Group’s future current tax charge accordingly. The deferred taxation balance for UK
tax resident members of the Group at 31 December 2019 has been calculated based on the rate of 17% (2018: 17%).

In December 2017, numerous changes to the tax laws were enacted in the US, including a decrease in the corporate tax rate from 35%
to 21%. The deferred tax balance for US tax resident members of the Group at 31 December 2019 has been calculated based on the rate
of 21% (2018: 21%).

(d) Deferred tax assets and liabilities

Deferred tax liabilities are attributable to the following temporary differences in respect of property, plant and equipment:

Deferred tax liability

2019
$’000

(4)

2018
$’000

(3)

The Group has unrecognised deferred tax assets of $21,491,000 (2018: $16,239,000) in respect of tax losses arising in the Group.

The Directors consider that there is not enough certainty over the availability of future taxable profits against which these losses may
be offset and no asset has therefore been recognised.

14. Loss per share

(a) Basic loss per share

The calculation of basic loss per share has been based on the following loss attributable to ordinary shareholders and weighted average
number of ordinary shares outstanding:

Loss for the year attributable to ordinary shareholders

Weighted average number of ordinary shares

Issued ordinary shares at 1 January

Effect of shares issued in the year

Weighted average number of ordinary shares at 31 December

Basic loss per share

As
restated
2018
$’000

2019
$’000

28,264

19,713

2019
Number of
shares
’000

2018
Number of
shares
’000

42,523

40,904

2,608

828

45,131

41,732

As
restated
2018
$

0.47

2019
$

0.63

WANDISCO PLC AN NUAL REPORT AND ACCOUNTS 2019

Financial statementsNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
FOR THE YEAR ENDED 31 DECEMBER 2019

14. Loss per share continued

(b) Adjusted loss per share

Adjusted loss per share is calculated based on the loss attributable to ordinary shareholders before exceptional items, acquisition-related
items and the cost of equity-settled share-based payment, and the weighted average number of ordinary shares outstanding:

Loss for the year attributable to ordinary shareholders

Adjusted for:

Exceptional items

Equity-settled share-based payment

Adjusted loss for the year

Adjusted loss per share

As
restated
2018
$’000

2019
$’000

28,264

19,713

(2,047)

(8,707)

2,793

(6,977)

17,510

15,529

As
restated
2018
$

0.37

2019
$

0.39

Due to the Group having losses in all years presented, the fully diluted loss per share for disclosure purposes, as shown in the
Consolidated statement of profit or loss and other comprehensive income, is the same as for the basic loss per share.

15. Share-based payment

See accounting policy in Note 29(g)(ii).

(a) Prior year adjustment

The 2018 share-based payment charge has been adjusted to correct the accounting for options with graded vesting on grants awarded
prior to 1 January 2018. Previously, the share-based payment charge was recorded evenly over the vesting period of the respective options,
on a straight-line basis. The share-based payment charge now reflects the impact of the graded vesting conditions of the underlying options.

The impact of the prior year adjustment are:

• The 2018 share-based payment charge was increased by $1,120,000 to $6,977,000, resulting in an increase in both operating expenses

and operating loss by the same amount in the Consolidated statement of profit or loss and other comprehensive income.

• The Consolidated statement of changes in equity for 2018 also reflects the same increase in the share-based payment charge

by $1,120,000 to $6,977,000.

• Basic and diluted loss per share for 2018 was increased from $0.45 to $0.47.

• As a non-cash item, there is no impact on cash flow, retained earnings, net assets or KPIs.

(b) Description of share-based payment arrangements

The Group operates share option plans for employees of the Group. Options in the plans are settled in equity in the Company
and are normally subject to a vesting schedule but not conditional on any performance criteria being achieved.

WANDISCO PLC

AN NUAL REPORT AND ACCOUNTS 2019

15. Share-based payment continued

(b) Description of share-based payment arrangements continued

The terms and conditions of the share option grants between 14 September 2011 (the date WANdisco plc acquired WANdisco, Inc.)
and 31 December 2019 are as follows:

Date of grant

14 Sep 11
16 May 12
16 May 12
21 Jun 12
7 Dec 12
18 Aug 14
15 Sep 14
22 Dec 14
2 Jun 15
23 Jun 15
23 Oct 15
2 Nov 15
22 Jan 16
28 Jan 16
24 Mar 16
9 Mar 16
16 Sep 16
6 Dec 16
21 Jan 17
13 Mar 17
31 Mar 17
30 May 17
24 Oct 17
11 Sep 17
11 Sep 17
24 Oct 17
1 Nov 17
13 Mar 18
13 Mar 18
4 Apr 18
4 Apr 18
28 Sep 18
28 Sep 18
28 Sep 18
28 Sep 18
2 Oct 18
2 Oct 18
2 Oct 18
2 Oct 18
2 Oct 18
9 Nov 18
9 Nov 18
9 Nov 18
5 Dec 18
29 Apr 19
29 Apr 19
29 Apr 19
29 Apr 19
29 Apr 19
29 Apr 19
29 Apr 19
29 Apr 19
29 Apr 19
29 Apr 19
29 Apr 19
30 Apr 19
30 Apr 19
22 May 19
22 May 19
22 May 19
1 Aug 19
1 Aug 19
1 Aug 19
1 Aug 19

Expected
term
(years)

Exercisable between

Commencement

9
9
9
10
10
3
10
3
10
3
3
3
10
3
3
10
10
10
10
10
10
10
10
10
3
3
10
3
3
10
10
10
10
10
10
2
3
3
3
3
10
10
10
3
10
3
3
10
10
10
3
10
10
10
10
3
1
10
10
3
10
3
10
3

22 Jul 11
13 Jan 13
13 Jan 13
21 Jun 12
7 Dec 12
18 Aug 14
15 Sep 14
22 Dec 14
2 Jun 15
23 Jun 15
23 Oct 15
2 Nov 15
22 Jan 16
28 Jan 16
24 Mar 16
9 Mar 16
16 Sep 16
6 Dec 16
21 Jan 17
13 Mar 17
31 Mar 17
30 May 17
24 Oct 17
1 Jul 17
1 Jul 17
24 Oct 17
24 Oct 17
4 Jan 18
19 Feb 18
26 Feb 18
26 Mar 18
9 Apr 18
4 Jun 18
21 May 18
30 Jul 18
23 May 18
23 May 18
9 Jul 18
21 May 18
6 Aug 18
17 Sep 18
15 Oct 18
8 Nov 18
9 Nov 18
19 Nov 18
26 Nov 18
10 Dec 18
11 Dec 18
1 Jan 19
3 Jan 19
8 Jan 19
14 Jan 19
21 Feb 19
4 Mar 19
8 Apr 19
30 Apr 19
30 Apr 19
13 May 19
20 May 19
18 Apr 19
3 Jun 19
24 Jun 19
7 Jul 19
31 Jul 19

Lapse

14 Sep 21
12 Jan 22
30 Jan 22
20 Jun 22
7 Dec 22
17 Aug 24
14 Sep 24
21 Dec 24
1 Jun 25
22 Jun 25
22 Oct 25
1 Nov 25
21 Jan 26
27 Jan 26
23 Mar 26
8 Mar 26
15 Sep 26
5 Dec 26
20 Jan 27
10 Mar 27
28 Mar 27
27 May 27
21 Oct 27
8 Sep 27
8 Sep 27
21 Oct 27
29 Oct 27
12 Mar 28
12 Mar 28
3 Apr 28
3 Apr 28
27 Sep 28
27 Sep 28
27 Sep 28
27 Sep 28
1 Oct 28
1 Oct 28
1 Oct 28
1 Oct 28
1 Oct 28
8 Nov 28
8 Nov 28
8 Nov 28
8 Nov 28
28 Apr 29
28 Apr 29
28 Apr 29
28 Apr 29
28 Apr 29
28 Apr 29
28 Apr 29
28 Apr 29
28 Apr 29
28 Apr 29
28 Apr 29
29 Apr 29
29 Apr 29
21 May 29
21 May 29
21 May 29
31 Jul 29
31 Jul 29
31 Jul 29
31 Jul 29

Exercise
price

Vesting
schedule
(see page 66)

Outstanding at
31 December
2019

£0.36
£0.36
£0.23
£2.00
£4.55
£0.10
£4.00
£0.10
£2.55
£0.10
£0.10
£0.10
£0.75
£0.10
£0.10
£1.41
£2.00
£1.90
£3.90
£4.58
£4.24
£4.45
£8.20
£6.68
£0.10
£0.10
£8.39
£0.10
£0.10
£8.34
£8.34
£6.40
£6.40
£6.40
£6.40
£0.10
£0.10
£0.10
£0.10
£0.10
£3.60
£3.60
£3.60
£0.10
£5.10
£0.10
£0.10
£5.10
£5.10
£5.10
£0.10
£5.10
£5.10
£5.10
£5.10
£0.10
£0.10
£5.38
£5.38
£0.10
£5.95
£0.10
£5.95
£0.10

1
1
1
2
1
3
1
3
4
4
4
4
4
4
4
4
4
4
3
3
3
3
3
3
4
4
3
4
3
3
3
3
3
3
3
6
7
4
6
4
3
3
3
5
3
4
4
3
3
3
4
3
3
3
3
7
5
3
3
4
3
4
3
4

25,000
175,000
293,735
13,950
84,017
1,955
17,084
5,000
1,666
26,000
27,833
5,000
2,000
5,000
6,667
12,151
10,000
677,230
179,763
420,000
22,080
43,667
62,388
15,527
200,001
20,000
423,707
14,585
150,000
2,000
16,638
10,000
15,000
10,000
2,000
642,766
416,215
9,000
80,346
2,000
21,000
1,444
5,000
44,498
2,000
2,000
5,000
6,000
5,000
3,000
20,000
3,000
14,000
7,000
10,000
614,668
65,576
5,000
5,000
3,500
3,500
10,000
15,000
10,000

5,028,157

WANDISCO PLC AN NUAL REPORT AND ACCOUNTS 2019

Financial statementsNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
FOR THE YEAR ENDED 31 DECEMBER 2019

15. Share-based payment continued

(b) Description of share-based payment arrangements continued

The following vesting schedule applies:

1. 25% of option vests on exercisable commencement date; 1/48 of granted option shares vest monthly thereafter.

2. Option vests on third anniversary of the date of grant.

3. Option vests 33% on first anniversary of vesting commencement date, with the balance vesting monthly thereafter until final vesting date.

4. Option vests in three instalments: one-third on first anniversary of vesting commencement date, one-third on second anniversary

and one-third on third anniversary.

5. Option vests 100% on first anniversary of vesting commencement date.

6. Option vests in two instalments: 50% on the first anniversary of vesting commencement date and 50% on the second anniversary.

7. Option vests in two instalments: 30% on the second anniversary of vesting commencement date and 70% on the third anniversary.

The fair value of the employee share purchase plan has been measured using a Black-Scholes option pricing model.

The inputs used in the measurement of fair values at grant date of the equity-settled share-based payment plans were as follows:

Weighted average share price

Exercise price

Dividend yield

Risk-free interest rate

Expected volatility

Expected life (years)

Weighted average fair value of options granted during the year

2019

2018

$6.39

$0.78

0.73%

30%

$8.04

$0.65

0.80%

30%

1-3 years

$6.00

$7.88

• The dividend yield is based on the Company’s forecast dividend.

• The risk-free interest rate is based on the treasury bond rates for the expected life of the option.

• Expected volatility is based on the historical volatility of shares of listed companies with a similar profile to the Company.

• Expected life in years is determined from the average expected period to exercise.

WANDISCO PLC

AN NUAL REPORT AND ACCOUNTS 2019

15. Share-based payment continued

(d) Reconciliation of outstanding share options

The number and weighted average exercise prices of share options (including previous options in WANdisco, Inc.) under the share option
plans were as follows:

Outstanding at 1 January

Forfeited during the year

Exercised during the year

Granted during the year

Outstanding at 31 December

Exercisable at 31 December

Vested at the end of the year

Exercise price in the range:

From

Weighted average contractual life remaining

(e) Expense recognised in profit or loss

Total equity-settled share-based payment charge

Weighted
average
exercise
price
2019
$

2.80

1.77

1.57

0.78

Number of
options
2018

4,901,699

(269,824)

(1,619,062)

1,649,257

Number of
options
2019

4,662,070

(283,257)

(229,965)

879,309

5,028,157

2.57

4,662,070

2,983,106

3.41

1,823,334

2,983,106

3.41

1,823,334

2019
$

Weighted
average
exercise
price
2018
$

2.96

2.52

0.57

0.65

2.80

3.55

2018
$

0.13

10.65

0.13

10.65

2019
Years

7.4

2018
Years

8.1

As
restated
2018
$’000

2019
$’000

8,707

6,977

WANDISCO PLC AN NUAL REPORT AND ACCOUNTS 2019

Financial statementsNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
FOR THE YEAR ENDED 31 DECEMBER 2019

16. Property, plant and equipment

See accounting policy in Note 29(l) and (q).

(a) Reconciliation of carrying amount

Cost

Balance at 1 January 2018

Additions

Disposals

Effect of movements in exchange rates

Balance at 31 December 2018

Balance at 1 January 2019

Impact of change in accounting policy – IFRS 16

Adjusted balance at 1 January 2019

Additions

Disposals

Effect of movements in exchange rates

Balance at 31 December 2019

Accumulated depreciation

Balance at 1 January 2018

Depreciation

Disposals

Effect of movements in exchange rates

Balance at 31 December 2018

Balance at 1 January 2019

Depreciation

Disposals

Effect of movements in exchange rates

Right of use

Leasehold
assets improvements
$’000
$’000

Fixtures and
fittings
$’000

Computers
$’000

Total
$’000

—

1,865

1,301

—

3,169

—

(573)

—

(5)

169

(2)

—

206

—

206

417

—

625

(134)

(24)

—

289

(7)

—

327

—

327

—

1,164

1,622

593

(34)

(9)

677

(43)

(9)

1,714

2,247

1,714

—

1,714

407

(2)

2,247

1,865

4,112

2,142

(2)

349

2,139

6,282

(288)

(4)

—

(644)

(360)

—

(1,066)

(388)

—

(156)

(284)

(979)

(1,419)

(156)

(40)

—

(2)

(284)

(17)

—

(4)

(979)

(471)

(18)

(1,419)

(1,101)

(29)

Balance at 31 December 2019

(578)

(198)

(305)

(1,466)

(2,547)

Carrying amounts

At 31 December 2018

At 31 December 2019

(b) Right of use assets

Adjusted balance at 1 January 2019

Additions

Depreciation

Effect of movements in exchange rates

Balance at 31 December 2019

—

2,591

427

735

673

828

3,735

Property
$’000

Computers
$’000

1,846

1,300

(568)

(2)

2,576

(5)

—

Total
$’000

1,865

1,301

(573)

(2)

2,591

WANDISCO PLC

AN NUAL REPORT AND ACCOUNTS 2019

16. Property, plant and equipment continued

(b) Right of use assets continued

Property leases

The Group leases land and buildings for its office space. These leases run between three and ten years. Some leases include the option
to renew the lease for an additional period of the same duration after the end of the contract term. Options to renew are only included
in the term if it is reasonably certain that the option will be exercised.

Some leases provide for additional rent payments based on local price indices.

Other leases

The Group leases computer equipment, with lease terms of three to five years. For the low-value items, the Group has elected not to
recognise right of use assets and lease liabilities for these leases.

17. Intangible assets

See accounting policy in Notes 29(m) and (p).

(a) Reconciliation of carrying amount

Cost

Balance at 1 January 2018

Acquisitions – internally developed

Balance at 31 December 2018

Balance at 1 January 2019

Acquisitions – internally developed

Balance at 31 December 2019

Accumulated amortisation

Balance at 1 January 2018

Amortisation

Balance at 31 December 2018

Balance at 1 January 2019

Amortisation

Balance at 31 December 2019

Carrying amounts

At 31 December 2018

At 31 December 2019

(b) Amortisation

Other

intangible Development
costs
$’000

assets
$’000

Computer
software
$’000

Total
$’000

3,154

43,319

1,689

48,162

—

4,910

—

4,910

3,154

48,229

1,689

53,072

3,154

48,229

1,689

53,072

—

5,062

—

5,062

3,154

53,291

1,689

58,134

(3,154)

(37,405)

—

(5,725)

(522)

(750)

(41,081)

(6,475)

(3,154)

(43,130)

(1,272)

(47,556)

(3,154)

(43,130)

(1,272)

(47,556)

—

(5,284)

(417)

(5,701)

(3,154)

(48,414)

(1,689)

(53,257)

—

5,099

417

5,516

4,877

—

4,877

The amortisation charge on intangible assets is included in operating expenses in the Consolidated statement of profit or loss and other
comprehensive income.

WANDISCO PLC AN NUAL REPORT AND ACCOUNTS 2019

Financial statementsNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
FOR THE YEAR ENDED 31 DECEMBER 2019

17. Intangible assets continued

The carrying amount of the intangible assets is allocated across cash-generating units (“CGUs”). A CGU is defined as the smallest group
of assets that generate cash inflows from continuing use that are largely independent of the cash inflows of other assets or groups thereof.
The recoverable amount of the CGUs is determined using value in use (“VIU”) calculations. As at 31 December 2019 and 2018, the Group
had one CGU, the DConE CGU, which represents the Group’s patented DConE replication technology, forming the basis for all products
sold by the Group.

Other intangible assets arose as part of the acquisitions of OhmData, Inc. in June 2014 and AltoStor, Inc. in November 2012. The intangibles
arising as part of these acquisitions are allocated to the DConE CGU. The recoverable amount of the DConE CGU has been calculated on
a VIU basis at both 31 December 2019 and 31 December 2018. These calculations use cash flow projections based on financial forecasts,
which anticipate growth in the Group’s installed base along with new customer growth, resulting in an average revenue growth of 83%
over the five-year period with a 34% increase in cost base over the five-year period, and appropriate long-term growth rates. To prepare
VIU calculations, the cash flow forecasts are discounted back to present value using a pre-tax discount rate of 10% (2018: 10%) and a
terminal value growth rate of 2% (2018: 2%) from 2025. The Directors have reviewed the recoverable amount of the CGU and do not
consider there to be any indication of impairment.

A sensitivity analysis was performed for the DConE CGU and management concluded that no reasonably possible change in any
of the key assumptions would cause for the carrying value of the DConE CGU to exceed its recoverable amount.

(d) Development costs

Development costs are predominantly capitalised staff costs associated with new products and services. Development costs are allocated
to the DConE CGU, the recoverable amount of which has been determined on a VIU basis as described above.

18. Other non-current assets

Due in more than a year

Other receivables

Accrued income

19. Trade and other receivables

See accounting policy in Note 29(n).

Due within a year

Trade receivables

Other receivables

Accrued income

Corporation tax

Prepayments

Total trade and other receivables

2019
$’000

190

2,826

2018
$’000

240

2,340

3,016

2,580

2019
$’000

2,773

753

2,964

1,441

614

2018
$’000

1,810

1,059

2,654

1,304

572

8,545

7,399

Information about the Group’s exposure to credit and market risks, and impairment losses for trade receivables is included in Note 25(a)(ii)
and (iv).

20. Cash and cash equivalents

Bank balances

2019
$’000

2018
$’000

23,354

10,757

WANDISCO PLC

AN NUAL REPORT AND ACCOUNTS 2019

21. Equity

See accounting policy in Note 29(o).

(a) Share capital

Share capital

2019
Number

2019
$’000

2018
Number

2018
$’000

Allotted and fully paid – par value 10 pence

48,240,880

7,097

42,523,003

6,361

Authorised – par value 10 pence

100,000,000

The ordinary share capital of WANdisco plc is designated in sterling.

(b) Ordinary shares

During the year, 229,965 ordinary shares were issued because of employees exercising share options.

On 14 February 2019 the Group announced the subscription of 2,489,499 new ordinary shares of 10 pence each in the Company by
existing shareholders at a price of 546 pence (a premium of 9.2% on the closing share price on 13 February 2019) raising gross proceeds
of $17.5m. Transaction costs were $57,000.

On 25 November 2019 the Group announced the subscription of 2,998,413 new ordinary shares of 10 pence each in the Company
by existing shareholders at a price of 425 pence (a premium of 23.2% on the closing share price on 22 November 2019) raising gross
proceeds of $16.5m. Transaction costs were $108,000.

Following the year end on 12 June 2020 the Group announced a placing (which was approved by General Meeting on 29 June 2020) for
the subscription of 3,100,000 new ordinary shares of 10 pence each in the Company (comprising 2,362,515 placing shares and 737,485
direct subscription shares) at a price of 650 pence (a discount of 12.2% on the closing share price on 11 June 2020) raising gross proceeds
of approximately $25m.

Translation reserve

The translation reserve comprises all foreign exchange differences arising from the translation of the financial statements of foreign operations.

Merger reserve

The acquisition by WANdisco plc of the entire share capital of WANdisco, Inc. in 2012 was accounted for as a reverse acquisition.
Consequently, the previously recognised book values and assets and liabilities were retained and the consolidated financial information
for the period to 16 May 2012 has been presented as a continuation of the WANdisco business, which was previously wholly owned
by the WANdisco, Inc. Group.

The share capital for the period covered by these consolidated financial statements and the comparative periods is stated at the nominal
value of the shares issued pursuant to the above share arrangement. The difference between the nominal value of these shares and the
nominal value of WANdisco, Inc. shares at the time of the acquisition has been transferred to the merger reserve.

22. Loans and borrowings

See accounting policy in Notes 29(n) and (q).

Non-current liabilities

Secured bank loan

Lease liabilities (2018: Finance lease liabilities)

Current liabilities

Current portion of secured bank loan

Current portion of lease liabilities (2018: Finance lease liabilities)

Total loans and borrowings

2019
$’000

2018
$’000

555

2,334

2,889

—

1,667

545

3,889

101

2,212

3,990

5,101

4,088

Information about the Group’s exposure to interest rate, foreign currency and liquidity risks is included in Note 25.

WANDISCO PLC AN NUAL REPORT AND ACCOUNTS 2019

Financial statementsNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
FOR THE YEAR ENDED 31 DECEMBER 2019

22. Loans and borrowings continued

(a) Terms and repayment schedule

The terms and conditions of outstanding loans are as follows:

31 December 2019

31 December 2018

Borrowing

Currency

Nominal interest rate

Year of
maturity

Face value
$’000

Secured bank loan

US dollars US prime rate + 1.5%

2021

Lease liabilities
(2018: Finance lease liabilities)

Total interest bearing

US dollars

8% 3–10 years

Carrying
amount
$’000

2,222

2,879

Face value
$’000

4,217

210

Carrying
amount
$’000

3,889

199

2,318

3,590

5,908

5,101

4,427

4,088

At 31 December 2019, the $2.2m of bank loan (2018: $3.9m) represents term debt drawn down with Silicon Valley Bank. The facility
comprises $2.2m (2018: $3.9m) term debt, with an interest-only period to 31 May 2018, followed by a three-year maturity at a floating
interest rate charged at 1.5% above the US prime rate. The bank loan is secured over the assets of Wandisco, Inc.

In 2018, the secured bank loan contained a covenant stating that at the end of each quarter the Group’s EBITDA, defined in Note 6,
should be within a figure defined by the bank. The Group exceeded this figure in the fourth quarter of 2018. However, management
obtained a waiver from the bank on 29 March 2019 and the EBITDA covenant was removed in 2019.

(b) Lease liabilities

Maturity analysis – contractual undiscounted cash flows

Less than one year

Between one and five years

More than five years

Expenses relating to short-term leases recognised in profit or loss were $8,300.

Balance at 1 January 2019

Impact of change in accounting policy – IFRS 16

Adjusted balance at 1 January 2019

New lease liability

Repayment of borrowings

Payment of lease liabilities

Total changes from financing cash flows

Balance at 31 December 2019

2019
$’000

758

1,989

843

3,590

Lease
liabilities
$’000

199

1,881

2,080

1,301

2018
$’000

110

100

—

210

Bank
loan
$’000

3,889

—

3,889

—

(1,667)

(502)

—

(502)

(1,667)

2,879

2,222

WANDISCO PLC

AN NUAL REPORT AND ACCOUNTS 2019

23. Deferred income

See accounting policy in Note 29(d).

Deferred income which falls due:

Within a year

In more than a year

Total deferred income

Deferred income represents contracted sales for which services to customers will be provided in future years.

24. Trade and other payables

Trade payables

Accrued expenses

25. Financial instruments – fair values and risk management

See accounting policy in Notes 29(n) and (s).

(a) Financial risk management

The Group has exposure to the following risks arising from financial instruments:

• credit risk (see (a)(ii));

• liquidity risk (see (a)(iii));

• market risk (see (a)(iv));

• currency risk (see (a)(v)); and

• interest rate risk (see (a)(vi)).

(i) Risk management framework

2019
$’000

2,622

1,188

2018
$’000

3,041

1,277

3,810

4,318

2019
$’000

864

3,507

2018
$’000

1,330

3,530

4,371

4,860

The Group’s risk management policies are established to identify and analyse risks faced by the Group, to set appropriate risk limits and
controls and to monitor risks and adherence to limits. Risk management policies and systems are reviewed regularly to reflect changes
in market conditions and the Group’s activities.

The Group Audit Committee oversees how management monitors compliance with the Group’s risk management policies and procedures
and reviews the adequacy of the risk management framework in relation to the risks faced by the Group.

(ii) Credit risk

Credit risk is the risk of financial loss to the Group if a customer fails to meet its contractual obligations and arises principally
from the Group’s receivables from customers.

WANDISCO PLC AN NUAL REPORT AND ACCOUNTS 2019

Financial statementsNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
FOR THE YEAR ENDED 31 DECEMBER 2019

25. Financial instruments – fair values and risk management continued

(a) Financial risk management continued

(ii) Credit risk continued

Trade receivables

The carrying amounts of financial assets represent the maximum credit exposure and approximate to their fair value.

Ageing of trade receivables

Neither past due nor impaired

Past due but not impaired

Past due 1–30 days

Past due 31–90 days

Total not impaired trade receivables

2019
$’000

2018
$’000

2,547

1,478

226

—

255

2,773

1,810

There were no credit losses applied to trade receivables in 2019 or 2018 as they were all assessed as low risk. The Group assesses
expected credit loss for each individual customer considering their financial position, experience and other factors.

All trade receivables are denominated in US dollars.

Cash and cash equivalents

The Group held cash and cash equivalents of $23.4m at 31 December 2019 (2018: $10.8m). The cash and cash equivalents are held with
banks which are rated P-1 for short-term obligations, based on Moody’s ratings.

(iii) Liquidity risk

Liquidity risk is the risk that the Group will encounter difficulty in meeting the obligations associated with its financial liabilities that are
settled by delivering cash or another financial asset. The Group’s approach to managing liquidity is to ensure, as far as possible, that it will
have enough liquidity to meet its liabilities when they are due, under both normal and stressed conditions, without incurring unacceptable
losses or risking damage to the Group’s reputation.

Exposure to liquidity risk

The following are the remaining contractual maturities of financial liabilities at the reporting date. The amounts are gross and
undiscounted and include contractual interest payments.

At 31 December 2019

Non-derivative financial liabilities

Secured bank loan

Lease liabilities

Trade payables

Contractual cash flows

Carrying
amount
$’000

Total
$’000

Less than
12 months
$’000

1–2 years
$’000

2–5 years
$’000

>5 years
$’000

2,222

2,879

4,371

2,318

3,590

4,371

1,755

758

4,371

563

709

—

1,280

—

9,472

10,279

6,884

1,272

1,280

—

843

—

843

The interest payments on variable interest rate loans in the table above reflect market forward interest rates at the reporting date and
these amounts may change as market interest rates change.

WANDISCO PLC

AN NUAL REPORT AND ACCOUNTS 2019

25. Financial instruments – fair values and risk management continued

(a) Financial risk management continued

(iv) Market risk

Market risk is the risk that changes in market prices – e.g. foreign exchange rates and interest rates – will affect the Group’s income or the
value of its holdings of financial instruments. The objective of market risk management is to manage and control market risk exposures
within acceptable parameters, whilst optimising the return.

The Group may be affected by general market trends, which are unrelated to the performance of the Group itself. The Group’s success
will depend on market acceptance of the Group’s products and there can be no guarantee that this acceptance will be forthcoming.
Market opportunities targeted by the Group may change and this could lead to an adverse effect upon its revenue and earnings.

(v) Currency risk

The Group is exposed to transactional foreign currency risk to the extent that there is a mismatch between the currencies in which sales,
purchases, receivables and borrowings are denominated and the respective functional currencies of Group companies. The functional
currencies of Group companies are primarily US dollars, sterling and Australian dollars.

The following table shows the denomination of the year-end cash and cash equivalents balance:

2019 cash and cash equivalents

2018 cash and cash equivalents

Euro
$’000

935

Sterling
$’000

1,177

—

185

Australian
dollar
$’000

US dollar
$’000

Total
$’000

21,195

23,354

10,554

10,757

Had the foreign exchange rate between the US dollar and sterling changed by 5%, this would have affected the loss for the year
and the net assets of the Group by $648,000 (2018: $631,000).

(vi) Interest rate risk

The Group is exposed to interest rate risk on its $2.2m debt drawing (2018: $3.9m), on which interest is charged at 1.5% above

the US prime rate.

(vii) Capital management

The Group defines the capital that it manages as its total equity. The Group’s objectives when managing capital are to safeguard
the Group’s ability to continue as a going concern and support the growth of the business.

26. List of subsidiaries

See accounting policy in Note 29(a).

Set out below is a list of the subsidiaries of the Group:

Company name

Country of
incorporation

Proportion
of shares

Holding

held Nature of business

WANdisco International Limited

UK Ordinary shares

100% Development and provision of global collaboration software

WANdisco, Inc.

OhmData, Inc.

AltoStor, Inc.

US Ordinary shares

100% Development and provision of global collaboration software

US Ordinary shares

100% Dormant

US Ordinary shares

100% Dormant

WANdisco, Pty Ltd

Australia Ordinary shares

100% Development and provision of global collaboration software

WANdisco Software (Chengdu) Ltd

China Ordinary shares

100% Development and provision of global collaboration software

All of the above entities are included in the consolidated financial statements.

WANDISCO PLC AN NUAL REPORT AND ACCOUNTS 2019

Financial statementsNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
FOR THE YEAR ENDED 31 DECEMBER 2019

27. Commitments and contingencies

At 31 December 2019 the Group had no capital commitments (31 December 2018: $nil).

The Group had no contingent liabilities at 31 December 2019 (31 December 2018: none).

28. Related parties

(a) Transactions with key management personnel

Key management personnel compensation comprised the following:

Short-term employee benefits

Equity-settled share-based payment

As
restated
2018
$’000

4,314

4,909

2019
$’000

4,842

6,144

10,986

9,223

Further details on the remuneration, share options and pension entitlements of the Directors are included in the Directors’ share options
and the Directors’ remuneration tables included in the Remuneration Committee report on page 43, which form part of these audited
financial statements.

29. Significant accounting policies

The Group has consistently applied the following accounting policies to all periods presented in these consolidated financial statements,
except if mentioned otherwise (see also Note 5).

(a) Basis of consolidation

(i) Business combinations

The Group accounts for business combinations using the acquisition method when control is transferred to the Group. The consideration
transferred in the acquisition is generally measured at fair value, as are the identifiable net assets acquired. Any goodwill that arises is tested
annually for impairment. Any gain on a bargain purchase is recognised in profit or loss immediately. Transaction costs are expensed as incurred,
except if related to the issue of debt or equity securities. Any contingent consideration is measured at fair value at the date of acquisition.

(ii) Subsidiaries

Subsidiaries are entities controlled by the Group. The Group “controls” an entity when it is exposed to, or has rights to, variable returns from its
involvement with the entity and has the ability to affect those returns through its power over the entity. The financial statements of subsidiaries

are included in the consolidated financial statements from the date on which control commences until the date on which control ceases.

(iii) Transactions eliminated on consolidation

Intra-group balances and transactions, and any unrealised income and expenses arising from intra-group transactions, are eliminated.

(b) Foreign currency

(i) Foreign currency transactions

Transactions in foreign currencies are translated into the respective functional currencies of Group companies at the exchange rates
at the dates of the transactions.

Monetary assets and liabilities denominated in foreign currencies are translated into the functional currency at the exchange rate at the
reporting date. Non-monetary assets and liabilities that are measured at fair value in foreign currency are translated into the functional
currency at the exchange rate when the fair value was determined. Non-monetary items that are measured based on historical cost in a
foreign currency are translated at the exchange rate at the date of the transaction. Foreign currency differences are generally recognised
in profit or loss and presented within finance costs.

(ii) Foreign operations

The assets and liabilities of foreign operations, including goodwill and fair value adjustments arising on acquisition, are translated into
US dollars at the exchange rates at the reporting date. The income and expenses of foreign operations are translated into US dollars at
an average rate for the year, where this approximates to the foreign exchange rates ruling at the dates the fair value was determined.

Foreign currency differences are recognised in other comprehensive income (“OCI”) and accumulated in the translation reserve.

WANDISCO PLC

AN NUAL REPORT AND ACCOUNTS 2019

29. Significant accounting policies continued

The preparation of financial information in conformity with adopted IFRS requires management to make judgements, estimates and
assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses.
Actual results may differ from these estimates.

Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period
in which the estimates are revised and in any future periods affected.

(i) Accounting estimates

The preparation of financial statements in conformity with adopted IFRSs 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 year. Although these estimates are based on management’s best knowledge of the amount, events or actions, actual
results ultimately may differ from those estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis. The estimates and associated assumptions are based on
historical experience and various other factors that are believed to be reasonable under the circumstances.

Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period, or in
the period of the revision and future periods if the revision affects both current and future periods. The Directors consider the following
to be the estimates applicable to the financial statements, which have a significant risk of resulting in a material adjustment to the carrying
amounts of assets and liabilities within the next financial year or in the long term:

Revenue

Key assumption: When allocating revenue between different performance obligations, the fair value of the various components
is required, which involves the use of estimates to establish the relative fair values. See Note 8.

(ii) Judgements

The Group applies judgement in how it applies its accounting policies, which do not involve estimation, but could materially affect the
numbers disclosed in these financial statements. The key accounting judgements, without estimation, that have been applied in these
financial statements are as follows:

Development costs

Capitalisation of development expenditure is completed only if development costs meet certain criteria. Full detail of the criteria
is in Note 29(m)(i).

• Alternative accounting judgement that could have been applied – not capitalising development costs.

• Effect of that alternative accounting judgement – reduction of $4,877,000 of assets’ carrying value.

Revenue

An additional area of judgement is the recognition and deferral of revenue in the situation when different performance obligations are bundled.
For example, the carve-out of the term licence in a subscription arrangement from the maintenance and support element. When products
are bundled together for the purpose of sale, the associated revenue, net of all applicable discounts, is allocated between the constituent
parts of the bundle on a relative fair value basis. The Group has a systematic basis for allocating relative fair values in these situations.

• Alternative accounting judgement that could have been applied – alternative methodology to allocate the fair values.

• Effect of that alternative accounting judgement – change in revenue figure and deferred income by the same amount.

Deferred tax asset

The Group has unrecognised deferred tax assets where judgement has been applied around the amount to recognise. Further details
are included in Note 13(d).

• Alternative accounting judgement that could have been applied – recognition of deferred tax asset.

• Effect of that alternative accounting judgement – increase of $21,491,000 in assets.

WANDISCO PLC AN NUAL REPORT AND ACCOUNTS 2019

Financial statementsNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
FOR THE YEAR ENDED 31 DECEMBER 2019

29. Significant accounting policies continued

(d) Revenue from contracts with customers

The following table provides information about the nature and timing of the satisfaction of performance obligations in contracts
with customers, including significant payment terms and the related revenue recognition policies.

The details of the accounting policies in relation to the Group’s various products and services are set out below:

Type of product/service

IFRS 15 treatment

Software licences –
perpetual licences

Under IFRS 15, revenue on perpetual licences is recognised in full once the licence has been granted
and the customer has been provided with access to the software as it is considered that control has been
passed at that point in time.

Software subscriptions
(which include both a
term software licence
and a maintenance and
support contract)

Under IFRS 15 subscription arrangements have been split into two performance obligations which
are both considered as distinct:

• term software licence; and

• maintenance and support.

The allocation of transaction price between the two performance obligations is based on an adjusted
market assessment approach.

Term software licences are treated like perpetual licences with revenue being recognised in full once
the licence has been granted and the customer has been provided with access to the software as it
is considered that control has been passed at that point in time.

The maintenance and support component is spread over the life of the contract as the performance
obligation is satisfied over time matching the period of the contract.

Maintenance and
support contracts

Maintenance and support revenue is spread over time as the performance obligation is satisfied over
the period of the contract.

Training, implementation
and professional services

Sales of training, implementation and professional services are recognised on delivery of the services
at a point in time.

Royalties

Royalties are accounted for on an accruals basis. Under IFRS 15 the recognition of royalties is prohibited
until the sale or usage occurs, even if the sale or usage is probable.

Sales commissions

Under IFRS 15, the costs of obtaining a contract should be recognised as an asset and subsequently
amortised if they are incremental and are expected to be recovered.

Amortisation is charged on a basis consistent with the transfer to the customer of the licence or services
to which the capitalised costs relate.

The Group determines the transaction price it is entitled to in return for providing the promised obligations to the customer based on the
committed contractual amounts. Customers either pay up-front or in payment instalments over the term of the related service agreement.

Contract assets relate to:

• accrued income – licence revenue which has been recognised but has not yet been billed to the customer (as is being billed in instalments
over the term of the related service agreement) at the reporting date. The contract asset is transferred to receivables when the Group
issues an invoice to the customer.

Contract liabilities relate to deferred income which is recognised as revenue when the performance obligations are satisfied.

(e) Segmental reporting

The Directors consider there to be one operating segment, being that of development and sale of licences for software and related
maintenance and support.

The Group has adopted IFRS 8 “Operating Segments” from the date of transition to IFRS. IFRS 8 requires the Group to determine
and present its operating segments based on information which is provided internally to the Chief Operating Decision Maker (“CODM”).
The CODM, who is responsible for allocating resources and assessing the performance of the operating segment, has been identified
as the Chief Executive Officer.

WANDISCO PLC

AN NUAL REPORT AND ACCOUNTS 2019

29. Significant accounting policies continued

(f) Cost of sales

Cost of sales includes commissions earned by our salesforce on sales and direct costs relating to software supply.

(g) Employee benefits

(i) Short-term employee benefits

Short-term employee benefits are expensed as the related service is provided. A liability is recognised for the amount expected to be paid
if the Group has a present legal or constructive obligation to pay this amount because of past services provided by the employee and the
obligation can be estimated reliably.

(ii) Share-based payment arrangements

The grant date fair value of equity-settled share-based payment arrangements granted to employees is recognised as an expense, with
a corresponding increase in equity, over the vesting period of the awards. The amount recognised as an expense is adjusted to reflect the
number of awards for which the related service and non-market performance conditions are expected to be met, such that the amount
ultimately recognised is based on the number of awards that meet the related service and non-market-based performance conditions at
the vesting date. For share-based payment awards with non-vesting conditions, the grant date fair value of the share-based payment is
measured to reflect such conditions and there is no true-up for differences between expected and actual outcomes.

(iii) Defined contribution plans

Obligations for contributions to defined contribution plans are expensed as the related service is provided. Prepaid contributions
are recognised as an asset to the extent that a cash refund or a reduction in future payments is available.

(iv) Termination benefits

Termination benefits are expensed at the earlier of when the Group can no longer withdraw the offer of those benefits and when the
Group recognises costs for a restructuring. If benefits are not expected to be settled wholly within twelve months of the reporting date,
then they are discounted.

(h) Government grants

The Group recognises an unconditional government grant related to development costs as deferred income at fair value if there is
reasonable assurance that they will be received, and the Group will comply with the conditions associated with the grant; they are then
recognised in profit or loss as other income on a systematic basis over the useful life of the asset.

Grants that compensate the Group for expenses incurred are recognised in profit or loss on a systematic basis in the periods in which
the expenses are recognised.

(i) Exceptional items

Exceptional items comprise items of income and expense that are material in amount and that merit separate disclosure in order
to provide an understanding of the Group’s underlying financial performance.

(j) Finance income and finance costs

The Group’s finance income and finance costs include:

• interest income;

• interest expense; and

• the foreign currency gain or loss on financial assets and financial liabilities.

Interest income or expense is recognised using the effective interest method. The effective interest rate is the rate that exactly discounts
estimated future cash payments or receipts through the expected life of the financial instrument to:

• the gross carrying amount of the financial asset; or

• the amortised cost of the financial liability.

In calculating interest income and expense, the effective interest rate is applied to the gross carrying amount of the asset (when the asset
is not credit impaired) or to the amortised cost of the liability. However, for financial assets that have become credit impaired subsequent
to initial recognition, interest income is calculated by applying the effective interest rate to the amortised cost of the financial asset. If the
asset is no longer credit impaired, then the calculation of interest income reverts to the gross basis.

WANDISCO PLC AN NUAL REPORT AND ACCOUNTS 2019

Financial statementsNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
FOR THE YEAR ENDED 31 DECEMBER 2019

29. Significant accounting policies continued

(k) Income tax

Income tax comprises current and deferred tax. It is recognised in profit or loss except to the extent that it relates to a business
combination, or items recognised directly in equity or in OCI.

(i) Current tax

Current tax comprises the expected tax payable or receivable on the taxable income or loss for the year (including R&D tax credits) and
any adjustments to the tax payable or receivable in respect of previous years. The amount of current tax payable or receivable is the best
estimate of the tax amount expected to be paid or received that reflects uncertainty related to income taxes, if any. It is measured using
tax rates enacted or substantively enacted at the reporting date.

Current tax assets and liabilities are offset only if certain criteria are met.

(ii) Deferred tax

Deferred tax is recognised in respect of temporary differences between the carrying amounts of assets and liabilities for financial
reporting purposes and the amounts used for taxation purposes.

Deferred tax is not recognised for:

• temporary differences on the initial recognition of assets or liabilities in a transaction that is not a business combination and that affects

neither accounting nor taxable profit or loss;

• temporary differences related to investments in subsidiaries, associates and joint arrangements to the extent that the Group is able to

control the timing of the reversal of the temporary differences and it is probable that they will not reverse in the foreseeable future; and

• taxable temporary differences arising on the initial recognition of goodwill.

Deferred tax assets are recognised for unused tax losses, unused tax credits and deductible temporary differences to the extent that it is
probable that future taxable profits will be available against which they can be used. Future taxable profits are determined based on the
reversal of relevant taxable temporary differences. If the amount of taxable temporary differences is insufficient to recognise a deferred
tax asset in full, then future taxable profits, adjusted for reversals of existing temporary differences, are considered, based on business
plans for individual subsidiaries in the Group. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that
it is no longer probable that the related tax benefit will be realised; such reductions are reversed when the probability of future taxable
profits improves.

Unrecognised deferred tax assets are reassessed at each reporting date and recognised to the extent that it has become probable
that future taxable profits will be available against which they can be used.

Deferred tax is measured at the tax rates that are expected to be applied to temporary differences when they reverse, using tax rates
enacted or substantively enacted at the reporting date.

The measurement of deferred tax reflects the tax consequences that would follow from the manner in which the Group expects,
at the reporting date, to recover or settle the carrying amount of its assets and liabilities.

Deferred tax assets and liabilities are offset only if certain criteria are met.

(l) Property, plant and equipment

(i) Recognition and measurement

Items of property, plant and equipment are measured at cost, which includes capitalised borrowing costs, less accumulated depreciation
and any accumulated impairment losses.

If significant parts of an item of property, plant and equipment have different useful lives, then they are accounted for as separate items
(major components) of property, plant and equipment.

Any gain or loss on disposal of an item of property, plant and equipment is recognised in profit or loss.

WANDISCO PLC

AN NUAL REPORT AND ACCOUNTS 2019

29. Significant accounting policies continued

(l) Property, plant and equipment continued

(ii) Depreciation

Depreciation is calculated to write off the cost of items of property, plant and equipment less their estimated residual values using the
straight-line method over their estimated useful lives and is generally recognised in profit or loss. Leased assets are depreciated over the
shorter of the lease term and their useful lives unless it is reasonably certain that the Group will obtain ownership by the end of the lease term.

The estimated useful lives of property, plant and equipment for current and comparative periods are as follows:

• Computer equipment

• Fixtures and fittings

Three years

• Leasehold improvements

Three to five years

• Right of use assets

Life of lease

Depreciation methods, useful lives and residual values are reviewed at each reporting date and adjusted if appropriate.

(m) Intangible assets and goodwill

(i) Recognition and measurement

Goodwill

Goodwill arising on the acquisition of subsidiaries is measured at cost less accumulated impairment losses.

Other intangible assets
(including computer software)

Other intangible assets, including those acquired on acquisition of subsidiaries, have finite useful lives
and are measured at cost less accumulated amortisation and any accumulated impairment losses.

Development costs

Expenditure on research activities is recognised in profit or loss as incurred.

Development activities relate to software development and involve a plan or design for the production
of new or substantially improved products and processes. Development expenditure is capitalised only if:

• development costs can be measured reliably;

• the product or process is technically and commercially feasible;

• future economic benefits are probable; and

• the Group intends to, and has sufficient resources to, complete development and to use or sell the asset.

The expenditure capitalised includes direct labour and overhead costs that are directly attributable
to preparing the asset for its intended use.

Otherwise, development costs are recognised in profit or loss as incurred.

Subsequent to initial recognition, development expenditure is measured at cost less accumulated
amortisation and any accumulated impairment losses.

(ii) Amortisation

Amortisation is calculated to write off the cost of intangible assets less their estimated residual values using the straight-line method over
their estimated useful lives and is generally recognised in profit or loss. Goodwill is not amortised.

The estimated useful lives for current and comparative periods are as follows:

• Other intangible assets

• Development costs

• Computer software

Two years

Over the life of the software licence

Amortisation methods, useful lives and residual values are reviewed at each reporting date and adjusted if appropriate.

WANDISCO PLC AN NUAL REPORT AND ACCOUNTS 2019

Financial statements

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
FOR THE YEAR ENDED 31 DECEMBER 2019

29. Significant accounting policies continued

(n) Financial instruments

(i) Recognition and initial measurement

Trade receivables are initially recognised when they are originated. All other financial assets and liabilities are initially recognised when
the Group becomes a party to the contractual provisions of the instrument.

A financial asset (unless it is a trade receivable without a significant financing component) or financial liability is initially measured at fair value
plus, for an item not at fair value through profit or loss (“FVTPL”), transaction costs that are directly attributable to its acquisition or issue.
A trade receivable without a significant financing component is initially measured at the transaction price.

(ii) Classification and subsequent measurement

Financial assets

On initial recognition, a financial asset is classified as measured at amortised cost.

Financial assets are not reclassified after their initial recognition unless the Group changes its business model for managing financial assets,
in which case all affected financial assets are reclassified on the first day of the first reporting period following the change in the business model.

A financial asset is measured at amortised cost if it meets both of the following conditions and is not designated as at FVTPL:

• it is held within a business model whose objective is to hold assets to collect contractual cash flows; and

• its contractual terms give rise on specified dates to cash flows that are solely payments of principal and interest on the principal

amount outstanding.

Financial assets – business model assessment

The Group assesses the objective of the business model in which a financial asset is held at a portfolio level because this best reflects
the way the business is managed, and information is provided to management.

Financial assets – assessment whether contractual cash flows are solely payments of principal and interest

For the purpose of this assessment, “principal” is defined as the fair value of the financial asset on initial recognition. “Interest” is defined
as consideration for the time value of money and for the credit risk associated with the principal amount outstanding during a particular
period of time and for other basic lending risks and costs (e.g. liquidity risk and administrative costs), as well as a profit margin.

In assessing whether the contractual cash flows are solely payments of principal and interest, the Group considers the contractual terms
of the instrument. This includes assessing whether the financial asset contains a contractual term that could change the timing or amount
of contractual cash flows such that it would not meet this condition. In making this assessment, the Group considers:

• contingent events that would change the amount or timing of cash flows;

• terms that may adjust the contractual coupon rate, including variable rate features;

• prepayment and extension features; and

• terms that limit the Group’s claim to cash flows from specified assets (e.g. non-recourse features).

A prepayment feature is consistent with the sole payments of principal and interest criterion if the prepayment amount substantially
represents unpaid amounts of principal and interest on the principal amount outstanding, which may include reasonable additional
compensation for early termination of the contract. Additionally, for a financial asset acquired at a discount or premium to its contractual
par amount, a feature that permits or requires prepayment at an amount that substantially represents the contractual par amount plus
accrued (but unpaid) contractual interest (which may also include reasonable additional compensation for early termination) is treated
as consistent with this criterion if the fair value of the prepayment feature is insignificant at initial recognition.

WANDISCO PLC

AN NUAL REPORT AND ACCOUNTS 2019

29. Significant accounting policies continued

(n) Financial instruments continued

(ii) Classification and subsequent measurement continued

Financial assets – subsequent measurement and gains and losses

Financial assets at FVTPL

These assets are subsequently measured at fair value. Net gains and losses, including
any interest, are recognised in profit or loss.

Financial assets at amortised cost

These assets are subsequently measured at amortised cost using the effective interest
method. The amortised cost is reduced by impairment losses. Interest income, foreign
exchange gains and losses and impairment are recognised in profit or loss.

Financial liabilities – classification, subsequent measurement and gains and losses

Financial liabilities are classified as measured at amortised cost or FVTPL. A financial liability is classified as at FVTPL if it is classified as
held for trading, is a derivative or is designated as such on initial recognition. Financial liabilities at FVTPL are measured at fair value and
net gains and losses, including any interest expense, are recorded in profit or loss. Other financial liabilities are subsequently measured at
amortised cost using the effective interest method. Interest expense and foreign exchange gains and losses are measured in profit or loss.
Any gain or loss on derecognition is also recognised in profit or loss.

(iii) Derecognition

Financial assets

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

Financial liabilities

The Group derecognises a financial liability when its contractual obligations are discharged or cancelled or expire. The Group also
derecognises a financial liability when its terms are modified, and the cash flows of the modified liability are substantially different,
in which case a new financial liability based on the modified terms is recognised at fair value.

On derecognition of a financial liability, the difference between the carrying amount extinguished and the consideration paid
(including any non-cash assets transferred or liabilities assumed) is recognised in profit or loss.

(iv) Offsetting

Financial assets and financial liabilities are offset and the net amount presented in the statement of financial position when, and only
when, the Group has a legally enforceable right to set off the amounts and it intends either to settle them on a net basis to realise the
asset and settle the liability simultaneously.

(o) Share capital

Share capital is denominated in sterling and is translated into US dollars on issue with no subsequent retranslation. Incremental costs
directly attributable to the issue of ordinary shares are recognised as a deduction from equity. Income tax relating to transaction costs
of an equity transaction is accounted for in accordance with IAS 12.

WANDISCO PLC AN NUAL REPORT AND ACCOUNTS 2019

Financial statementsNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
FOR THE YEAR ENDED 31 DECEMBER 2019

29. Significant accounting policies continued

(p) Impairment

(i) Non-derivative financial assets

Financial instruments and contract assets

The Group recognises loss allowances for estimate credit losses (“ECL”) on:

• financial assets measured at amortised cost; and

• contract assets.

Loss allowances for trade receivables and contract assets are always measured at an amount equal to lifetime ECLs.

For other financial assets, when determining whether the credit risk of a financial asset has increased significantly since initial recognition
and when estimating ECLs, the Group considers reasonable and supportable information that is relevant and available without undue cost
or effort. This includes both quantitative and qualitative information and analysis, based on the Group’s historical experience and
informed credit assessment and including forward-looking information.

Measurement of ECLs

ECLs are a probability-weighted estimate of credit losses. Credit losses are measured as the present value of all cash shortfalls (i.e. the
difference between cash flows due to the entity in accordance with the contract and the cash flows that the Group expects to receive).

ECLs are discounted at the effective interest rate of the financial asset.

Credit-impaired financial assets

At each reporting date, the Group assesses whether financial assets carried at amortised cost are credit impaired. A financial asset is “credit
impaired” when one or more events that have a detrimental impact on the estimated future cash flows of the financial asset have occurred.

Evidence that a financial asset is credit impaired includes the following observable data:

• significant financial difficulty of the customer;

• a breach of contract, such as a default; or

• it is probable that the customer will enter bankruptcy or other financial reorganisation.

Presentation of allowance for ECL in the statement of financial position

Loss allowances for financial assets measured at amortised cost are deducted from the gross carrying amount of the assets.

The gross carrying amount of a financial asset is written off when the Group has no reasonable expectations of recovering a financial
asset in its entirety or a portion thereof. The Group individually makes an assessment with respect to the timing and amount of write-off
based on whether there is a reasonable expectation of recovery. The Group expects no significant recovery from the amount written off.

(ii) Non-financial assets

At each reporting date, the Group reviews the carrying amounts of its non-financial assets (other than deferred tax assets) to determine
whether there is any indication of impairment. If any such indication exists, then the asset’s recoverable amount is estimated. Goodwill
is tested annually for impairment.

For impairment testing, assets are grouped together into the smallest group of assets that generates cash inflows from continuing use
that is largely independent of the cash inflows of other assets or CGUs. Goodwill arising from a business combination is allocated to
CGUs or groups of CGUs that are expected to benefit from the synergies of the combination.

The recoverable amount of an asset or CGU is the greater of its value in use and its fair value less costs to sell. Value in use is based on
the estimated future cash flows, discounted to their present value using a pre-tax discount rate that reflects current market assessments
of the time value of money and the risks specific to the asset or CGU.

An impairment loss is recognised if the carrying amount of an asset or CGU exceeds its recoverable amount.

Impairment losses are recognised in profit or loss. They are allocated first to reduce the carrying amount of any goodwill allocated
to the CGU, and then to reduce the carrying amount of the other assets in the CGU on a pro rata basis.

An impairment loss in respect of goodwill is not reversed. For other assets, an impairment loss is reversed only to the extent that the
asset’s carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortisation,
if no impairment had been recognised.

WANDISCO PLC

AN NUAL REPORT AND ACCOUNTS 2019

29. Significant accounting policies continued

(q) Leases

(i) Policy applicable from 1 January 2019

At inception of a contract, the Group assesses whether a contract is, or contains, a lease. A contract is, or contains, a lease if the contract
conveys the right to control the use of an identified asset for a period of time in exchange for consideration. To assess whether a contract
conveys the right to control the use of an identified asset, the Group assesses whether:

• the contract involves the use of an identified asset – this may be specified explicitly or implicitly and should be physically distinct or

represent substantially all of the capacity of a physically distinct asset. If the supplier has a substantive substitution right, then the asset
is not identified;

• the Group has the right to obtain substantially all of the economic benefits from use of the asset throughout the period of use; and

• the Group has the right to direct the use of the asset. The Group has this right when it has the decision-making rights that are mostly relevant

to changing how and for what purpose the asset is used is predetermined; the Group has the right to direct the use of the asset if either:

– the Group has the right to operate the asset; or

– the Group designed the asset in a way that predetermines how and for what purpose it will be used.

This policy is applied to contracts entered into, or changed, on or after 1 January 2019.

At inception or on reassessment of a contract that contains a lease component, the Group allocates the consideration in the contract
to each lease component on the basis of their relative stand-alone prices.

(ii) Policy applicable before 1 January 2019

For contracts entered into before 1 January 2019, the Group determined whether the arrangement was or contained a lease based
on the assessment of whether:

• fulfilment of the arrangement was dependent on the use of a specific asset or assets; and

• the arrangement had conveyed a right to use the asset. An arrangement conveyed the right to use the asset if one of the following was met:

– the purchaser had the ability or right to operate the asset while obtaining or controlling more than an insignificant amount of the output;

– the purchaser had the ability or right to control physical access to the asset while obtaining or controlling more than an insignificant

amount of the output; or

– facts and circumstances indicated that it was remote that other parties would take more than an insignificant amount of the output,

and the price per unit was neither fixed per unit of output nor equal to the current market price per unit of output.

(iii) As a lessee

The Group recognises a right of use asset and a lease liability at the lease commencement date. The right of use asset is initially measured
at cost, which compromises the initial amount of the lease liability adjusted for any lease payments made on or before the commencement
date, plus any initial direct costs incurred and an estimate of costs to dismantle and remove the underlying asset or to restore the
underlying asset or the site on which it is located, less any lease incentives received.

The right of use asset is subsequently depreciated using the straight-line method from the commencement date to the earlier of the end
of the useful life of the right of use asset or the end of the lease term. The estimated useful lives of right of use assets are determined on
the same basis as those of property and equipment. In addition, the right of use asset is periodically reduced by impairment losses, if any,
and adjusted for certain remeasurements of the lease liability.

The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date, discounted
using the interest rate implicit in the lease, or if that rate cannot be readily determined, the Group’s incremental borrowing rate. Generally,
the Group uses its incremental borrowing rate as the discount rate.

Lease payments included in the measurement of the lease liability comprise the following:

• fixed payments, including in-substance fixed payments;

• variable lease payments that depend on an index or a rate, initially measured using the index or rate as at the commencement date;

• amounts expected to be payable under a residual value guarantee; and

• the exercise price under a purchase option that the Group is reasonably certain to exercise, lease payments in an optional renewal

period if the Group is reasonably certain to exercise an extension option, and penalties for early termination of a lease unless the Group
is reasonably certain not to terminate early.

WANDISCO PLC AN NUAL REPORT AND ACCOUNTS 2019

Financial statementsNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
FOR THE YEAR ENDED 31 DECEMBER 2019

29. Significant accounting policies continued

(q) Leases continued

(iii) As a lessee continued

The lease liability is measured at amortised cost using the effective interest method. It is remeasured when there is a change in future lease
payments arising from a change in an index or rate, if there is a change in the Group’s estimate of the amount expected to be payable under
a residual value guarantee, or if the Group changes its assessment of whether it will exercise a purchase, extension or termination option.

When the lease liability is remeasured in this way, a corresponding adjustment is made to the carrying amount of the right of use asset
or is recorded in profit or loss if the carrying amount of the right of use asset has been reduced to zero.

The Group presents right of use assets that do not meet the definition of investment property in “property, plant and equipment”

and lease liabilities in “loans and borrowings” in the statement of financial position.

(iv) Short-term leases and leases of low-value assets

The Group has elected not to recognise right of use assets and lease liabilities for short-term leases that have a lease term of twelve
months or less and leases of low-value assets, including IT equipment. The Group recognises the lease payments associated with these
leases as an expense on a straight-line basis over the lease term.

(v) Under IAS 17

In the comparative period, as a lessee the Group classified leases that transfer substantially all of the risks and rewards of ownership as
finance leases. When this was the case, the leased assets were measured initially at an amount equal to the lower of their fair value and
the present value of the minimum lease payments. Minimum lease payments were the payments over the lease term that the lessee
was required to make, excluding any contingent rent.

Subsequently, the assets were accounted for in accordance with the accounting policy applicable to that asset.

Assets held under other leases were classified as operating leases and were not recognised in the Group’s statement of financial position.
Payments made under operating leases were recognised in profit or loss on a straight-line basis over the term of the lease. Lease incentives
received were recognised as an integral part of the total lease expense, over the term of the lease.

(r) Operating loss

Operating loss is the result generated from the continuing principal revenue-producing activities of the Group as well as other income
and expenses related to operating activities. Operating loss excludes net finance costs and income taxes.

(s) Fair value measurement

“Fair value” is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market
participants at the measurement date in the principal or, in its absence, the most advantageous market to which the Group has access
at that date. The fair value of a liability reflects its non-performance risk.

A number of the Group’s accounting policies and disclosures require the measurement of fair values, for both financial and non-financial
assets and liabilities (see Note 25).

When one is available, the Group measures the fair value of an instrument using the quoted price in an active market for that instrument.
A market is regarded as “active” if transactions for the asset or liability take place with sufficient frequency and volume to provide pricing
information on an ongoing basis.

If there is no quoted price in an active market, then the Group uses valuation techniques that maximise the use of relevant observable
inputs and minimise the use of unobservable inputs. The chosen valuation technique incorporates all of the factors that market
participants would consider in pricing a transaction.

If an asset or a liability measured at fair value has a bid price and an ask price, then the Group measures assets and long positions at a bid
price and liabilities and short positions at an ask price.

The best evidence of the fair value of a financial instrument on initial recognition is normally the transaction price – i.e. the fair value of
the consideration given or received. If the Group determines that the fair value on initial recognition differs from the transaction price and
the fair value is evidenced neither by a quoted price in an active market for an identical asset or liability nor based on a valuation technique
for which any unobservable inputs are judged to be insignificant in relation to the measurement, then the financial instrument is initially
measured at fair value, adjusted to defer the difference between the fair value on initial recognition and the transaction price. Subsequently,
that difference is recognised in profit or loss on an appropriate basis over the life of the instrument but no later than when the valuation
is wholly supported by observable market data or the transaction is closed out.

WANDISCO PLC

AN NUAL REPORT AND ACCOUNTS 2019

30. Standards issued but not yet effective

Several new standards are effective for annual periods beginning after 1 January 2020 and earlier application is permitted; however,
the Group has not early adopted the new or amended standards in preparing these consolidated financial statements.

The following amended standards and interpretations are not expected to have a significant impact on the Group’s consolidated
financial statements:

• Amendments to References to the Conceptual Framework in IFRS Standards (effective date 1 January 2020);

• IFRS 17 “Insurance Contracts” (effective date 1 January 2021);

• Definition of a Business (Amendments to IFRS 3) (effective date 1 January 2020);

• Definition of Material (Amendments to IAS 1 and IAS 8) (effective date 1 January 2020); and

• Interest Rate Benchmark Reform (Amendments to IFRS 9, IAS 39 and IFRS 7).

31. Subsequent events

On 12 June 2020 the Group announced a placing (which was approved by General Meeting on 29 June 2020) for the subscription of
3,100,000 new ordinary shares of 10 pence each in the Company (comprising 2,362,515 placing shares and 737,485 direct subscription
shares) at a price of 650 pence (a discount of 12.2% on the closing share price on 11 June 2020), raising gross proceeds of $25m.
This represents 6.4% of the entire existing share capital of WANdisco. The proceeds will be used to support our relationships with strategic
cloud partners and provide growth working capital.

The global expansion of the COVID-19 virus since the fiscal year end has resulted in macroeconomic uncertainty. Whilst there has been
no material impact on the Group as at the date of this report it is difficult to assess the short to longer-term impact of that uncertainty on
the Group’s operations.

As at 31 May 2020 the Group had cash reserves of $11.6m.

Despite the significant challenge COVID-19 presents we are moving forward this year with continued business momentum as evidenced
by our landmark agreement with Microsoft announced in June 2020. Management expects that the potential of the agreement with
Microsoft will overcome any short-term headwinds from the economic uncertainty surrounding the impact of COVID-19.

WANDISCO PLC AN NUAL REPORT AND ACCOUNTS 2019

Financial statementsFIVE-YEAR RECORD

31 December

Revenue

Revenue growth

Deferred revenue

Deferred revenue growth

Cash

Operating loss

Amortisation of intangible assets

Depreciation of property, plant and equipment

Exceptional items

2015
$’000

2016
$’000

2017
$’000

As
restated
2018
$’000

2019
$’000

10,994

11,379

19,637

17,019

16,155

(2%)

73%

(13%)

(5%)

9,757

(13%)

12,492

14,160

28%

13%

4,318

(70%)

3,810

(12%)

2,555

7,558

27,396

10,757

23,354

(30,529)

(18,398)

(10,603)

(23,237)

(27,179)

9,600

8,466

6,699

6,475

270

614

174

215

—

388

—

5,701

1,101

—

EBITDA before exceptional items

(20,045)

(9,726)

(3,689)

(16,374)

(20,377)

Add back equity-settled share-based payment

4,057

2,262

3,109

6,977

8,707

Adjusted EBITDA before exceptional items

Development expenditure capitalised

(15,988)

(8,369)

(7,464)

(5,860)

(580)

(9,397)

(11,670)

(6,303)

(4,910)

(5,062)

Adjusted EBITDA before exceptional items including development expenditure

(24,357)

(13,324)

(6,883)

(14,307)

(16,732)

Note:

• The 2018 figures include the adoption of IFRS 15 “Revenue from Contracts with Customers” and the prior years have not been restated

and are prepared on an IAS 18 basis.

• The 2019 figures include the adoption of IFRS 16 “Leases” and the prior years have not been restated and are presented on an IAS 17 basis.

• The 2016 to 2018 equity-settled share-based payment figures are restated as detailed in Note 15(a).

WANDISCO PLC

AN NUAL REPORT AND ACCOUNTS 2019

NOTICE OF ANNUAL GENERAL MEETING

Notice is given that the eighth Annual General Meeting of WANdisco plc
(“the Company”) will be held at the UK Company’s offices, Castle
House, 1–13 Angel Street, Sheffield S3 8LN, on 29 July 2020 at
10am for the following purposes:

To consider and, if thought fit, to pass the following resolutions
as ordinary resolutions:

That the Company’s financial statements for the year ended
31 December 2019, the Strategic report and the reports of the
Directors and auditor thereon be received and considered.

2. That David Richards be re-elected as a Director of the Company.

3. That Dr Yeturu Aahlad be re-elected as a Director of the Company.

4. That BDO LLP be appointed as auditor of the Company.

5. That the Directors be authorised to determine the remuneration

of the auditor.

6. That, in substitution for all existing authorities but without

prejudice to any allotment, offer or agreement already made
pursuant thereto, the Directors be and are hereby generally and
unconditionally authorised pursuant to Article 2.3 of the Company’s
Articles of Association (“the Articles”) to exercise all powers of
the Company to allot, grant options over or otherwise dispose
of relevant securities (as that term is defined in the Articles) in
respect of up to an aggregate nominal amount of £1,711,411,
provided that (unless previously revoked, varied or renewed) this
authority shall expire on the earlier of the date which is 15 months
after the date the resolution was passed and the conclusion of
the next Annual General Meeting of the Company, save that the
Company may before such expiry make an offer or agreement which
would or might require relevant securities to be allotted after such
expiry and the Directors may allot equity securities in pursuance
of such an offer or agreement as if the power had not expired.

That, pursuant to Article 58A(1)(b) of the Companies (Jersey)
Law 1991 (“the Law”) and Article 13 of the Articles, an ordinary
share purchased pursuant to resolution 9 below may be held
by the Company as treasury shares in accordance with
Articles 58A and 58B of the Law.

To consider and, if thought fit, to pass the following resolutions
as special resolutions:

8. That, subject to the passing of resolution 6 and pursuant to
Article 2.10 of the Articles, the Directors be and are hereby
generally empowered to allot, grant options over or otherwise
dispose of equity securities (within the meaning of the Articles)
wholly for cash, pursuant to the general authority described in
resolution 6 above, as if pre-emption rights did not apply to any
such allotment, such power being limited to:

8.1 the allotment of equity securities in connection with a

rights issue, open offer or pre-emptive offer to holders on
the register of the ordinary shares in the capital of the
Company (“ordinary shares”) on a date fixed by the Directors
where the equity securities respectively attributable to the
interests of all those shareholders are proportionate (as nearly
as practicable) to their respective holdings on that date subject
to any exclusions or other arrangements as the Directors may
consider necessary or expedient in relation to fractional
entitlements, legal or practical problems under the law of any
territory or the regulations or requirements of any relevant
regulatory authority or stock exchange in any territory; and

8.2 the allotment (other than pursuant to resolution 8.1 above)
wholly for cash of ordinary shares up to an aggregate
nominal amount of £513,423,

provided that (unless previously revoked, varied or renewed),
such authorities shall expire on the earlier of the date which is
15 months after the date the resolution was passed and the
conclusion of the next Annual General Meeting of the Company,
save that the Company may before such expiry make an offer
or agreement which would or might require equity securities to
be allotted after such expiry and the Directors may allot equity
securities in pursuance of such an offer or agreement as if the
power had not expired.

9. That the Directors be and are hereby authorised pursuant to

Article 13 of the Articles and Article 57 of the Law as amended
to make market purchases of ordinary shares, subject to the
following conditions:

9.1 the maximum number of ordinary shares authorised to be
purchased may not be more than 15% of the issued share
capital of the Company as at the date of this Notice;

9.2 the minimum price (exclusive of expenses) which may be

paid for an ordinary share is £0.001; and

9.3 the maximum price (exclusive of expenses) which may

be paid for an ordinary share shall not exceed:

9.3.1

an amount equal to 105% of the average middle
market quotation for ordinary shares taken from the
London Stock Exchange plc Daily Official List for the
five business days immediately preceding the date
on which such shares are to be contracted to be
purchased; and

9.3.2 the higher of the price of the last independent trade
and the highest current independent bid on the London
Stock Exchange plc Daily Official List at the time,

such authority to expire on the earlier of the date which is 15 months
after the date the resolution was passed and the conclusion of
the next Annual General Meeting of the Company, unless such
authority is varied, revoked or renewed prior to such date.

10. THAT with effect from the conclusion of the meeting the draft
Articles of Association produced to the meeting and, for the
purposes of identification, initialled by the Chairman be
adopted as the Articles of Association of the Company in
substitution for, and to the exclusion of, the Company’s existing
Articles of Association.

By order of the Board

Larry Webster
Company Secretary
29 June 2020

Registered in Jersey under the Companies (Jersey) Law 1991
with company number 110497.

Registered office

47 Esplanade
St. Helier
Jersey
JE1 0BD

WANDISCO PLC AN NUAL REPORT AND ACCOUNTS 2019

Financial statements

NOTICE OF ANNUAL GENERAL MEETING CONTINUED

Notes

The following notes explain your general rights as a shareholder
and your right to attend and vote at this Meeting or to appoint
someone else to vote on your behalf.

To be entitled to attend and vote at the Meeting (and for the
purpose of the determination by the Company of the number
of votes they may cast), shareholders must be registered in the
Register of Members of the Company at close of trading on
27 July 2020. Changes to the Register of Members after the
relevant deadline shall be disregarded in determining the rights
of any person to attend and vote at the Meeting.

2. Shareholders, or their proxies, intending to attend the Meeting
in person are requested, if possible, to arrive at the Meeting
venue at least 20 minutes prior to the commencement of
the Meeting at 10am (UK time) on 29 July 2020 so that their
shareholding may be checked against the Company’s Register
of Members and attendances recorded.

3. Shareholders are entitled to appoint another person as a proxy
to exercise all or part of their rights to attend and to speak and
vote on their behalf at the Meeting. A shareholder may appoint
more than one proxy in relation to the Meeting provided that
each proxy is appointed to exercise the rights attached to a
different ordinary share or ordinary shares held by that shareholder.
A proxy need not be a shareholder of the Company.

4. In the case of joint holders, where more than one of the joint
holders purports to appoint a proxy, only the appointment
submitted by the most senior holder will be accepted. Seniority
is determined by the order in which the names of the joint holders
appear in the Company’s Register of Members in respect of the
joint holding (the first named being the most senior).

5. A vote withheld is not a vote in law, which means that the vote

will not be counted in the calculation of votes for or against the
resolution. If no voting indication is given, your proxy will vote
or abstain from voting at his or her discretion. Your proxy will
vote (or abstain from voting) as he or she thinks fit in relation
to any other matter which is put before the Meeting.

6. You can vote either:

• by logging on to www.signalshares.com and following

the instructions;

• you may request a hard-copy form of proxy directly from

the registrars, Link Asset Services (previously called Capita),
on Tel: 0371 664 0300. Calls are charged at the standard
geographic rate and will vary by provider. Calls outside
the United Kingdom will be charged at the applicable
international rate. We are open between 9am and 5.30pm,
Monday to Friday excluding public holidays in England and
Wales; or

• in the case of CREST members, by utilising the CREST

electronic proxy appointment service in accordance with
the procedures set out below.

In order for a proxy appointment to be valid a form of proxy
must be completed. In each case the form of proxy must be
received by Link Asset Services at 34 Beckenham Road,
Beckenham, Kent BR3 4TU, by 10am on 27 July 2020.

WANDISCO PLC

AN NUAL REPORT AND ACCOUNTS 2019

If you return more than one proxy appointment, either by paper
or electronic communication, the appointment received last
by the registrars before the latest time for the receipt of proxies
will take precedence. You are advised to read the terms and
conditions of use carefully. Electronic communication facilities
are open to all shareholders and those who use them will not
be disadvantaged.

8. The return of a completed form of proxy, electronic filing or any
CREST Proxy Instruction (as described in Note 11 below) will not
prevent a shareholder from attending the Meeting and voting in
person if he/she wishes to do so.

9. CREST members who wish to appoint a proxy or proxies

through the CREST electronic proxy appointment service may
do so for the Meeting (and any adjournment of the Meeting) by
using the procedures described in the CREST Manual (available
from www.euroclear.com/site/public/EUI). CREST personal
members or other CREST sponsored members, and those
CREST members who have appointed a service provider(s),
should refer to their CREST sponsor or voting service provider(s),
who will be able to take the appropriate action on their behalf.

10. In order for a proxy appointment or instruction made by means
of CREST to be valid, the appropriate CREST message (“a CREST
Proxy Instruction”) must be properly authenticated in accordance
with Euroclear UK & Ireland Limited’s specifications and must
contain the information required for such instructions, as described
in the CREST Manual. The message must be transmitted so
as to be received by the issuer’s agent (ID RA10) by 10am on
27 July 2020. For this purpose, the time of receipt will be taken
to mean the time (as determined by the timestamp applied to
the message by the CREST application host) from which the
issuer’s agent is able to retrieve the message by enquiry to CREST
in the manner prescribed by CREST. After this time, any change
of instructions to proxies appointed through CREST should be
communicated to the appointee through other means.

11. CREST members and, where applicable, their CREST sponsors
or voting service providers should note that Euroclear UK &
Ireland Limited does not make available special procedures in
CREST for any particular message. Normal system timings and
limitations will, therefore, apply in relation to the input of CREST
Proxy Instructions. It is the responsibility of the CREST member
concerned to take (or, if the CREST member is a CREST personal
member, or sponsored member, or has appointed a voting
service provider(s), to procure that his CREST sponsor or voting
service provider(s) take(s)) such action as shall be necessary to
ensure that a message is transmitted by means of the CREST
system by any particular time. In this connection, CREST
members and, where applicable, their CREST sponsors or
voting system providers are referred, in particular, to those
sections of the CREST Manual concerning practical limitations
of the CREST system and timings. The Company may treat as
invalid a CREST Proxy Instruction in the circumstances set out
in Article 34(1) of the Companies (Uncertificated Securities)
(Jersey) Order 1999.

15. Any shareholder attending the Meeting has the right to ask
questions. The Company must cause to be answered any
such question relating to the business being dealt with at the
Meeting but no such answer need be given if: (a) to do so would
interfere unduly with the preparation for the Meeting or involve
the disclosure of confidential information; (b) the answer has
already been given on a website in the form of an answer to a
question; or (c) it is undesirable in the interests of the Company
or the good order of the Meeting that the question be answered.

16. The following documents are available for inspection during

normal business hours at the registered office of the Company
on any business day from the date of this Notice until the time
of the Meeting and may also be inspected at the Meeting venue,
as specified in this Notice, from 9.45am on the day of the
Meeting until the conclusion of the Meeting:

• copies of the Directors’ letters of appointment or

service contracts.

A copy of this Notice can be found on the Company’s website at
www.wandisco.com.

Notes continued

12. Any corporation which is a shareholder can appoint one or

more corporate representatives who may exercise on its behalf
all of its powers as a shareholder provided that no more than
one corporate representative exercises powers in relation to the
same shares.

13. As at 29 June 2020 (being the latest practicable business day

prior to the publication of this Notice), the Company’s ordinary
issued share capital consists of 51,342,324 ordinary shares,
carrying one vote each. Therefore, the total voting rights in the
Company as at 29 June 2020 are 51,342,324.

14. In the Company’s Articles of Association, Article 22.5 says:
Where so requested in the manner set out in section 527(4)
of the UK Companies Act 2006 by members who hold shares
representing at least 10 per cent of the paid up share capital of
the Company (excluding treasury shares) and who have a right
to vote at the general meeting at which the Company’s annual
accounts are laid, the Company shall without prejudice to its
obligations under the Companies Law publish on its website
a statement setting out any matter relating to the audit of the
Company’s accounts or any circumstances connected with
an auditor of the Company ceasing to hold office, and the
Company shall comply with all the obligations relating to the
publication of such statement contained in the provisions of
sections 527 to 529 (other than sections 527(5) and 527(6)) of
the UK Companies Act 2006, provided always that the Company
shall not be required to comply with the obligation set out in
section 527(1) of the UK Companies Act 2006 where the board
believes in good faith that the rights conferred by this Article 22
are being abused.

WANDISCO PLC AN NUAL REPORT AND ACCOUNTS 2019

Financial statements SECRETARY, ADVISERS AND SHARE CAPITAL INFORMATION

Secretary

Larry Webster

Offices

UK office
Castle House
1–13 Angel Street
Sheffield S3 8LN

US office
5000 Executive Parkway
Suite 270
San Ramon
CA 94583

Registered office
47 Esplanade
St. Helier
Jersey JE1 0BD

Company registered number

110497

Broker

Stifel Nicolaus Europe Ltd
150 Cheapside
London EC2V 6ET

Auditor

BDO LLP
55 Baker St
Marylebone
London W1U 7EU

Legal advisers

Brown Rudnick LLP
8 Clifford Street
London W1S 2LQ

Carey Olsen (Jersey) LLP
47 Esplanade
St. Helier
Jersey JE1 0BD

Bankers

Silicon Valley Bank
Alphabeta
14–18 Finsbury Square
London EC2A 1BR

HSBC Bank plc
Yorkshire and North East Corporate Banking Centre
4th Floor
City Point
29 King Street
Leeds LS1 2HL

Registrars

Link Asset Services
The Registry
34 Beckenham Road
Beckenham
Kent BR3 4TU

Share capital

The ordinary share capital of WANdisco plc is listed on AIM,
a market operated by London Stock Exchange Group plc.
The shares are listed under the trading ticker WAND.
The ISIN number is JE00B6Y3DV84.

WANDISCO PLC

AN NUAL REPORT AND ACCOUNTS 2019

CBP002647

WANdisco plc is committed to the environmental issues reflected in
this Annual Report. The report is printed on Arcoprint, which is FSC®
certified and ECF (Elemental Chlorine Free), and printed in the UK by
Park Communications using their environmental printing technology.
Both manufacturing mill and the printer are registered to the
Environmental Management System ISO14001 and are Forest
Stewardship Council® (FSC) chain-of-custody certified.

WANdisco plc
47 Esplanade
St. Helier
Jersey JE1 0BD