REG - Mobile Streams plc - Final Results and Notice of AGM
30/12/2021 11:45
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RNS Number : 0705X Mobile Streams plc 30 December 2021
30 December 2021
Mobile Streams plc
("MOS" or "the Company")
Audited Results for the year to 30 June 2021, and Notice of AGM
The Company is pleased to announce its audited results for the year to 30 June
2021.
The Company will publish the Accounts and the Notice of Annual General Meeting
("AGM") on its website later today. These, and the accompanying Form of Proxy
in relation to the AGM and Accounts, will be posted to Shareholders as soon as
possible. The AGM will be held at 11.00am on 1 February 2022 at Peterhouse
Capital, 3rd Floor, 80 Cheapside, London, EC2V 6EE.
This announcement contains inside information for the purposes of Article 7 of
the Market Abuse Regulation (EU) No. 596/2014, as it forms part of UK Domestic
Law by virtue of the European Union (Withdrawal) Act 2018. Upon the
publication of this announcement, this inside information is now considered to
be in the public domain.
For further information, please contact:
Mobile Streams plc
Nigel Burton, Non-Executive Director
+44 77 8523 4447
www.mobilestreams.com (https://www.mobilestreams.com)
Beaumont Cornish (Nominated Adviser)
James Biddle and Roland Cornish
+44 (0) 20 7628 3396
Peterhouse Capital Limited (Broker)
Lucy Williams and Duncan Vasey
+44 (0) 20 7469 0930
AUDITED RESULTS FOR THE YEAR TO 30 JUNE 2021
Chairman's Statement
The Board of Mobile Streams plc presents its audited accounts for the
financial year ended 30 June 2021.
In the year to 30 June 2021 Mobile Streams continued to offer games and other
content direct to consumers across a wide range of mobile devices in three
emerging markets, whilst focusing resources on the growth of Streams Data, the
data insight and intelligence platform launched in 2020. Market conditions in
Argentina in particular had an adverse effect on revenues, leading to
increased losses. However, the net revenues of Streams Data for the year of
£137k exceeded the £85k net revenues of the legacy content business.
Group revenue for the year ended 31 June 2021 was £395k (2020: £636k).
Trading EBITDA (calculated as profit before tax, interest, amortisation,
depreciation, share based payment expense and impairment of assets) was
negative £940k for the year (2020: negative £610k). Loss before tax was
£1,032k (2020: £1.563m loss, of which £953k was loss on derecognition of
subsidiaries). Most of the reduction in revenues is attributable to
challenging trading conditions in Argentina. Revenue in Argentina (which
equated to 58% of Group revenue) on a constant currency basis decreased by
15.8% from AR$36m to AR$30m.
The Directors do not propose payment of a dividend (2020: £Nil). The Group
had a net cash balance of £1.7m, with a bank debt of £50k, at 30 June 2021
(2020: £1.3m cash with no debt).
The Group's principal business remains the generation of revenues through
relationships with mobile operators and content aggregators. Since the year
end, using the Stream Data platform and in partnership with Quanta Media Group
("QMG" or "Quanta"), the Company has launched its LiveScores football 365
service in Mexico, Argentina and Brazil. These launches have enabled the Group
to reinvigorate and reverse the decline of the content business.
In November 2019 the Company announced that it would launch a new data insight
and intelligence platform, called Streams, based on licensing of the
KrunchData platform. The Streams business provides bespoke data and marketing
services to the B2B (business to business) market and targets customers in the
US, LatAm and Europe. The Company announced the launch of the Streams SaaS
("Software as a Service") platform in July 2020, and since October 2020
customers have been able to access the service and pay for it online.
The Board believes that the LiveScores services and Streams Data offering
create significant opportunities for the Company to deliver growth in
shareholder value via newly developed products and services. The Board
continues to examine additional sources to broaden the appeal of its content
business The main focus for the current year will be growing and developing
the product and sales pipelines for these businesses.
During the year, the Company raised £2.2m before expenses through a Placing
in March 2021 and a further £69k as a result of warrant exercises by
investors in October 2020, December 2020 and April 2021. The Placing in March
2021 demonstrated strong investor support for the Group's strategy.
In March 2021 the Group acquired a 49% interest in KrunchData Limited
("Krunch") for £735k in cash and shares, with an option to acquire the
remaining 51% at any time in the following two years for £735k, again in cash
and shares (together the "Transaction"). As part of the Transaction, it was
agreed that the revenue share agreement, under which the share of the revenues
from Streams Data received by the Company would reduce from 100% to 50% from
January 2022, would be terminated immediately. The Directors consider that the
Group exercises control over Krunch, as the shareholders of Krunch are
Directors and Senior Managers as well as shareholders of the Group, and
because the Group has the right to acquire the remaining 51% at any time prior
to March 2023 on fixed terms.
Also in March 2021, the Group announced that Quanta had signed a major
contract to use the Streams data platform. It became clear that there were
multiple opportunities to drive revenue growth via the partnership with
Quanta, as a result of which the Group announced that to accelerate
development of these opportunities and advance Quanta's business plans, the
Group would provide Quanta a Convertible Loan Note of £250,000 (the "Loan"),
with a further £250,000 to be made available subject to achieving various
agreed milestones, centred around Quanta's entrance to key markets.
The Directors have carefully monitored the impact of the Covid-19 pandemic,
including the current rapid spread of the Omicron variant, on the business,
and at the time of writing revenues have not been affected. All our staff work
from home, and the online nature of the existing business, both in terms of
content delivery and revenue collection, means that we do not envisage any
disruption to that business unless a prolonged economic downturn results in a
rise in cancellations. The Streams Data business is also largely remote,
although in the short term face to face marketing has been impacted and demand
could be affected as clients themselves respond to the ongoing effects of the
pandemic.
The Directors have prepared a cashflow forecast which indicates that the
current cash balances of £1.4m are expected to cover the Company's working
capital requirements for the foreseeable future.
Bob Moore
Chairman
30 December 2021
Operating review
Mobile Streams' performance during the financial year ended 30 June 2021
combined continued decline in revenues from the legacy content business with
growth in revenues from the Streams Data platform.
Group revenue for the year ended 30 June 2021 was £395k (2020: £636k). The
gross profit of £222k (2020: £163k) increased by 36%. The gross profit
margin increased from 25.6% to 56.2% as a result of the growth of the Streams
Data business.
Mobile Operator sales
Mobile Operator revenues from the legacy content business were generated
mainly in Argentina, with small contributions from Mexico and India. The
Argentine Peso devalued significantly during the period, affecting the
revenues when expressed in GBP. We continue to work with our longest standing
billing partner locally, and throughout the year this remained the foundation
of the content business.
The Group announced the first customer for the Streams Data platform in April
2020, the National Emergencies Trust, with first revenues invoiced shortly
before the year end of June 2020. During the year to June 2021 revenues grew
to £137k (2020: £6k), all from Enterprise customers which receive a bespoke
service.
Sales by Territory
Operations in Argentina were extremely challenging in the year as a result of
general market conditions and regulation in the local market for mobile
content subscriptions. Revenues in Argentina decreased 15.8% in Argentine
Pesos terms from AR$36m to AR$30m. As a result of the Peso devaluation in the
year of 35%, the revenues expressed in Sterling show a 54% decrease from
£493k to £229k, equating to 46.4% of Group revenues.
Revenues in India represented 2.4% of Group revenues. Indian revenues have
been reducing due to the reduction in marketing campaigns and significant
market changes.
Revenues in the UK generated by Streams Data grew to £136k (2020: £6k),
representing 34.7% of Group revenues. The remainder of Group revenues in the
UK were generated by KrunchData.
Financial review
Group revenue for the year ended 30 June 2021 was £395k, a 37.8% decrease on
the previous year (2020: £636k).
Gross profit was £222k, an increase of 36% during the year (2020: £163k).
The gross profit margin increased from 25.6% to 56.2% on account of increased
revenue of the Streams data business.
The Depreciation charge was £ 95k (2020: £Nil). The amortisation charge
comprises the amortisation of intangible assets, the useful lives of which are
5 years (2020: £Nil).
Selling, marketing and administrative expenses were £50k, (2020: £Nil).
The Group recorded a loss after tax and before minority interests of £1,017k
for the year ended 30 June 2021 (2020 loss: £1,563k of which £953k was loss
on derecognition of subsidiaries). Basic earnings per share decreased to a
loss of 0.070 pence per share (2020: loss of 0.379 pence per share). Adjusted
earnings per share (excluding interest, depreciation, amortisation,
impairments and share compensation expense) decreased to a loss of 0.070 pence
per share (2020: loss of 0.379 pence per share).
The Group had cash of £1.715m at 30 June 2021, with a bank debt (Bounce Back
Loan) of £50k. The loan was used for Krunch working capital. (2020: £1.34m
of cash with no debt).
Key performance indicators ("KPI's")
The KPIs used by the Group are Gross profit as a percentage of revenue,
Trading EBITDA**, and variances in revenue and profit. These KPIs are reviewed
on a regular basis, at both the business unit and country level, and managed
largely by reference to budgets and reforecasts.
Earnings before tax, interest, amortisation, depreciation, share compensation
expense and impairment of assets (Trading EBITDA) is calculated by adding back
all tax, interest, amortisation, depreciation, share compensation expense and
impairment of assets entries in the consolidated income statement to profit
after tax.
Gross profit as a percentage of revenue is a measure of our profitability.
Gross profit was £222k for the year ended on 30 June 2021 (2020: £163k). The
Gross profit margin was 65% for the year ended on 30 June 2020 (2020: 25.6%).
Trading EBITDA was a loss of £941k for the year ended on 30 June 2021 (2020:
loss of £610k).
**EBITDA is a non-IFRS measure and is calculated as profit before tax,
interest, amortisation, depreciation, share compensation expense and
impairment of assets.
Strategy
The Group's principal business remains the generation of revenues through
relationships with mobile operators and content aggregators, using the Group's
expertise in selling content to consumers in developing markets. Since the
year end, using the Stream Data platform and in partnership with Quanta Media
Group, the Company has launched its LiveScores football 365 service in Mexico,
Argentina and Brazil. These launches have enabled the Group to reinvigorate
and reverse the decline of the content business.
In November 2019 the Company announced that it would launch a new data insight
and intelligence platform, called Streams, based on licensing of the
KrunchData platform. The Streams business provides bespoke services to the B2B
(business to business) market and targets customers in the US, LatAm and
Europe. Following the 2020 year end, the Company announced the launch of the
Streams SaaS ("Software as a Service") platform on 6 July, and since 14
October customers have been able to access the service and pay for it online.
The Board believes that the LiveScores services and Streams Data offering
create significant opportunities for the Company to deliver growth in
shareholder value via newly developed products and services. The main focus
for the current year will be growing and developing the product and sales
pipelines for these businesses.
Share Issue
As a result of warrant exercises by shareholders, the Group issued 4,100,000
shares at a value of 0.5 pence per share and 4,000,000 shares in October 2020
and a further 8,500,000 and 11,061,946 shares at 0.2 pence and 0.13 pence per
share respectively.
In March 2021 the Group issued 880,000,000 shares at a value of 0.25 pence per
share in a Placing to investors, raising £2.2m before expenses.
In March 2021 the Group issued 90,384,615 shares at 0.26 pence per share to
the owners of KrunchData Limited as part of the agreement to acquire 49% of
KrunchData Limited.
In April 2021, as a result of warrant exercises by shareholders, the Group
issued 14,062,500 shares at a value of 0.08 pence per share.
In April 2021 the Group issued 182,812,500 shares at 0.08 pence per share to
Directors and Senior Managers to cover their net remuneration from November
2019 to 30 March 2021.
In June 2021 the Group issued 11,053,480 shares at 0.25 pence per share to
Directors and Senior Managers to cover their net remuneration from 1 April to
30 June 2021.
Principal risks and uncertainties
The nature of the Group's business and strategy makes it subject to a number
of risks.
The Directors have set out below the principal risks facing the business.
Contracts with Mobile Network Operators (MNOs)
While Mobile Streams maintains relationships with numerous MNOs in the various
territories, a small number of operators account for a high portion of the
Group's business. The Group is seeking to mitigate this risk by broadening its
overall offering.
Contracts with rights holders
The majority of content provided by Mobile Streams is licensed from rights
holders. While Mobile Streams is not dependent on any single rights holder for
its entertainment content, termination, non-renewal or significant
renegotiation of a contract could result in lower revenue.
The Group continues to enter into new content licensing arrangements to
mitigate these risks.
Competition
Competition from alternative providers could adversely affect operating
results through either price pressures, or lost custom. Products and pricing
of competitors are continuously monitored to ensure the Group is able to react
quickly to changes in the market.
Fluctuations in currency exchange rates
Approximately 65% of the Group's revenue relates to operations outside the UK.
The Group is therefore exposed to foreign currency fluctuations and the
financial condition of the Group may be adversely impacted by foreign currency
fluctuations. Argentina had an inflation rate of 50.2% for the period July
2020 to June 2021 and the Argentinian economy is designated as
hyper-inflationary. See note 17 "Foreign currency risk"
The Group has operations in Latin America and India. As a result, it faces
both translation and transaction currency risks.
Currency exposure is not currently hedged, though the Board continuously
reviews its foreign currency risk exposure and potential means of combating
this risk.
Dependencies on key executives and personnel
The success of the business is substantially dependent on the Directors and
senior management team. The risks have been mitigated by strengthening the
Board and management team during the year.
Technology risk
A significant portion of the future revenues are dependent on the Group's
technology platforms. Instability or interruption of availability for an
extended period could have an adverse impact on the Group's financial
position.
Mobile Streams makes use of market leading cloud based infrastructure, and
where necessary has invested in resilient hardware architecture, and continues
to maintain software control processes to minimise this risk.
Management controls and reporting procedures and execution
The ability of the Group to implement its strategy in a competitive market
requires effective planning and management control systems. The Group's
future growth will depend upon its ability to expand whilst improving exposure
to operational, financial and management risk.
Going concern risk
In common with the Going Concern disclosures in the Group financial
statements, the Company financial statements have been prepared on a going
concern basis, which assumes that the Group and the Company will continue in
operational existence for the foreseeable future, being 12 months from the
date of sign-off of these accounts.
The Group and Company use annual budgeting, forecasting and regular
performance reviews to assess the longer-term profitability of the Group and
make strategic and commercial changes as required to ensure that cash
resources are maintained.
After consideration of the above, and as explained in greater detail in the Directors' Report and Note 1 of these accounts, the Directors consider that the continued adoption of the going concern basis is appropriate.
Financial risk management objectives and policies
The Group uses various financial instruments. These include cash and various
items, such as trade receivables and trade payables that arise directly from
its operations. The numerical disclosures relating to these policies are set
out in the notes to the financial statements.
The existence of these financial instruments exposes the Group to a number of
financial risks, which are described in more detail below. The Group does
not currently use derivative products to manage foreign currency or interest
rate risks.
The main risks arising from the Group's financial instruments are market risk,
currency risk, liquidity risk and credit risk. The Directors review and agree
policies for managing each of these risks and they are summarised below.
These policies have remained unchanged from previous periods.
Market risk
Market risk encompasses three types of risk, being currency risk, fair value
interest rate risk and price risk. In this review interest rate and price risk
have been ignored as they are not considered material risks to the business.
Liquidity risk
The Group seeks to manage financial risk by ensuring sufficient liquidity is
available to meet foreseeable needs and to invest cash assets safely and
profitably.
Other than the £50k Bounce Back Loan taken out by KrunchData to use for
working capital needs, the Group currently has no borrowing arrangements in
place and prepares cash flow forecasts which are reviewed at Board meetings to
monitor liquidity.
Credit risk
The Group's principal financial assets are bank deposits, cash and trade
receivables. The credit risk associated with the bank deposits and cash is
limited as the counterparties have high credit ratings assigned by
international credit-rating agencies. The principal credit risk arises
therefore from the Group's trade receivables. Most of the Group's trade
receivables are large mobile network operators or media groups. Whilst
historically credit risk has been low management continuously monitors its
financial assets and performs credit checks on prospective partners.
Revenues
Revenues in Argentina decreased 15.8% in Argentine Pesos terms from AR$36m to
AR$30m. As a result of the Peso devaluation in the year of 35%, the revenues
expressed in Sterling show a 54% decrease from £493k to £229k, equating to
58.0% of Group revenues.
Revenues in India represented 3.0% of the revenues of the Group. The Indian
Rupee devalued during the last 12 months with a devaluation of 18% to the
British Pound.
Future developments
In November 2019 the Company announced that it would launch a new data insight
and intelligence platform, called Streams, based on licensing of the
KrunchData platform. The Streams business provides bespoke services to the B2B
(business to business) market and targets customers in the US, LatAm and
Europe. The Streams business secured its first paying client in April 2020,
with further clients signed in June 2020. Following the year end, the Company
announced the launch of the Streams SaaS ("Software as a Service") platform on
6 July 2020, and since 14 October 2020 customers have been able to access the
service and pay for it online.
Since the year end, using the Stream Data platform and in partnership with
Quanta Media Group ("QMG" or "Quanta"), the Company has launched its
LiveScores football 365 service in Mexico, Argentina and Brazil. These
launches have enabled the Group to reinvigorate and reverse the decline of the
content business.
The Board believes that the LiveScores services and Streams Data offering
create significant opportunities for the Company to deliver growth in
shareholder value via newly developed products and services. The main focus
for the current year will be growing and developing the product and sales
pipelines for these businesses.
Impact of Brexit
The UK's exit from the European Union has not affected the Group materially at
an operational level, as almost all of the Group's revenues are derived from
customers based outside the EU.
Section 172 Companies Act disclosure
When making decisions, the Directors of the Company must act in a way they
consider, in good faith, is most likely to promote the success of the Company
for the benefit of its members as a whole, while also considering the broad
range of stakeholders who interact with and are impacted by the business.
Throughout the year, while discharging their duties, section 172(1) requires a
Director to have regard, amongst other matters, to the:
· likely consequences of any decisions in the long term
· interests of the company's employees
· need to foster the company's business relationships with
suppliers, customers and others
· impact of the company's operations on the community and
environment
· desirability of the company maintaining a reputation for high
standards of business conduct, and
· need to act fairly as between members of the company.
In discharging their section 172(1) duties, the Directors have had regard to
the factors set out above, as well as other factors relevant to the decisions
being made. The Board acknowledges that not all decisions made will
necessarily result in a positive outcome for all stakeholders, nevertheless
the Board aims to ensure that the decisions made are consistent and intended
to promote the Company's long-term success.
Examples of how the Directors have engaged with the Company's stakeholders
with regard to section 172(1) are detailed below:
Shareholders
The Board aims to build long term shareholder value by pursuing the stated
strategy. RNS updates are provided as required, and in addition Directors
provide regular interviews and updates, and respond to all queries received
from investors, all within the necessary regulatory and commercial
constraints.
Employees
The Board strives to maintain and develop a culture where all employees feel
valued and included. The Board has engaged with employees, within the limits
resulting from the Covid-19 pandemic. The company supports the professional
and personal development of employees, which are viewed as fundamental to the
continued success of the company.
Suppliers, customers and others
The Board recognises that it is crucial that the company delivers a reliable
service to its customers. Strong relationships with suppliers are maintained,
including by seeking to pay suppliers within their agreed terms wherever
possible.
The Board regards compliance will all relevant regulatory frameworks with the
upmost importance. As a data and communications business it is essential that
the company fully complies with data protection and other regulations across
all territories in which it operates. Audit and Compliance functions report to
the Board on a regular basis. Training and monitoring are continually
developed and open communication between the Board and stakeholders is
encouraged.
Community and environment
Mobile Streams is aware of the different environments in which it operates.
Furthermore, the company has responded pragmatically to the Covid-19 pandemic,
in particular to ensure the safety of our employees and other key stakeholder
groups mentioned above.
The Strategic Report was approved by the Board and signed on its behalf by:
Bob Moore
Chairman
30 December 2021
Items dealt with in the Strategic Report
• Business review
• Principal risks and uncertainties
• Future developments
The principal activities of the Group are the sale of content for distribution
on mobile devices and provision of data insight and intelligence platforms and
services. The Company is registered in England and Wales under company
number 03696108.
Results and dividends
The trading results and the Group's financial position for the year ended 30
June 2021 are shown in the attached financial statements, and are discussed
further in the Strategic Report.
The Directors have not proposed a dividend for this year (2020: £Nil).
Directors and their interests
The Directors of the Company (the "Board" or the "Directors"), who served
during the year, together with their beneficial interests in the ordinary
shares of the Group, as at 30 June 2020, are set out below. All Directors
served on the Board throughout the year.
Shares held or controlled by Directors
Ordinary Ordinary
shares of shares of
0.01 pence each 0.01 pence each
30 June 2021 30 June 2020
Nigel Burton 94,218,906 8,849,557
Mark Epstein 61,369,350 -
Charles Goodfellow 38,773,196 -
Bob Moore (appointed 23 July 2021) - -
Sri Ramakrishna Uthayanan (appointed 23 July 2021) - -
The current Directors of the Company are listed below in the Corporate
Governance Statement.
The remuneration of each of the Directors and Senior Management for the period
ended 30 June 2021 is set out below:
Year to 30 June 2021 Year to 30 June 2020
Salary Fees Benefits Post employment benefits Other Long Term benefits Termination Benefits Total Total
£'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
M Epstein 125 - - - - - 125 23
T Gutteridge (#) 125 - - - - - 125 23
A Jamieson (#) 125 - - - - - 125 23
C Goodfellow 125 - - - - - 125 23
N Burton 125 - - - - - 125 23
R Moore ~ - - - - - - - -
R Uthayanan ~ - - - - - - - -
E Benasso * 42 - - - - - 42 50
Total 667 - - - - - 667 165
* Resigned 1 October 2019
~ Appointed 23 July 2021
(# ) Senior management (non-Board role)
Benefits comprise medical health insurance. All items are considered short
term in nature.
The three Directors appointed in November 2019, namely Nigel Burton, Charles
Goodfellow and Mark Epstein and two senior employees Annabel Jamieson and Tom
Gutteridge, all agreed to annual remuneration of £30,000 each, and also
agreed to accept payment for their services in Ordinary Shares, subject to
deduction and payment of all necessary taxes, until such time as the Directors
are satisfied that the Company is able to make these payments out of operating
cashflow. As outlined in the Placing Circular dated 30 March 2020, to defer
the cash costs (principally National Insurance and PAYE taxes) to the Company
it was agreed that the issue of these Ordinary Shares would be deferred until
the interim results to 31 December 2020 were issued in early 2021, at the then
Placing Price of 0.08p. Whilst the number of shares to be issued remained
fixed, the taxable value of these shares at the time of issue on 30 June 2021,
had increased as a result of the intervening share price rise. The table
includes the accrued directors' fees for the year corresponding to the period
from 26 November 2019 to 30 June 2020, reflecting the full taxable value of
these fees. As explained in the RNS dated 30 April 2021, with effect from 1
April 2021, the above named Directors and senior employees reverted to their
original contractual arrangements, which state that until such time as the
Board determines otherwise, fees will be paid quarterly or half yearly in
Ordinary Shares, priced at the Volume Weighted Average Price ("VWAP") of the
Ordinary Shares for the period to which the payment relates, after deduction
and payment of all necessary taxes.
Going Concern
In common with the Going Concern disclosures in the Group financial
statements, the Company financial statements have been prepared on a going
concern basis, which assumes that the Group and the Company will continue in
operational existence for the foreseeable future, being 12 months from the
date of sign-off of these accounts.
The Group and Company use annual budgeting, forecasting and regular
performance reviews to assess the longer-term profitability of the Group and
make strategic and commercial changes as required to ensure that cash
resources are maintained. Although there was a significant fall in revenues
and a loss for the year ending 30 June 2021, the Group actively manages its
use of cash, particularly marketing and other expenditure.
During the year the Directors kept costs carefully controlled whilst
continuing to grow the Streams data insight and intelligence platform. The
Streams business provides bespoke services to the B2B (business to business)
market and targets customers in the US, LatAm and Europe. The Streams business
secured its first paying client in April 2020, with further clients signed in
June 2020. During the year the Company announced the launch of the Streams
SaaS ("Software as a Service") platform on 6 July 2020, and since 14 October
2020 customers have been able to access the service and pay for it online.
Further enterprise level clients have also been secured. The Group's forecasts
assume that Streams will represent a growing proportion of revenues. Since the
year end additional revenues have been generated using the Stream Data
platform and in partnership with Quanta Media Group ("QMG" or "Quanta"),
through the Company's launch of its LiveScores football 365 service in Mexico,
Argentina and Brazil. These launches have enabled the Group to reinvigorate
and reverse the decline of the content business.
The Directors have prepared a cashflow forecast which indicates that existing
resources are expected to cover the Company's working capital requirements for
the foreseeable future.
After consideration of the above, the Directors consider that the continued
adoption of the going concern basis is appropriate - See note 1.
Directors' responsibilities statement
The Directors are responsible for preparing the Strategic Report, the
Director's Report and the Financial Statements in accordance with applicable
laws and regulations.
Company law requires the Directors to prepare financial statements for each
financial year. Company law requires the Directors to prepare Group and
Company Financial Statements for each financial year. The Directors are
required by the AIM Rules of the London Stock Exchange to prepare Group
Financial Statements in accordance with International Financial Reporting
Standards ("IFRS") as adopted by the United Kingdom ("UK") and have elected
under company law to prepare the Company Financial Statements in accordance
with IFRS as adopted by the UK.
Under company law the Directors must not approve the Financial Statements
unless they are satisfied that they give a true and fair view of the state of
affairs and profit or loss of the Company and Group for that period. In
preparing these Financial Statements, the Directors are required to:
· select suitable accounting policies and then
apply them consistently,
· make judgements and estimates that are reasonable
and prudent,
· state whether applicable UK Accounting Standards
and lFRSs have been followed, subject to any material departures disclosed and
explained in the financial statements, and
· prepare the financial statements on the going
concern basis unless it is inappropriate to presume that the Group and the
Company will continue in business.
The Directors are responsible for keeping adequate accounting records that are
sufficient to show and explain the Group's and the Company's transactions and
disclose with reasonable accuracy at any time the financial position of the
Group and the Company and enable them to ensure that the Financial Statements,
and the Directors' Remuneration Report comply with the Companies Act 2006 and
Article 4 of the IAS Regulation. They are also responsible for safeguarding
the assets of the Group and Company and hence for taking reasonable steps for
the prevention and detection of fraud and other irregularities.
The Directors confirm that:
· So far as each Director is aware, there is no
relevant audit information of which the Group's auditor is unaware, and
· The Directors have taken all steps that they
ought to have taken as directors to make themselves aware of any relevant
audit information and to establish that the auditor is aware of that
information.
This confirmation is given pursuant to section 418 of the Companies Act 2006
and should be interpreted in accordance with and subject to those provisions.
The Directors are responsible for the maintenance and integrity of the
corporate and financial information included on the Group's website.
Legislation in the United Kingdom governing the preparation and dissemination
of financial statements may differ from legislation in other jurisdictions.
Auditor
PKF Littlejohn UK LLP have indicated their willingness to continue in office.
Corporate Governance Statement
The Board is committed to maintaining high standards of corporate governance.
The Company's Corporate Governance Statement, which includes full details of
the recognised corporate governance code which the Company complies with and
an explanation of any departure from the code, is maintained on its website,
as required by AIM rules. The information is reviewed at least once per annum
and the website includes the date on which the information was last reviewed.
The most recent review has been undertaken during the process of preparing the
Annual Report and Financial Statements.
As a company whose shares are traded on AIM, the Board seeks to comply with
the Quoted Companies Alliance's Corporate Governance Code ("the QCA Code"). In
addition, the Directors have adopted a code of conduct for dealings in the
shares of the Company by directors and employees and are committed to
maintaining the highest standards of corporate governance. Nigel Burton, in
his capacity as Non-Executive Director, has assumed responsibility for
ensuring that the Company has appropriate corporate governance standards in
place and that these requirements are followed and applied within the Company
as a whole. The corporate governance arrangements that the Board has adopted
are designed to ensure that the Company delivers long term value to its
shareholders and that shareholders have the opportunity to express their views
and expectations for the Company in a manner that encourages open dialogue
with the Board. The Board recognises that its decisions regarding strategy and
risk will impact the corporate culture of the Company as a whole and that this
will impact the performance of the Company. The Board is very aware that the
tone and culture set by the Board will greatly impact all aspects of the
Company as a whole and the way that employees behave. A large part of the
Company's activities is centred upon what needs to be an open and respectful
dialogue with employees, clients and other stakeholders. Therefore, the
importance of sound ethical values and behaviours is crucial to the ability of
the Company successfully to achieve its corporate objectives. The Board places
great importance on this aspect of corporate life and seeks to ensure that
this flows through all that the Company does.
No material governance related matters occurred during the financial year
ended 30 June 2021.
The appointment of Bob Moore and Sri Ramakrishna Uthayanan as Directors on 23
July was announced on 26 July 2021.
The Company's Corporate Governance report, which can also be found on the
website, follows.
Corporate Governance Report
The QCA Code sets out 10 principles that should be applied. These are listed
below together with a short explanation of how the Company applies each of the
principles:
Principle One
Business Model and Strategy
The Board has concluded that the highest medium and long term value can be
delivered to its shareholders by the adoption of a single strategy for the
Company. The Company will seek to grow its business organically, aided by the
partnership with Quanta and will seek out further complementary partnerships
and acquisitions that create enhanced value.
Principle Two
Understanding Shareholder Needs and Expectations
The Board is committed to maintaining good communication and having
constructive dialogue with its shareholders. The Company has close ongoing
relationships with its private shareholders. Institutional shareholders and
analysts have the opportunity to discuss issues and provide feedback at
meetings with the Company. In addition, all shareholders are encouraged to
attend the Company's Annual General Meeting. Investors also have access to
current information on the Company though its website, www.mobilestreams.com,
and via Mark Epstein, CEO who is available to answer investor relations
enquiries.
Principle Three
Considering wider stakeholder and social responsibilities
The Board recognises that the long-term success of the Company is reliant upon
the efforts of the employees of the Company and its contractors, suppliers,
regulators and other stakeholders. The Board has put in place a range of
processes and systems to ensure that there is close oversight and contact with
its key resources and relationships. For example, all employees of the Company
participate in a structured Company-wide annual assessment process which is
designed to ensure that there is an open and confidential dialogue with each
person in the Company to help ensure successful two way communication with
agreement on goals, targets and aspirations of the employee and the Company.
These feedback processes help to ensure that the Company can respond to new
issues and opportunities that arise to further the success of employees and
the Company. The Company has close ongoing relationships with a broad range of
its stakeholders and provides them with the opportunity to raise issues and
provide feedback to the Company.
Principle Four
Risk Management
In addition to its other roles and responsibilities, the Audit and Compliance
Committee is responsible to the Board for ensuring that procedures are in
place and are being implemented effectively to identify, evaluate and manage
the significant risks faced by the Company. The risk assessment matrix below
sets out those risks, and identifies their ownership and the controls that are
in place. This matrix is updated as changes arise in the nature of risks or
the controls that are implemented to mitigate them. The Audit and Compliance
Committee reviews the risk matrix and the effectiveness of scenario testing on
a regular basis. The following principal risks and controls to mitigate them,
have been identified:
Activity Risk Impact Control(s)
Management Recruitment and retention of key staff Reduction in operating capability Stimulating and safe working environment
Balancing salary with longer term incentive plans
Regulatory adherence Breach of rules Censure or withdrawal of authorisation Strong compliance regime instilled at all levels of the Company
Strategic Damage to reputation Inability to secure new capital or clients Effective communications with shareholders coupled with consistent messaging
to our customers
Robust compliance
Secure off-site storage of data
Loss of key operational and financial data
Inadequate disaster recovery procedures
Financial Liquidity, market and credit risk Inability to continue as going concern Robust capital management policies and procedures
Reduction in asset values Appropriate authority and investment levels as set by Treasury and Investment
Policies
Inappropriate controls and accounting policies Incorrect reporting of assets
Audit and Compliance Committee
The Directors have established procedures, as represented by this statement,
for the purpose of providing a system of internal control. An internal audit
function is not considered necessary or practical due to the size of the
Company and the close day to day control exercised by the executive directors.
However, the Board will continue to monitor the need for an internal audit
function. The Board works closely with and has regular ongoing dialogue with
the Company financial controller and has established appropriate reporting and
control mechanisms to ensure the effectiveness of its control systems.
Principle Five
A Well Functioning Board of Directors
As at the date hereof the Board comprised, the CEO Mark Epstein, Finance
Director Sri Ramakrishna Uthayanan and three Non-Executive Directors, Bob
Moore (Chairman), Nigel Burton and Charles Goodfellow. Biographical details of
the current Directors are set out within Principle Six below. Executive and
Non-Executive Directors are subject to re-election at intervals of no more
than three years. The letters of appointment of all Directors are available
for inspection at the Company's registered office during normal business
hours.
The Board meets at least eight times per annum. It has established an Audit
and Compliance Committee a Remuneration Committee, and a Nominations
Committee, particulars of which appear hereafter. The Non-Executive Directors
are considered to be part time but are expected to provide as much time to the
Company as is required. The Board notes that the QCA recommends a balance
between executive and non-executive Directors and recommends that there be two
independent non-executives. Bob Moore, Nigel Burton and Charles Goodfellow are
considered to be Independent Directors. Further commentary in relation to the
board's assessment of independence is set out within Principle Six below.
As the Company grows and develops the board will periodically review its
corporate governance framework to ensure it remains appropriate for the size,
complexity and risk profile of the Company
Attendance at Board and Committee Meetings
The Company shall report annually on the number of Board and committee
meetings held during the year and the attendance record of individual
Directors. To date in the current financial year the Directors have a 100%
record of attendance at such meetings. In order to be efficient, the Directors
meet formally and informally both in person and by telephone. During the year
there were 8 Board meetings, with all directors being present at all meetings.
The volume and frequency of such meetings is expected to continue at a similar
rate. The Audit and Compliance Committee met three times and the Remuneration
Committee, met twice, in each case with all members present.
Principle Six
Appropriate Skills and Experience of the Directors
The Board currently consists of five Directors led by Chairman Bob Moore and,
in addition, the Company has contracted the outsourced services of Pennsec
Limited to act as the Company Secretary. The Company believes that the current
balance of skills in the Board as a whole, reflects a very broad range of
commercial and professional skills across geographies and industries and each
of the Director's has experience in public markets. As demonstrated below in
the descriptions of each Director, the Board has the necessary commercial,
financial and legal skills required for the effective leadership of the Group.
The Board recognises that it currently has a limited diversity and this will
form a part of any future recruitment consideration if the Board concludes
that replacement or additional directors are required.
Each Director undertakes a mixture of formal and informal continuing
professional development as necessary to ensure that their skills remain
current and relevant to the needs of the Group.
Mr Robert Dennis Moore, Non-Executive Chairman
Bob is a UK qualified lawyer (Barrister, called to the bar at Middle Temple
1981) with over 35 years' business, commercial and legal experience, including
as Head of International Legal Affairs at Enterprise Oil plc (a UK FTSE 100
company until its acquisition by Shell in 2002) and as Co-founder and
Commercial Director of Granby Oil & Gas plc, which was listed on AIM from
2005 until its sale in 2008. Bob has subsequently co-founded, and is Managing
Director of, several private engineering and energy businesses based in the UK
and Luxembourg.
Mr Charles Edouard Goodfellow, Non-Executive Director
Charles Goodfellow has over 30 years' experience in the London capital
markets, having worked initially in equity sales and then in corporate finance
for various London investment banks and corporate finance specialists. He
specialises in assisting smaller companies across a range of sectors in
raising growth capital, as well as targeting industry partners capable of
taking strategic stakes and control.
Dr Nigel John Burton, Non-Executive Director
Following over 14 years as an investment banker at leading City institutions
including UBS Warburg and Deutsche Bank, including as the Managing Director
responsible for the energy and utilities industries, Nigel spent 15 years as
Chief Financial Officer or Chief Executive Officer of a number of private and
public companies. Nigel is currently a Non-Executive Director of BlackRock
Throgmorton Trust plc and AIM listed companies DeepVerge plc, eEnergy Group
plc, Location Sciences plc and Microsaic Systems plc.
Mr Mark Alexander Epstein, Chief Operating Officer
Mark is an experienced CEO, director, entrepreneur, expert in marketing,
communications, technology and mobile. Mark is the co-founder of Krunch.ai a
next generation insight and intelligence platform, IgniteAMT a digital
transformation company and IgniteCAP an incubation and investment business.
Mark also co-founded and was CEO on its AIM listing of The People's Operator
PLC, a cause-based mobile phone network that had operations the UK and USA.
Prior to that Mark co-founded Mass1 which he grew into one of the UK's most
successful campaign agencies. He has also held numerous senior management
positions in his career.
Sri Ramakrishna Uthayanan, Finance Director
Rama is a UK qualified accountant with over 35 years' audit and accounting
experience, including as Finance Director of AIM listed The People's Operator
plc from 2016 until 2019. He has been Finance Director at KrunchData Limited,
the Company's 49% subsidiary since December 2018.
Mr Moore, Dr Burton and Mr Goodfellow are considered to be independent
directors of the Company. In coming to this conclusion, the board has taken a
number of matters into consideration including:
· the absence of previous employment or material business
relationships with the Company and its Shareholders;
· that none are party to any performance related share schemes; and
service length with the Company.
Principle Seven
Evaluation of Board Performance
The Board has undertaken an internal review of the Board, the Committees and
individual Directors, in the form of peer appraisal and discussions, to
determine their effectiveness and performance as well as the Directors'
continued independence.
The evaluation concluded that the Board demonstrates the appropriate level of
skills, knowledge and performance for the size and nature of the Group. The
Directors will continue to review the need to strengthen the Board as the
Group develops.
Principle Eight
Corporate Culture
The Board recognises that its decisions regarding strategy and risk will
impact the corporate culture of the Company as a whole and that this will
impact the performance of the Company. The corporate governance arrangements
that the Board has adopted are designed to ensure that the Company delivers
long term value to its shareholders and that shareholders have the opportunity
to express their views and expectations for the Company in a manner that
encourages open dialogue with the Board. The Board recognises that their
decisions regarding strategy and risk will impact the corporate culture of the
Company as a whole and that this will impact the performance of the Company.
The Board is very aware that the tone and culture set by the Board will
greatly impact all aspects of the Company as a whole and the way that
employees behave. A large part of the Company's activities is centred upon
what needs to be an open and respectful dialogue with employees, clients and
other stakeholders. Therefore, the importance of sound ethical values and
behaviours is crucial to the ability of the Company to successfully achieve
its corporate objectives.
The Board places great import on this aspect of corporate life and seeks to
ensure that this flows through all that the Company does. The Directors
consider that at present the Company has an open culture facilitating
comprehensive dialogue and feedback and enabling positive and constructive
challenge. There is frequent dialogue between the Directors and senior
management of the principal operating subsidiaries. The Board monitors the
corporate culture through a mix of formal and informal feedback, based on
which the Board is confident that a healthy culture consistent with the
principles adopted exists.
The Company has adopted, with effect from the date on which its shares were
admitted to AIM, a code for Directors' and employees' dealings in securities
which is appropriate for a company whose securities are traded on AIM and is
in accordance with the requirements of the Market Abuse Regulation which came
into effect in 2016.
Principle Nine
Maintenance of Governance Structures and Processes
Ultimate authority for all aspects of the Company's activities rests with the
Board, the respective responsibilities of the Chairman and Chief Operating
Officer arising as a consequence of delegation by the Board. The Board has
adopted appropriate delegations of authority which set out matters which are
reserved to the Board. The Chairman is responsible for the effectiveness of
the Board, while management of the Company's business and primary contact with
shareholders has been delegated by the Board to the Chief Executive Officer.
Audit and Compliance Committee
The Audit and Compliance Committee comprises Bob Moore, who chairs this
committee, and Charles Goodfellow. The Audit and Compliance Committee has
primary responsibility for monitoring the quality of internal controls and
ensuring that the financial performance of the Company is properly measured
and reported. It receives reports from the executive management and auditors
relating to the interim and annual accounts and the accounting and internal
control systems in use throughout the Company. The Audit and Compliance
Committee shall meet not less than twice in each financial year and it has
unrestricted access to the Company's auditors.
Remuneration Committee
The Remuneration Committee comprises Bob Moore, who chairs this committee, and
Charles Goodfellow. The Remuneration Committee reviews the performance of the
executive directors and employees and makes recommendations to the Board on
matters relating to their remuneration and terms of employment. The
Remuneration Committee also considers and approves the granting of share
options pursuant to the share option plan and the award of shares in lieu of
bonuses pursuant to the Company's Remuneration Policy.
Nominations Committee
The Nominations Committee comprises Bob Moore, who chairs this committee, and
Charles Goodfellow.
Non-Executive Directors
The Board has adopted guidelines for the appointment of Non-Executive
Directors which have been in place and which have been observed throughout the
year. These provide for the orderly and constructive succession and rotation
of the Chairman and non-executive directors insofar as both the Chairman and
non-executive directors will be appointed for an initial term of three years
and may, at the Board's discretion believing it to be in the best interests of
the Company, be appointed for subsequent terms. The Chairman may serve as a
Non-Executive Director before commencing a first term as Chairman.
In accordance with the Companies Act 2006, the Board complies with: a duty to
act within their powers; a duty to promote the success of the Company; a duty
to exercise independent judgement; a duty to exercise reasonable care, skill
and diligence; a duty to avoid conflicts of interest; a duty not to accept
benefits from third parties and a duty to declare any interest in a proposed
transaction or arrangement.
Principle Ten
Shareholder Communication
The Board is committed to maintaining good communication and having
constructive dialogue with its shareholders. The Company responds to all
shareholders who contact the Directors, and as a result has positive ongoing
relationships with a wide range of shareholders. All shareholders and analysts
have the opportunity to discuss issues and provide feedback at meetings with
the Company. The Company also provides shareholder updates whenever
appropriate using both regulatory and other channels. In addition, all
shareholders are encouraged to attend the Company's Annual General Meeting.
Investors also have access to current information on the Company though its
website, www.mobilestreams.com, and via Mark Epstein, CEO, who is available to
answer investor relations enquiries.
The Company includes, when relevant, in its annual report, any matters of note
arising from the audit or remuneration committees.
On behalf of the Board
Bob Moore
Chairman
30 December 2021
Opinion
We have audited the group financial statements of Mobile Streams Plc (the
'group') for the year ended 30 June 2021 which comprise the Consolidated
Statement of Comprehensive Income, the Consolidated Statement of Financial
Position, the Consolidated Statement of Changes in Equity and the Consolidated
Statements of Cash Flows and 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
accounting standards in conformity with the requirements of the Companies Act
2006.
In our opinion, the group financial statements:
· give a true and fair view of the state of the group's affairs as
at 30 June 2021 and of its loss for the year then ended;
· have been properly prepared in accordance with international
accounting standards in conformity with the requirements of the Companies Act
2006; and
· have been prepared in accordance with the requirements of the
Companies Act 2006.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing
(UK) (ISAs (UK)) and applicable law. Our responsibilities under those
standards are further described in the Auditor's responsibilities for the
audit of the financial statements section of our report. We are independent of
the group 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
In auditing the financial statements, we have concluded that the director's
use of the going concern basis of accounting in the preparation of the
financial statements is appropriate. Our evaluation of the directors'
assessment of the group's ability to continue to adopt the going concern basis
of accounting included reviewing and challenging managements prepared forecast
model and any scenario planning undertaken thereon.
Based on the work we have performed, we have not identified any material
uncertainties relating to events or conditions that, individually or
collectively, may cast significant doubt on the group's ability to continue as
a going concern for a period of at least twelve months from when the financial
statements are authorised for issue.
Our responsibilities and the responsibilities of the directors with respect to
going concern are described in the relevant sections of this report
Our application of materiality
The group materiality for the financial statements as a whole was set at
£38,800 (2020: £23,000) based on 4% of loss before tax (2020: 4% of loss
before tax). Loss before tax was used as the basis for materiality as the
group, following the continued management decision toward diversifying its
business model the group therefore being in a transitory state. Performance
materiality was calculated at 70% (£27,160, 2020: £16,100) of materiality
for the financial statements as a whole as there is still inherent risk within
the accounting function of the group.
We have agreed with those charged with governance that we would report any
individual audit difference in excess of £1,940 as well as differences below
this threshold that, in our view, warranted reporting on qualitative grounds.
Our approach to the audit
In designing our audit, we determined materiality and assessed the risk of
material misstatement in the group financial statements. In particular, we
looked at areas involving significant accounting estimates and judgements by
the directors including the valuation of share options. These areas were
however not considered to constitute Key Audit Matters. We also addressed the
risk of management override of internal controls, including evaluating whether
there was evidence of bias by the directors that represented a risk of
material misstatements due to fraud. Of the seven reporting components of the
group, a full scope audit was performed on the complete financial information
of four components (UK, Argentina, Streams Data and Krunch Data) and, for the
other components, a limited scope review was performed.
The group's key accounting function is based in Argentina and our audit was
performed from our office with regular contact with relevant personnel
throughout. No component auditors were used in the audit.
Key audit matters
Key audit matters are those matters that, in our professional judgment, were
of most significance in our audit of the financial statements of the current
period and include the most significant assessed risks of material
misstatement (whether or not due to fraud) we identified, including those
which had the greatest effect on: the overall audit strategy, the allocation
of resources in the audit; and directing the efforts of the engagement team.
These matters were addressed in the context of our audit of the financial
statements as a whole, and in forming our opinion thereon, and we do not
provide a separate opinion on these matters.
Key Audit Matter How the scope of our audit responded to the key audit matter
Acquisition Accounting (Referring to Krunch Data 49% interest) - Note 16
Based on our planning procedures we have determined there is a risk that the We performed the following procedures
acquisition of Krunch data has not been accounted for correctly in accordance
with IFRS 3 Business Combinations. § Reviewed the accounting treatment and considered whether it was in
accordance with IFRS 3
§ Obtained, reviewed and challenged management's assessment and valuation of
We have assessed the key underlying risks as. Goodwill and separately identifiable intangible assets acquired.
Accounting treatment and valuation of Goodwill and § Reviewed and challenged managements impairment assessment and ensured
identifiable intangible assets arising on acquisition correct treatment of any impairment incurred.
Management assessment of whether any impairment has been incurred on
these acquired assets and Goodwill at year end
Recoverability of Convertible Loan Note issued to Quanta Media Group - Note 22
A Convertible loan note was issued to Quanta Media Group (a £250k loan We performed the following procedures
intended to fund them through their pre-IPO phase, with a possible second
tranche of £250k) § Obtained and challenged management's assessment of recoverability
Based on our planning procedures we have determined there is a risk that the § Reviewed the Convertible Loan Note agreement and ensured the loan note was
balance is not fully recoverable and requires management judgement as to the correctly accounted for in accordance with the terms of the agreement
recoverability and any potential requirement to create a provision for the
balance § Challenged the underlying information and assumptions
Ensured the convertible loan note has been correctly accounted for in line
with signed agreement and financial reporting framework
Other information
The other information comprises the information included in the annual report,
other than the financial statements and our auditor's report thereon. The
directors are responsible for the other information contained within the
annual report. Our opinion on the group financial statements does not cover
the other information and, except to the extent otherwise explicitly stated in
our report, we do not express any form of assurance conclusion thereon. Our
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 course of 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 this gives rise to a material misstatement in the financial
statements themselves. If, based on the work we have performed, we conclude
that there is a material misstatement of this other information, we are
required to report that fact.
We have nothing to report in this regard.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of the audit:
· the information given in the strategic report and the directors'
report for the financial year for which the group financial statements are
prepared is consistent with the group financial statements; and
· the strategic report and the directors' report have been prepared
in accordance with applicable legal requirements.
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the group and its
environment obtained in the course of the audit, we have not identified
material misstatements in the strategic report or the directors' report.
We have nothing to report in respect of the following matters in relation to
which the Companies Act 2006 requires us to report to you if, in our opinion:
· certain disclosures of directors' remuneration specified by law
are not made; or
· we have not received all the information and explanations we
require for our audit.
Responsibilities of directors
As explained more fully in the directors' responsibilities statement, the
directors are responsible for the preparation of the group 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 group financial statements, the directors are responsible for
assessing the group'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 to
cease operations, or have no realistic alternative but to do so.
Auditor's responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial
statements as a whole are free from material misstatement, whether due to
fraud or error, and to issue an auditor's report that includes our opinion.
Reasonable assurance is a high level of assurance, but is not a guarantee that
an audit conducted in accordance with ISAs (UK) will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and
are considered material if, individually or in the aggregate, they could
reasonably be expected to influence the economic decisions of users taken on
the basis of these financial statements.
Irregularities, including fraud, are instances of non-compliance with laws and
regulations. We design procedures in line with our responsibilities, outlined
above, to detect material misstatements in respect of irregularities,
including fraud. The extent to which our procedures are capable of detecting
irregularities, including fraud is detailed below:
· We obtained an understanding of the group and the sector in which
it operates to identify laws and regulations that could reasonably be expected
to have a direct effect on the financial statements. We obtained our
understanding in this regard through discussions with management and
application of cumulative audit knowledge and experience of the sector.
· We determined the principal laws and regulations relevant to the
group in this regard to be those arising from AIM rules, Companies Act 2006
and local employment and tax law.
· We designed our audit procedures to ensure the audit team
considered whether there were any indications of non-compliance by the group
with those laws and regulations. These procedures included, but were not
limited to:
o enquiries of management and review of minutes.
· We also identified the risks of material misstatement of the
financial statements due to fraud. We considered, in addition to the
non-rebuttable presumption of a risk of fraud arising from management override
of controls, that the potential for management bias was identified in relation
to:
o the impairment of goodwill and intangible assets and we addressed this by
challenging the assumptions and judgements made by management when auditing
that significant accounting estimate; and
o the allocation of value between intangible assets acquired and goodwill on
the acquisition of Krunch and we addressed this by challenging the assumptions
and judgements made by management when auditing that significant accounting
estimate.
· As in all of our audits, we addressed the risk of fraud arising
from management override of controls by performing audit procedures which
included, but were not limited to: the testing of journals; reviewing
accounting estimates for evidence of bias; and evaluating the business
rationale of any significant transactions that are unusual or outside the
normal course of business.
Because of the inherent limitations of an audit, there is a risk that we will
not detect all irregularities, including those leading to a material
misstatement in the financial statements or non-compliance with regulation.
This risk increases the more that compliance with a law or regulation is
removed from the events and transactions reflected in the financial
statements, as we will be less likely to become aware of instances of
non-compliance. The risk is also greater regarding irregularities occurring
due to fraud rather than error, as fraud involves intentional concealment,
forgery, collusion, omission or misrepresentation.
A further description of our responsibilities for the audit of the financial
statements is located on the Financial Reporting Council's website at:
www.frc.org.uk/auditorsresponsibilities
(http://www.frc.org.uk/auditorsresponsibilities) . This description forms part
of our auditor's report.
Other matter
We have reported separately on the parent company financial statements of
Mobile Streams Pls for the year ended 30 June 2021.
Use of our report
This report is made solely to the company's members, as a body, in accordance
with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been
undertaken so that we might state to the company's members those matters we
are required to state to them in an auditor's report and for no other
purpose. To the fullest extent permitted by law, we do not accept or assume
responsibility to anyone, other than the company and the company's members as
a body, for our audit work, for this report, or for the opinions we have
formed.
Joseph Archer (Senior Statutory Auditor)
15 Westferry Circus
For and on behalf of PKF Littlejohn
LLP
Canary Wharf
Statutory
Auditor
London E14 4HD
30 December 2021
Year ended Year ended
30 June 30 June
2021 2020
£000's £000's
Revenue 13 395 636
Cost of sales 13 (173) (473)
Gross profit 13 222 163
Selling and marketing costs 13 (50) -
Administrative expenses * 13 (1,208) (773)
Operating Loss (1,036) (610)
Loss on derecognition of subsidiaries - (953)
Finance income 4 -
Loss before tax (1,032) (1,563)
Tax expense 7 - -
Loss for the year (1,032) (1,563)
Attributable to:
Equity shareholders of Mobile Streams plc (1,017) (1,563)
Non-Controlling interests (15) -
(1,032) (1,563)
Other comprehensive income (expense)
Amounts which may be reclassified to profit & loss
Exchange differences on translating foreign - 956
operations 24
Total comprehensive loss for the year attributable to equity shareholders of (1,032) (607)
Mobile Streams plc
Earnings per share Pence per share Pence per share
Basic earnings per share 6 (0.070) (0.379)
Diluted earnings per share 6 (0.070) (0.379)
* Administrative expenses include Depreciation, Amortisation and Impairment
£95k (year ended 30 June 2020: £Nil); and other administrative expenses
£1.1m (year ended 30 June 2020: £0.8m).
The financial statements were approved by the Board of Directors on 30
December 2021 and are signed on its behalf by:
Bob Moore
Chairman
Year ended Year ended
30 June 2021 30 June 2020
Note £000's £000's
Assets
Non-Current
Goodwill 21 360 -
Other intangible assets 21 569 -
Other asset 22 250 -
1,179 -
Current
Trade and other receivables 8 325 221
Cash and cash equivalents 9 1,715 1,340
2,040 1,561
Total assets 3,219 1,561
Equity
Called up share capital 11 567 382
Share premium 16,765 14,126
Translation reserve (3,050) (3,050)
Retained earnings (11,467) (10,463)
Equity attributable to equity holders of Mobile Streams plc 2,815 995
Non-Controlling Interest 1 -
Total equity 2,816 995
Current liabilities
Trade and other payables 10 353 566
Bank debt 23 50 -
403 566
Total liabilities 403 566
Total equity and liabilities 3,219 1,561
Called up share capital Share premium Translation reserve Retained earnings Non-Controlling Interest Total Equity
£000's £000's £000's £000's £000's £000's
Balance at 30 June 2019 280 12,610 (4,005) (8,974) - (89)
Balance at 1 July 2019 280 12,610 (4,005) (8,974) - (89)
Issue of shares 102 1,516 - 73 - 1,691
Transactions with owners 102 1.516 - 73 - 1,691
Loss for the 12 months ended 30 June 2020 - - - (1,563) - (1,563)
Exchange differences on translating foreign operations - - 955 - - 955
Total comprehensive loss for the year - - 955 (1,563) - (608)
Balance at 30 June 2020 382 14,126 (3,050) (10,463) - 995
Balance at 1 July 2020 382 14,126 (3,050) (10,463) - 995
Loss for the 12 months ended 30 June 2021 - - - (1,017) (15) (1,032)
382 14,126 (3,050) (11,480) (15) (37)
Transactions with owners
Warrants reserve - - - 13 - 13
New Equity 185 2,639 - - - 2,824
Non-controlling interest on acquisition of subsidiary - - - - 16 16
Balance at 30 June 2021 567 16,765 (3,050) (11,467) 1 2,816
Year ended Year ended
30 June 30 June
2021 2020
£000's £000's
Operating activities
Loss before taxation (1,032) (1,563)
Adjustments:
Amortisation of intangible assets 21 95 -
Interest received (4) -
Changes in trade and other receivables 8 (104) 126
Changes in trade and other payables 10 (213) 15
Profit (loss) on deregistration of subsidiaries - 953
Exchange differences 30 36
Total cash generated in operating activities (1,228) (433)
Investing activities
Additions to other intangible assets internal 21 (304) -
Acquisitions - consideration 16 (500) -
Acquisitions - cash acquired 11 -
Other Investments 22 (250) -
Interest received 4 -
Net Cash generated from investing activities (1,039) -
Financing activities
Equity fundraise (net of expenses paid) 2,592 1,658
Bank 50 -
loan
23
Net Cash generated from financing activities 2,642 1,658
Net change in cash and cash equivalents 375 1,225
Cash and cash equivalents at beginning of year 1,340 115
Cash and cash equivalents, end of year 9 1,715 1,340
Reconciliation of net debt is shown in Note 23.
Non-cash investing and financing transactions during the year-ended 30 June
2021 comprise:
In March 2021, 90,384,615 Ordinary Shares were issued at 0.26 pence per share
each as part of the consideration for the Group's acquisition of a 49%
interest in KrunchData Limited ("Krunch").
Mobile Streams plc (the Company) and its subsidiaries (together 'the Group')
sell digital content, primarily for distribution on mobile devices. The Group
has subsidiaries in Europe, Asia, North America and Latin America.
The Company is a public limited company incorporated and domiciled in the
United Kingdom. The address of its registered office is 125 Wood Street,
London, EC2V 7AW.
The Company is listed on the London Stock Exchange's Alternative Investment
Market.
These consolidated financial statements were approved for issue by the Board
of Directors on 30 December 2021.
Summary of significant accounting policies
Basis of preparation
The Group financial statements consolidate those of the parent company and all
of its subsidiary undertakings drawn up to 30 June 2021. They have been
prepared in accordance with applicable International Financial Reporting
Standards as adopted by the UK and with those parts of the Companies Act 2006
applicable to companies reporting under IFRS. All references to IFRS in these
statements refer to IFRS as adopted by the UK.
The financial statements have been prepared under the historical cost
convention.
Business combinations
The Group applies the acquisition method to account for business combinations. The consideration transferred for the acquisition of a subsidiary is the fair values of the assets transferred, the liabilities incurred to the former owners of the acquiree and the equity interests issued by the Group. The consideration transferred includes the fair value of any asset or liability resulting from a contingent consideration arrangement. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair values at the acquisition date. The Group recognises any non--controlling interest in the acquire on an acquisition -by -acquisition basis, either at fair value or at the non-controlling interest's proportionate share of the recognised amounts of acquiree's identifiable net assets. Acquisition- related costs are expensed as incurred.
Consolidation
Control is achieved where the Company 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. Subsidiaries are fully
consolidated from the date on which control is transferred to the Group. They
are de-consolidated from the date on which control is lost.
Intercompany transactions, balances and unrealised gains on transactions
between group companies are eliminated in full. Unrealised losses are also
eliminated unless the transaction provides evidence of an impairment of the
asset transferred. Subsidiaries' accounting policies have been changed where
necessary to ensure consistency with the policies adopted by the Group.
Identifiable assets acquired and liabilities and contingent liabilities
assumed in a business combination are, with limited exceptions, measured
initially at their fair values at the acquisition date. The Group recognises
any non-controlling interest in the acquired entity on an
acquisition-by-acquisition basis either at fair value or at the
non-controlling interest's proportionate share of the acquired entity's net
identifiable assets.
The separate financial statements and related notes of the Company are
prepared in accordance with FRS 101.
Foreign currency translation
(a) Presentational currency
The consolidated and parent company financial statements are presented in
British pounds. The functional currency of the parent entity is also British
pounds.
(b) Transactions and balances
Foreign currency transactions are translated into the functional currency
using the exchange rates prevailing at the date the transaction occurs. Any
exchange gains or losses resulting from these transactions and the translation
of monetary assets and liabilities at the consolidated statement of financial
position date are recognised in the consolidated income statement, except to
the extent that a monetary asset or liability represents a net investment in a
subsidiary when exchange differences arising on translation are recognised in
equity within the translation reserve. Amount due from or to subsidiaries are
treated as part of net investment in the subsidiary when settlement is neither
planned nor likely to occur in the foreseeable future. Upon settlement,
amounts that have arisen are taken directly to profit or loss.
Foreign currency balances are translated at the year-end using exchange rate
prevailing at the year-end.
(c) Group companies
The financial results and position of all group entities that have a
functional currency different from the presentation currency of the Group are
translated into the presentation currency as follows:
i assets and liabilities for each consolidated
statement of financial position are translated at the closing exchange rate at
the date of the consolidated statement of financial position.
ii income and expenses for each consolidated income
statement are translated at average exchange rates (unless it is not a
reasonable approximation to the exchange rate at the date of transaction).
iii all resulting exchange differences are recognised
as a separate component of equity (cumulative translation reserve).
Hyper-inflationary currencies
The Argentinian economy is designated as a hyper-inflationary. The financial
statements of the Argentinian subsidiary are stated in terms of the purchasing
power at the end of the reporting period through the selection of a general
price index before translation into the Group's presentation currency being
GBP.
Goodwill
Goodwill arising on the acquisition of a subsidiary undertaking is determined
as the difference between the fair value of the assets, including any
intangible assets arising on acquisition, and liabilities acquired, and the
fair value of consideration paid. Goodwill, which is classified as an
intangible asset with an indefinite life, is subject to an annual impairment
review. Further detail of the goodwill arising on the acquisition of
KrunchData Limited can be found in note 21: Goodwill and Intangible Assets and
note 15: Related party transactions, and note 16: Business Combination.
Intangible assets
An intangible asset arising from the Company's product development is
recognised if, and only if, the Company can demonstrate all of the following:
• the technical feasibility of completing the intangible asset so
that it will be available for use or sale
• its intention to complete the intangible asset and use or sell
it
• its ability to use or sell the intangible asset
• how the intangible asset will generate probable future economic
benefits
• the availability of adequate technical, financial and other
resources to complete the development and to use or sell the intangible asset
• its ability to measure reliably the expenditure attributable to
the intangible asset during its development
Intangible assets are amortised on a straight line basis over their useful
lives of five years. Amortisation is charged to the income statement from when
the asset becomes available to use. Where no internally generated intangible
asset can be recognised, development expenditure is recognised as an expense
in the period in which it is incurred.
Going Concern
The financial statements have been prepared on a going concern basis, which
assumes that the Group and the Company will continue in operational existence
for the foreseeable future, being 12 months from the date of sign-off of these
accounts.
The Group and Company use annual budgeting, forecasting, scenario planning and
regular performance reviews to assess the longer-term profitability of the
Group and make strategic and commercial changes as required to ensure that
cash resources are maintained.
The Directors consider that the Streams data insight and intelligence platform
will increase revenues in the current year. The Streams business provides
bespoke services to the B2B (business to business) market, and a SaaS
("Software as a Service") platform for customers not requiring a bespoke
service.
Also, since the year end, additional revenues have been generated through the
Company's launch of its LiveScores football 365 service, in partnership with
Quanta Media Group ("QMG" or "Quanta"), in Mexico, Argentina and Brazil. These
launches have enabled the Group to reinvigorate and reverse the decline of the
content business.
The Directors have prepared a cashflow forecast which indicates that existing
resources are expected to cover the Company's working capital requirements for
the foreseeable future, up to and beyond the point at which the Group is
expected to become consistently profitable. Management have also performed
scenario planning thereon.
After consideration of the above, the Directors consider that the continued
adoption of the going concern basis is appropriate.
New standards and interpretations not yet adopted
At the date of approval of these financial statements, the following standards
and interpretations which have not been applied in these financial statements
were in issue but not yet effective (and in some cases have not yet been
adopted by the UK):
· Amendments to IAS 1: Presentation of Financial Statements -
Classification of Liabilities as Current or Noncurrent (effective date not yet
confirmed)*
· Amendments to IFRS 3: Business Combinations - Reference to
Conceptual Framework (effective 1 January 2022)*
· Amendments to IAS 16: Property, Plant and Equipment (effective 1
January 2022)*
· Amendments to IAS 37: Provisions, Contingent Liabilities and
Contingent Assets (effective 1 January 2022)*
· Annual Improvements to IFRS Standards 20182020 Cycle (effective 1
January 2022)*
· Amendments to IAS 8: Accounting Policies, Changes to Accounting
Estimates and Errors (effective date not yet confirmed)*
· Amendments to IAS 12: Income Taxes - Deferred Tax arising from a
Single Transaction (effective date not yet confirmed)*
*subject to UK endorsement
The effect of these new and amended Standards and Interpretations which are in
issue but not yet mandatorily effective is not expected to be material.
Taxation
Current tax is the tax currently payable based on taxable profit for the year.
Deferred income tax is provided, using the liability method, on temporary
differences arising between the tax base of assets and liabilities and their
carrying amounts in the consolidated financial statements. However, deferred
tax is not provided on the initial recognition of goodwill, nor on the initial
recognition of an asset or liability unless the related transaction is a
business combination or affects tax or accounting profit. Deferred tax on
temporary differences associated with shares in subsidiaries is not provided
if reversal of these temporary differences can be controlled by the Group and
it is probable that reversal will not occur in the foreseeable future.
Deferred income tax is determined using tax rates known by the consolidated
statement of financial position date and that are expected to apply when the
deferred income tax asset is realised or the deferred income tax liability is
settled. Deferred income tax assets are recognised only to the extent that it
is probable that future taxable profit will be available against which the
temporary differences can be utilised. Deferred tax liabilities are provided
in full. There is no discounting of assets or liabilities.
Changes in deferred tax assets or liabilities are recognised as a component of
the tax expense in the consolidated income statement, except where they relate
to items that are charged or credited directly to equity or other
comprehensive income, in which case the related deferred tax is also charged
or credited directly to equity or other comprehensive income.
Provisions
Provisions, including those for legal claims, are recognised when the Group
has a present legal or constructive obligation as a result of past events, it
is probable that an outflow of economic benefits will be required to settle
the obligation and the amount can be reliably estimated.
Provisions are measured at the present value of management's best estimate of
the expenditure required to settle the present obligation at the consolidated
statement of financial position date. The discount rate used to determine the
present value reflects current market assessments of the time value of money
and the risks specific to the liability.
Financial Assets
Classification
a) Financial assets and financial liabilities are recognised in the
consolidated statement of financial position when the Company becomes party to
the contractual provisions of the instrument. Financial assets are
de-recognised when the contracted rights to the cash flows from the financial
asset expire or when the contracted rights to those assets are transferred.
Financial liabilities are de-recognised when the obligation specified in the
contract is discharged, cancelled or expired. Financial assets and financial
liabilities are initially measured at their fair value. Transaction costs
attributable to the acquisition of a financial asset or financial liability
are added or deducted from the fair value of the financial asset or financial
liability. At each reporting date, financial assets are reviewed to assess
whether there is objective evidence of impairment. If any such evidence
exists, impairment loss is determined and recognised based on the
classification of the financial asset.
b) Loans and receivables (including trade receivables, prepayments,
deposits, loans and other receivables, cash and bank balances) are
non-derivative financial assets with fixed or determinable payments that are
not quoted on an active market. At each reporting date subsequent to initial
recognition, loans and receivables are carried at amortised cost using the
effective interest method, unless when there is objective evidence that the
asset is impaired. Impairment is measured as the difference between the
asset's carrying amount and the present value of estimated future cash flows
discounted at the original effective interest rate. Impairment losses are
reversed in subsequent periods when an increase in the asset's recoverable
amount can be related objectively to an event occurring after the impairment
is recognised, subject to a restriction that the carrying amount of the asset
at the date the impairment is reversed does not exceed what the amortised cost
would have been had the impairment not been recognised.
c) Trade and other receivables are recognised at their fair value.
Appropriate provisions for estimated irrecoverable amounts are recognised in
the statement of comprehensive income when there is objective evidence that
the assets are impaired.
d) Cash and cash equivalents comprise cash on hand and demand deposits
held on call with banks. Cash and cash equivalents are shown in note 18.
Receivables
Receivables are non-derivative financial assets with fixed or determinable
payments that are not quoted in an active market. They are included in current
assets, except for maturities greater than 12 months after the Statement of
Financial Position date. These are classified as non-current assets. The
Group's receivables comprise trade and other receivables and cash and cash
equivalents in the Statement of Financial Position.
e) Recognition and Measurement
Financial assets are initially measured at fair value plus transactions costs.
Receivables are subsequently carried at amortised cost using the effective
interest method, except for short term receivables.
f) Impairment of Financial Assets
The Group assesses at the end of each reporting period whether there is
objective evidence that a financial asset, or a group of financial assets, is
impaired. A financial asset, or a group of financial assets, is impaired, and
impairment losses are incurred, only if there is objective evidence of
impairment as a result of one or more events that occurred after the initial
recognition of the asset (a "loss event"), and that loss event (or events) has
an impact on the estimated future cash flows of the financial asset, or group
of financial assets, that can be reliably estimated.
The criteria that the Group uses to determine that there is objective evidence
of an impairment loss include:
· significant financial difficulty of the issuer or
obligor;
· a breach of contract, such as a default or
delinquency in interest or principal repayments;
· the disappearance of an active market for that
financial asset because of financial difficulties;
· observable data indicating that there is a
measurable decrease in the estimated future cash flows from a portfolio of
financial assets since the initial recognition of those assets, although the
decrease cannot yet be identified with the individual financial assets in the
portfolio; or
· for assets classified as available-for-sale, a
significant or prolonged decline in the fair value of the security below its
cost.
Assets carried at amortised cost
The amount of impairment is measured as the difference between the asset's
carrying amount and the present value of estimated future cash flows
(excluding future credit losses that have not been incurred), discounted at
the financial asset's original effective interest rate. The asset's carrying
amount is reduced, and the loss is recognised in the Statement of
Comprehensive Income. As a practical expedient, the Group may measure
impairment on the basis of an instrument's fair value using an observable
market price.
If, in a subsequent period, the amount of the impairment loss decreases and
the decrease can be related objectively to an event occurring after the
impairment was recognised (such as an improvement in the debtor's credit
rating), the reversal of the previously recognised impairment loss is
recognised in the Statement of Comprehensive Income.
Financial Liabilities
Financial liabilities are obligations to pay cash or other financial assets
and are recognised when the Group becomes a party to the contractual
provisions of the instruments. Financial liabilities are initially measured at
fair value, net of transactions costs. They are subsequently measured at
amortised cost using the effective interest method.
Financial liabilities are derecognised when the Group or Company's contractual
obligations expire, are cancelled or are discharged. The Group's financial
liabilities consist of trade and other payables.
Cash and Cash Equivalents
For the purpose of the cash flow statements, cash and bank overdrafts comprise
cash at bank and in hand.
Revenue recognition
Under IFRS 15, Revenue from Contracts with Customers, five key points to
recognise revenue have been assessed:
Step 1: Identify the contract(s) with a customer;
Step 2: Identify the performance obligations in the contracts;
Step 3: Determine the transaction price;
Step 4: Allocate the transaction price to the performance obligations in the
contract; and
Step 5: Recognise revenue when (or as) the entity satisfies a performance
obligation.
The Group recognises revenue when the amount of revenue can be reliably
measured, it is probable that future economic benefits will flow to the
entity, and specific criteria have been met for each of the Group's
activities, as described below.
The Group bases its estimates on historical results, taking into consideration
the type of customer, the type of transaction and the specifics of each
arrangement. Where the Group makes sales relating to a future financial
period, these are deferred and recognised under 'deferred revenue' on the
Statement of Financial Position.
Loans and borrowings
After initial recognition, interest bearing loans and borrowings are
subsequently measured at amortised cost using the effective interest rate
method. Gains and losses are recognised in the income statement when the
liabilities are derecognised as well as through the effective interest rate
method (EIR) amortisation process. Amortised cost is calculated by taking into
account any discount or premium on acquisition and fees or costs that are an
integral part of the EIR. The EIR amortisation is included in finance costs in
the income statement.
Share based payments
Employees (including Directors) of the Group receive remuneration in the form
of share-based payment transactions, whereby employees render services in
exchange for shares or rights over shares ('equity-settled transactions').
Service providers also may receive settlement for their services in the form
of share-based payments.
The Group has applied the requirements of IFRS 2 Share-Based Payments to all
grants of equity instruments.
The cost of equity settled transactions with employees is measured by
reference to the fair value at the grant date of the equity instruments
granted. The fair value is determined by using the Black-Scholes model. The
cost of services provided to the Company settled by share-based payments are
either fair valued in same manner as those for employees or, if available, by
reference to the cash equivalent of those services.
The cost of equity-settled transactions is recognised in the consolidated
income statement, together with a corresponding increase in retained earnings,
over the periods in which the performance conditions are fulfilled, ending on
the date on which the relevant employees become fully entitled to the award
('vesting date'). At each consolidated statement of financial position date
before vesting the cumulative expense is calculated, representing the extent
to which the vesting period has expired and management's best estimate of the
achievement or otherwise of non-market conditions and of the number of equity
instruments that will ultimately vest. Market conditions are taken into
account in determining the fair value of the options granted, at grant date,
and are subsequently not adjusted for. The movement in cumulative expense
since the previous consolidated statement of financial position date is
recognised in the consolidated income statement, with a corresponding entry in
equity.
No expense or increase in equity is recognised for awards that do not
ultimately vest. Awards where vesting is conditional upon a market condition
are treated as vesting irrespective of whether or not the market condition is
satisfied, provided that all other performance conditions are satisfied.
Share capital
Ordinary shares are classified as equity. Incremental costs directly
attributable to the issue of new shares or options are charged to the share
premium account.
Operating leases are leases in which the risks and rewards of ownership are not transferred to the lessee.
Equity balances
a) Called up share capital
Called up share capital represents the aggregate nominal value of ordinary
shares in issue.
b) Share premium
The share premium account represents the incremental paid up capital above the
nominal value of ordinary shares issued.
c) Translation Reserve
The translation reserve represents the cumulative translation adjustments on
translation of foreign operations.
d) Warrants reserve in accordance with International Financial reporting
Standard 2 (IFRS2).
1. Critical accounting estimates, judgements AND ASSUMPTIONS
When applying the Group's accounting policies, it is necessary that management
makes a number of accounting estimates, judgements and assumptions about the
future. Estimates and judgements are evaluated on a regular basis and are
based on historical experience and other factors, such as expectations of
future events that are believed to be reasonable under the circumstances.
1.1 Critical accounting estimates, judgements and assumptions
The critical judgements that have been made in arriving at the amounts
recognised in the consolidated financial statements are discussed below. The
Directors of the Group have determined that there are no critical accounting
estimates, judgements and assumptions associated with the Group's activities,
other than as outlined below
Valuation and asset lives of separately identifiable intangible assets
Based on the information available, the management have made the appropriate
judgements in respect of the estimated useful economic lives of the intangible
assets, which are typically judged to be 5 years from the point at which the
assets becomes available for use. These judgements are compared with available
comparative information of similar businesses. See Note 21: Goodwill and
Intangible assets.
The assets' residual values and useful economic lives are reviewed and
valuations are adjusted, if appropriate, at each balance sheet date.
Valuation of acquired assets at fair value
Intangible assets acquired through a business combination are initially
measured at fair value at the acquisition date and then amortised over their
useful economic lives. Subsequent expenditure is capitalised only when it
increases the future economic benefits embodied in the specific asset to which
it relates.
Details of the various assets acquired in the Krunch acquisition asset are
provided in Note 16 Business combination.
Management made an assesment on Krunch Data Ltd before the acquisition and
considered the on-going project under development jointly with the Company
staff. It was considered that the best valuation practice was to split the
amount equally between Goodwill and Intangible assets. See Note 21: Goodwill
and Intangible assets.
The major separate identifiable asset acquired in the transaction was the
Streams Data Platform, a software development project in progress. The
Directors judged the fair value of the software platform acquired to be the
present value of the remaining contractual income flows discounted at the
Group's cost of capital of 15%, and this resulted in an initial value
recognised of £360,000. This amount is disclosed in note 21.
The fair value of all other assets acquired and shown in note 16 was reviewed
by management and was judged to be largely in line with the book value in
KrunchData Limited at the point of acquisition.
Goodwill on the Krunch transaction was then calculated to be £360,000.
The Directors have reviewed the value of Goodwill and intangible assets
acquired through the Krunch transaction. Based on the budgeted and forecast
revenues and profitability of the Streams Data business, and the newly
launched content businesses which use the Streams Data platform, the value of
goodwill and intangible assets acquired are fully supported at year end by
these forecasts.
Impairment of goodwill and other intangible assets
Management make judgements as to whether or not goodwill or other intangible
assets are impaired. The calculation of the value requires the Directors to
estimate the future cash flows expected to arise from the cash-generating
unit. According to the NPV model used, the management needs to use a suitable
discount rate in order to calculate present value. The carrying amount of
goodwill at 30 June 2021 was £360k, and of other intangibles was £569k. The
model used was a sensitivity analysis of a discounted cash flow, using a
discount rate of 15% per year and an average revenue growth rate of 215% per
year.
See Note 21: Goodwill and Intangible Assets.
Capitalisation of development costs
Included within Intangible Assets, Note 21, are costs capitalised in
connection with KrunchData platform. These costs are based on management's
view of the development team's time spent on the projects and considering the
requirements of IAS 38 "Intangible Assets". Development costs are amortised
over the life of the project once it has been released to the commercial
environment. The carrying value is tested for impairment when there is an
indication that the value of the assets might be impaired.
The key estimates involved include the time spent by personnel on development
of the projects, and the judgement of management that the costs will be
recovered in future based on the success of these developments.
KrunchData control
As outlined in notes 15 and 16, in March 2021 the Group acquired a 49%
interest in KrunchData Limited ("Krunch") for £735,000, comprising £500,000
cash and 90,384,615 Ordinary Shares issued at 0.26p each (being the closing
market price on 24 March), with an option to acquire the remaining 51% at any
time in the following two years for £765,000 (together the "Transaction"). As
announced on 23 March 2021, the rationale for the acquisition was to enable
the Company to secure the systems, software and IP required to continue
operating the Streams Data business, and to reduce future costs by terminating
the previous revenue share agreement immediately. See Note 15: related party
transactions.
The Directors judge that the Group exercises control over Krunch, as the
shareholders of Krunch are Directors and Senior Managers as well as
shareholders of the Group, and because the Group has the right to acquire the
remaining 51% at any time prior to March 2023 on fixed terms. Frequent
meetings are held with Krunch management, including a formal review of
progress on a monthly basis. Board meetings are held by the Krunch Board of
Directors.
The Directors have also reviewed the value and the nature of the intangible
assets (platform and software development costs) acquired as a result of the
transaction, and made judgements about the fair value of these assets, as
outlined in note 21.
Quanta Loan Note
As announced on 31 March 2021, the Group provided a Convertible Loan Note of
£250,0000 (the "Loan") to Quanta, with a further £250,000 to be made
available subject to achieving various agreed milestones, centred around its
entrance to key markets. The Directors have reviewed the management accounts,
projections and assurances received from Quanta, and based on these consider
that the Loan will be recoverable in its entirety either through repayment or
conversion by the redemption date of 31 December 2022.
2. Services provided by the group's auditor
The Group (including its overseas subsidiaries) obtained the following
services from the Group's auditor and network firms:
2021 2020
£000's £000's
Fees payable to the Company's auditor and its associates for the audit of the 45 82
parent company and consolidated accounts
Non-Audit services:
Fees payable to the Company's auditor and its associates for other services: - -
Tax compliance
45 82
3. Operating loss
Operating loss is stated after charging the following items: 2021 2020
£000's £000's
Depreciation and amortisation 95 -
Loss on foreign currency 30 55
125 55
4. Directors' and Officers' remuneration
The Directors are regarded as the key management personnel of Mobile Streams
plc. Charges in relation to remuneration received by key management personnel
for services in all capacities during the year ended 30 June 2021 are detailed
in the Directors Report.
5. Directors and employees
Staff costs including Directors during the year were as follows:
2021 2020
£000's £000's
Wages and salaries 592 356
Social security costs 4 6
Share options cost - -
596 362
Share options cost were Nil during the period (FY2020: Nil). There were no
share options awarded, exercised, lapsed or surrendered during the period by
the Management.
Development costs capitalised during the
period
360
-
Employee costs included in the capitalised development costs were £101k
(FY2020: £Nil.)
The average number of employees during the year was as follows:
2021 2020
Number Number
Management 6 4
Administration - -
6 4
6. EARNINGS PER SHARE ('EPS')
Basic earnings per share is calculated by dividing the loss or profit
attributable to equity holders of the company by the weighted average number
of ordinary shares in issue during the period. For the year ended 30 June 2021
4m (2020: 4m) options over ordinary shares have been excluded from the
calculations of earnings per share; the options were non-dilutive in both
years as the company was loss-making.
Reconciliations of the earnings and weighted average number of shares used in
the calculations are set out below.
The adjusted EPS figures have been calculated to reflect the underlying
profitability of the business by excluding non-cash charges for depreciation,
amortisation, impairments and share compensation charges.
2021 2020
Pence per share Pence per share
Basic earnings per share (0.070) (0.379)
Diluted earnings per (0.070) (0.379)
share
Reconciliations of the earnings and weighted average number of shares used in
the calculations are set out below.
2021 2020
£000's £000's
Loss for the year (1,017) (1,563)
For adjusted earnings per share £000's £000's
Loss for the year (1,017) (1,563)
Add back: share compensation expense - 3
Add back: depreciation and amortisation 95 -
Adjusted loss for the year (922) (1,560)
Weighted average number of shares
Number of shares Number of shares
For basic earnings per share 1,452,332,184 411,881,204
Exercisable share options - -
For diluted earnings per share 1,452,332,184 411,881,204
Pence per share Pence per share
Adjusted earnings per share (0.063) (0.379)
Adjusted earnings per share (0.063) (0.379)
7. income tax
The tax (credit)/charge is based on the profit before tax for the year and
represents:
2021 2020
£'000 £'000
Foreign tax on profits of the period - -
Total current tax - -
Deferred tax:
Origination & reversal of timing differences: (Deferred tax - -
charge/(credit) (Note 7))
Total Deferred tax - -
Total Tax benefit - -
2021 2020
Factors affecting the tax charge for the period £'000 £'000
Loss on ordinary activities before tax (1,032) (1,563)
Loss multiplied by weighted average tax rate applicable
of corporation tax in the United Kingdom of 19% (19%) (196) (297)
Adjustment in respect of prior years - foreign tax - -
Prior year tax adjustments - deferred tax - -
Deferred tax not recognised 196 297
Tax credit - -
Tax loss carried forward 2,585 2,409
No deferred tax asset has been recognised due to uncertainty as to when future
profits will be generated against which to relieve said assets.
8. Trade and other receivables
2021 2020
£000's £000's
Trade receivables 59 30
Accrued receivables 6 11
Other debtors 165 180
Other assets 95 -
325 221
The carrying value of receivables is considered a reasonable approximation of
fair value.
In addition, some of the unimpaired trade receivables are overdue as at the
reporting date. The age profile of trade receivables is as follows:
2021 2020
£000's £000's
Within terms
Not more than 30 days 28 12
Overdue
Not more than 3 months 31 16
More than 3 months but not more than 6 months 1 -
More than 6 months but not more than 1 year - 2
More than 1 year 28 29
Provision for doubtful debts (29) (29)
59 30
2021 2020
£000's £000's
Opening provision for doubtful debts 29 49
Change in provision during the year - (20)
Closing provision for doubtful debts 29 29
Trade and other receivables that are not impaired are considered to be
collectible within the Group's payment terms, negotiated with each customer.
The receivables includes a balance of £36k with Quanta Group; not collected
as at 30 June 2021.
9. Cash and cash equivalents
Cash and cash equivalents include the following components:
2021 2020
£000's £000's
Argentina´s cash at bank and in hand 18 52
Other companies 1,697 1,288
Cash at bank and in hand 1,715 1,340
The credit ratings of National Westminster Bank plc, where all cash is held,
are:
Short-Term Rating Long-Term Rating
Moody's P-1 A1+/A1
S&P A-1 A
Fitch F1 A+
JCR - A+
10. Trade and other payables
2021 2020
£000's £000's
Trade payables 130 317
Other payables 133 59
Accruals and deferred income 90 190
353 566
All amounts are current. The carrying values are considered to be a reasonable
approximation of fair value.
11. SHARE CAPITAL
2021 2020
£000's £000's
Called up share capital 567 382
Share premium 16,765 14,126
Translation reserve (3,050) (3,050)
Retained earnings (11,467) (10,463)
Equity attributable to equity holders of Mobile Streams plc 2,815 995
Non-Controlling Interest 1 -
Total 2,816 995
The total number of Ordinary Shares in issue as at 30 June 2021 was
2,354,549,845 with a par value of 0.01 pence per share (30 June 2020:
1,148,574,804 with a par value of 0.01 pence per share). All issued shares are
fully paid. In addition, there are 140,753,533 Deferred Shares of 0.19 pence
nominal value each in issue. The Deferred Shares, as their name suggests, have
very limited rights which are deferred to the Ordinary Shares and effectively
carry no value as a result. Accordingly, the holders of the Deferred Shares
are not entitled to receive notice of, attend or vote at general meetings of
the Company, nor are they entitled to receive any dividends or any payment on
a return of capital until at least £10,000,000 has been paid on each Ordinary
Share. The Deferred Shares will not be admitted to trading on AIM or any other
market.
The Group's main source of capital is the parent company's equity shares. The
Group's policy is to retain sufficient authorised share capital so as to be
able to issue further shares to fund acquisitions, settle share-based
transactions and raise new funds. Share based payments relate to employee
share options schemes. The schemes have restrictions on headroom so as not
to dilute the value of issued shares of the Company. The Group has not
raised debt financing in the past and does not expect to do so in the
future.
Allotted, called up and fully paid Year ended Year ended
2021 2020
In issue at 1 July 1,148,574,804 140,752,533
Issued during year 1,205,975,041 1,007,822,271
In issue at 30 June 2,354,549,845 1,148,574,804
The balance in the share premium account represents the proceeds received
above the nominal value on the issue of the Company's equity share capital.
As a result of warrant exercises by shareholders, the Group issued 4,100,000
shares at a value of 0.5 pence per share and 4,000,000 shares in October 2020
and a further 8,500,000 and 11,061,946 shares at 0.2 pence and 0.13 pence per
share respectively.
In March 2021 the Group issued 880,000,000 shares at a value of 0.25 pence per
share in a Placing to investors, raising £2.2m before expenses.
In March 2021 the Group issued 90,384,615 shares at 0.26 pence per share to
the owners of KrunchData Limited as part of the agreement to acquire 49% of
KrunchData Limited.
In April 2021, as a result of warrant exercises by shareholders, the Group
issued 14,062,500 shares at a value of 0.08 pence per share.
In April 2021 the Group issued 182,812,500 shares at 0.08 pence per share to
Directors and Senior Managers to cover their net remuneration from November
2019 to 30 March 2021.
In June 2021 the Group issued 11,053,480 shares at 0.25 pence per share to
Directors and Senior Managers to cover their net remuneration from 1 April to
30 June 2021.
The share premium recognised during the year was £2,639,000. This premium
corresponds to the difference between the nominal value at the time of the
share issue and the corresponding proceeds of the share issue. Capitalisation
costs netted off share premium were £165k.
12. Share-based payments
The Group operates three share option incentive plans - an Enterprise
Management Incentive Scheme, a Global Share Option Plan and an ISO Sub Plan -
in order to attract and retain key staff. The remuneration committee can
grant options over shares in the Company to employees of the Group. Options
are granted with a fixed exercise price equal to the market price of the
shares under option at the date of grant and are equity settled, the
contractual life of an option is 10 years. Exercise of an option is subject to
continued employment. Options are valued at the date of grant using the
Black-Scholes option pricing model. The options detailed below do not include
the warrants issued by the Company to investors participating in Placings.
2021 2020
Range of exercise prices Weighted average exercise price (£) Number of Shares (000's) Weighted average remaining life (years): Weighted average exercise price (£) Number of Shares (000's) Weighted average remaining life (years):
Contractual Contractual
£0 - £0.50 0.282 1,014 2.3 0.282 1,014 3.3
£0.51 - £1.00 0.640 3,487 1.1 0.640 3,487 2.1
No share options were awarded, exercised, lapsed or surrendered during the
year ended 30 June 2021 (2020: Nil).
The total charge for the year relating to employee share-based payment plans
was £Nil (2020: £Nil).
13. Segment reporting
As at 30 June 2021, the Group was organised into 4 geographical segments:
Europe, North America, Latin American, and Asia Pacific. The operating
segments are organised, managed and reported to the Board of Directors.
Revenues are from external customers only and generated from two principal
business activities: the sale of mobile content through Multi-National
Organisation's (Mobile Operator Services), and the provision of data insight
and intelligence platforms and services (Other Service Fees).
All operations are continuing and all inter-segment transactions are priced
and carried out at arm's length.
£000's Europe Asia Pacific North America Latin America Consol Group
Mobile Operator Services - 12 - 246 - 258
Other Service fees 236 - - - (99) 137
Total Revenue 236 12 - 246 (99) 395
Cost of sales - (7) - (166) - (173)
Gross profit 236 5 - 80 (99) 222
Selling, marketing and administration expenses (1,003) (34) 1 (127) - (1,163)
Trading EBITDA* (767) (29) 1 (47) (99) (941)
Depreciation, amortisation and impairment (77) - - - (18) (95)
Share based compensation - - - - - -
Profit (loss) for derecognition of subsidiaries - - - - -
Finance income - - - 4 4
Finance expense - - - - - -
Loss before tax (844) (29) 1 (43) (117) (1,032)
Taxation - - - - - -
Loss after tax (844) (29) 1 (43) (117) (1,032)
Segmental 3,238 8 - 105 (132) 3,219
assets
Segmental liabilities 262 31 4 106 - 403
The segmental results for the year ended 30 June 2020 were as follows:
£000's Europe Asia Pacific North America Latin America Consol Group
Mobile Operator Services - 124 4 502 - 630
Other Service fees 6 - - - - 6
Total Revenue 6 124 4 502 - 636
Cost of sales - (27) - (446) - (473)
Gross profit 6 97 4 56 - 163
Selling, marketing and administration expenses (595) (2) (23) (153) - (773)
Trading EBITDA* (589) 95 (19) (97) - (610)
Depreciation, amortisation and impairment - - - - -
Share based compensation - - - - - -
Profit (loss) on derecognition of subsidiaries - (177) (818) 42 (953)
Finance income - - - - -
Finance expense - - - - - -
Loss before tax (589) (82) (837) (55) - (1,563)
Taxation - - - - - -
Loss after tax (589) (82) (837) (55) - (1,563)
Segmental 1,299 51 1 210 - 1,561
assets
Segmental liabilities 349 45 5 167 - 566
* Earnings before interest, tax, depreciation, amortization, impairments of
assets and share compensation
The totals presented in the Group's operating region segments reconcile to the
Group's key financial figures as presented in its financial statements as
follows:
2021 2020
£000's £000's
Segment revenues
Total segment revenues 395 636
Group's revenues 395 636
Segment results
Total segment Loss after tax (1,032) (1.563)
Group's Loss after tax (1,032) (1.563)
Segment assets
Total segment assets 3,219 1.561
Consolidation eliminations - -
Group's assets 3,219 1.561
Segment liabilities
Total segment liabilities 403 566
Consolidation eliminations - -
Group's liabilities 403 566
14. Capital commitments
The Group had no capital commitments as at 30 June 2021 other than the further
£250,000 to be made available subject to achieving various agreed milestones
under the Quanta Loan Note as disclosed in Note 22 (30 June 2020: £Nil).
15. Related party transactions
Key Management
The only related party transactions comprising the remuneration of senior management are disclosed in the Remuneration Committee Report.
Related Parties
During the year the Company made payments of £391,500 to KrunchData Limited
("Krunch"), a company in which Mark Epstein (Board member) has a beneficial
interest. These payments were made in accordance with the joint venture
agreement dated 22 November 2019 (the "JV Agreement"), as described in the
Circular dated 6 November 2019. In November 2020 it was agreed to extend the
initial revenue split arrangements in the JV Agreement (whereby the Company
retains 100% of revenues) until the end of 2021. Under the JV agreement, MOS
will also continue to pay Krunch client set up costs and the costs of data
clean-up and agreed software development at cost.
Igniteamt Limited is a company where Mark Epstein (Board member) has a
beneficial interest. Up to June 30 2021, KrunchData Limited had a debtor
balance of £ 93,525 and a creditor balance of £63,000.
16. Business combination
Acquisition of Krunch Data Limited
On 29 March 2021 the Group acquired a 49% interest in KrunchData Limited
("Krunch") for £735,000, comprising £500,000 cash and 90,384,615 Ordinary
Shares issued at 0.26p each (being the closing market price on 24 March), with
an Option to acquire the remaining 51% at any time in the following two years
for £765,000 (together the "Transaction"). As part of the Transaction, it was
agreed that the revenue share agreement, under which the share of the revenues
from Streams Data received by the Company would reduce from 100% to 50% from
January 2022, would be terminated immediately.
Details of the purchase consideration, the net assets acquired, and goodwill
are as follows:
Shares Fair value of consideration
Total consideration No. £
Cash 500,000
Consideration shares 90,384,615 235,000
735,000
The table below summarises the recognised amounts of assets and liabilities
assumed at the date of acquisition (29 March 2021) of KrunchData Limited. The
fair value of these assets and liabilities was reviewed by management and was
judged to be in line with the book value in KrunchData Limited at the point of
acquisition.
2021
Fair value £000's
Intangible assets
Platform development and software 42
Cash and Cash equivalents 11
Other assets 110
Total assets 163
Liabilities
Other creditors 72
Bank Loan 50
Corporate tax payable 10
Total Liabilities 132
Net identifiable assets acquired 31
49% share acquisition 15
Net identifiable assets acquired 15
Add: Software Intangible asset 360
Add: Goodwill 360
735
2021
Acquisition consideration £000's
Cash consideration - 49% 500
Less cash balances acquired (49%) (5)
Net outflow of cash - investing activities 495
17. RISK MANAGEMENT OBJECTIVES AND POLICIES
The Group is exposed to currency and liquidity risk, which result from both
its operating and investing activities. The Group's risk management is
coordinated in close co-operation with the Board and focuses on actively
securing the Group's short to medium term cash flows by minimising the
exposure to financial markets. The most significant financial risks to which
the Group is exposed are described below. Also refer to the accounting
policies.
Foreign currency risk
The Group is exposed to transaction foreign exchange risk. The currencies
where the Group is most exposed to volatility are Argentine Peso, Mexican Peso
and Indian Rupee.
Currently no hedging instruments are used. The Company will continue to review
its currency risk position as the overall business profile changes.
Foreign currency denominated financial assets and liabilities, which are all
short-term in nature and translated into local currency at the closing rate,
are as follows.
2021 2020
000's 000's
USD AUS ARS Other USD AUS ARS Other
Nominal amounts £ £ £ £ £ £ £ £
Financial assets - - 103 9 1 - 200 61
Financial liabilities (4) - (61) (77) (5) - (123) (89)
Short-term exposure (4) - 42 (68) (4) - 77 (28)
Percentage movements for the period in the exchange rates for the British
Pound to US Dollar, Australian Dollar and Argentine Peso are below. These
percentages have been determined based on the average exchange rates during
the period.
2021 2020
US Dollar -12% 4%
Argentine Peso -35% -27%
Liquidity risk
The Group seeks to manage financial risk by ensuring sufficient liquidity is
available to meet foreseeable needs. Management prepares cash flow forecasts
which are reviewed at Board meetings to ensure liquidity. The Group has no
borrowing arrangements.
As at 30 June 2021, the Group's financial liabilities were all current and
have contractual maturities as follows:
30 June 2021 Within 6 months 6 to 12 months
£000's £000's
Trade and other payables 130 -
The maturity of the Group's financial liabilities, which were all current at
the previous year end, was as follows:
30 June 2020 Within 6 months 6 to 12 months
£000's £000's
Trade and other payables 566 -
Capital Management Disclosures
Management assesses the Group's capital requirements in order to maintain an
efficient overall financing structure while avoiding excessive leverage. The
Group manages the capital structure and makes adjustments to it in the light
of changes in economic conditions and the risk characteristics of the
underlying assets. In order to maintain or adjust the capital structure, the
Group could issue new shares.
18. FINANCIAL INSTRUMENTS
The Company's financial instruments comprise primarily cash and various items
such as trade debtors and trade payables which arise directly from operations.
The main purpose of these financial instruments is to provide working capital
for the Company's operations. The Company does not utilise complex financial
instruments or hedging mechanisms.
Financial assets and financial liabilities are initially measured at amortised
cost. Transaction costs attributable to the acquisition of a financial asset
or financial liability are added or deducted from the value of the financial
asset or financial liability.
The tables below set out the Group's accounting classification of each class
of its financial assets and liabilities.
2021 2020
£000's £000's
Financial Assets at amortised cost
Accrued Receivables 6 11
Trade receivables 59 28
Cash and Cash equivalents 1,715 1.340
Quanta loan note 250 -
2,030 1,379
Financial Liabilities at amortised cost
Trade Creditors (130) (317)
Accrued content costs (54) (63)
Other Accrued liabilities (169) (127)
(353) (507)
All receivables are expected to be received in full, and all payables are
expected to be paid in full. Cash and cash equivalents comprise cash on hand
and demand deposits held on call with banks. Therefore, in the view of
management, all of the above financial assets' carrying values are stated at
their amortised cost, as at 30 June 2021 and 2020.
19. ULTIMATE CONTROLLING PARTY
The Directors do not consider there to be an ultimate controlling party due to
the composition of the share register.
20. EVENTS AFTER THE REPORTING DATE
The Directors continue to review the impact of the Covid-19 pandemic,
including the current rapid spread of the Omicron variant, on the business,
and at the time of writing revenues have not been affected. All our staff work
from home, and the online nature of the existing business, both in terms of
content delivery and revenue collection, means that we have not experienced
and do not envisage any disruption to the business unless a prolonged economic
downturn results in a rise in cancellations. Marketing of the Streams Data
platform is also largely remote, although in the short term demand could be
affected as clients themselves respond to the ongoing situation.
21. GOODWILL AND INTANGIBLE ASSETS
The goodwill reflects the retention of the economic value accruing to the
Company from its acquisition of KrunchData Limited.
Intangibles acquired Intangibles added internally Goodwill Total
Platform development and software Streams Eliminations Subtotal
£000's £000's £000's £000's £000's £000's
Cost
At 1 July 2020 - - - -
-
Acquired on acquisition of subsidiary 47 47 47
Additions 360 (99) 621 360 981
360
At 30 June 2021 407 (99) 668 360 1,028
360
Accumulated amortisation and impairment
Cost
At 1 July 2020 - - - -
-
Acquired on acquisition of subsidiary (4) (4) (4)
Additions (95) (95) - (95)
At 30 June 2021 (99) - (99) - (99)
-
Net book value at 30 June 2021 308 (99) 569 360 929
360
Goodwill and the intangible assets held by the Group arose on the acquisition
of KrunchData Limited, which is described in note 21.
The Company's internally developed software relates to the Streams Data
platform. The Group tests goodwill annually for impairment, or more frequently
if there are indications that goodwill might be impaired. The recoverable
amount is determined from value in use calculations. The key assumptions,
which are the long-term growth rates, the discount rates and the cash flow
forecasts were derived from the most recent financial budgets approved by
management covering a three-year period.
A sensitivity analysis was performed using a range of lower growth and higher
discount rate assumptions. The central case rates applied were:
• Long term (three year) average growth rate 215% per year
• Discount rate / cost of capital 15%
The discount rates used are based on comparative businesses weighted average
cost of capital. No issues were identified that required an impairment.
22. OTHER ASSET
As announced on 31 March 2021, the Group provided Quanta a Convertible Loan
Note of £250,0000 (the "Loan"), with a further £250,000 to be made available
subject to achieving various agreed milestones, centred around its entrance to
key markets. The Directors have reviewed the management accounts, projections
and assurances received from Quanta, and based on these consider that the Loan
will be recoverable in its entirety either through repayment or conversion by
the redemption date of 31 December 2022.
23. LOANS AND BORROWINGS
The Directors believe the book value of loans and borrowings approximates fair
values. Books values are:
2021
Current £
Bounce Back Loan 50,000
Non-Current -
Total Loans and borrowings 50,000
Prior to its acquisition by the Group, KrunchData Limited obtained a loan from
Metro Bank PLC. The purpose of the Loan is to finance working capital and
investment in the business and to support trading or commercial activity in
the United Kingdom. The duration of this fixed sum loan agreement is 72 months
from the loan drawdown date. The interest rate which applies to the loan
agreement is 2.5% (fixed) per annum. No repayments of capital or interest are
required during the first 12 months after the date draw down, as the loan is
under the terms of the Bounce Back Loan scheme offered by the UK Government,
which covers the interest payments on behalf of the Company for that period.
24. EXCHANGE DIFFERENCES ON TRANSLATING FOREIGN OPERATIONS
During FY 2020, 5 subsidiaries were closed (Singapore, Australia, Chile,
Appitalism (USA) and The Nickels Group (USA)). These entities had Foreign
Exchange equity reserves recorded due to Intercompany transactions, according
to IAS 21. The effect of the derecognition was disclosed in the FY 2020
Financial statements comprehensive income.
During FY 2021 the FX reserve transactions are Nil, as no subsidiaries were
closed during the year, all the remaining subsidiaries remain operational.
AUDITOR'S REPORT TO THE MEMBERS OF MOBILE STREAMS PLC
Opinion
We have audited the financial statements of Mobile Streams Plc (the 'parent
company') for the year ended 30 June 2021 which comprise the parent company
Statement of Financial Position, the parent company Statement of Changes in
Equity and 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 United Kingdom
Accounting Standards, including Financial Reporting Standard 101 Reduced
Disclosure Framework (United Kingdom Generally Accepted Accounting Practice).
In our opinion, the parent company financial statements:
• give a true and fair view of the state of the
parent company's affairs as at 30 June 2021;
• have been properly prepared in accordance with
United Kingdom Generally Accepted Accounting Practice; and
• have been prepared in accordance with the
requirements of the Companies Act 2006.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing
(UK) (ISAs (UK)) and applicable law. Our responsibilities under those
standards are further described in the Auditor's responsibilities for the
audit of the financial statements section of our report. We are independent of
the 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
In auditing the financial statements, we have concluded that the director's
use of the going concern basis of accounting in the preparation of the
financial statements is appropriate. Our evaluation of the directors'
assessment of the parent company's ability to continue to adopt the going
concern basis of accounting included reviewing and challenging managements
prepared forecast model and any scenario planning undertaken thereon.
Based on the work we have performed, we have not identified any material
uncertainties relating to events or conditions that, individually or
collectively, may cast significant doubt on the parent company's ability to
continue as a going concern for a period of at least twelve months from when
the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the directors with respect to
going concern are described in the relevant sections of this report.
Our application of materiality
The parent company materiality for the financial statements as a whole was set
at £30,130 (2020: £21,445). Loss before tax was used as the basis for
materiality as the parent company, following the continued management shift
toward diversifying its business model and is therefore in a transitionary
phase and revenue is no longer the key driver. Performance materiality was
calculated at 70% - £21,090, (2020: 70%, £15,015) of materiality for the
financial statements as a whole.
We have agreed with those charged with governance that we would report any
individual audit difference in excess of £1,507 (2020: £1,072) as well as
differences below this threshold that, in our view, warranted reporting on
qualitative grounds.
Our approach to the audit
In designing our audit, we determined materiality and assessed the risk of
material misstatement in the parent company financial statements. In
particular, we looked at areas involving significant accounting estimates and
judgements by the directors. We also addressed the risk of management override
of internal controls, including evaluating whether there was evidence of bias
by the directors that represented a risk of material misstatements due to
fraud.
Key audit matters
Key audit matters are those matters that, in our professional judgment, were
of most significance in our audit of the financial statements of the current
period and include the most significant assessed risks of material
misstatement (whether or not due to fraud) we identified, including those
which had the greatest effect on: the overall audit strategy, the allocation
of resources in the audit; and directing the efforts of the engagement team.
These matters were addressed in the context of our audit of the financial
statements as a whole, and in forming our opinion thereon, and we do not
provide a separate opinion on these matters.
Key Audit Matter How the scope of our audit responded to the key audit matter
Acquisition Accounting (Referring to Krunch Data 49% interest) - Note 16
Based on our planning procedures we have determined there is a risk that the We performed the following procedures
acquisition of Krunch data has not been accounted for correctly in accordance
with IFRS 3 Business Combinations. § Reviewed the accounting treatment and considered whether it was in
accordance with IFRS 3
§ Obtained, reviewed and challenged management's assessment and valuation of
We have assessed the key underlying risks as. Goodwill and separately identifiable intangible assets acquired.
Accounting treatment and valuation of Goodwill and § Reviewed and challenged managements impairment assessment and ensured
identifiable intangible assets arising on acquisition correct treatment of any impairment incurred.
Management assessment of whether any impairment has been incurred on
these acquired assets and Goodwill at year end
Recoverability of Convertible Loan Note issued to Quanta Media Group - Note
22
A Convertible loan note was issued to Quanta Media Group (a £250k loan We performed the following procedures
intended to fund them through their pre-IPO phase, with a possible second
tranche of £250k) § Obtained and challenged management's assessment of recoverability
Based on our planning procedures we have determined there is a risk that the § Reviewed the Convertible Loan Note agreement and ensured the loan note was
balance is not fully recoverable and requires management judgement as to the correctly accounted for in accordance with the terms of the agreement
recoverability and any potential requirement to create a provision for the
balance § Challenged the underlying information and assumptions
Ensured the convertible loan note has been correctly accounted for in line
with signed agreement and financial reporting framework
Other information
The other information comprises the information included in the annual report,
other than the financial statements and our auditor's report thereon. The
directors are responsible for the other information contained within the
annual report. Our opinion on the parent company financial statements does not
cover the other information and, except to the extent otherwise explicitly
stated in our report, we do not express any form of assurance conclusion
thereon. Our 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 course of 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 this gives rise to a material misstatement in the financial
statements themselves. If, based on the work we have performed, we conclude
that there is a material misstatement of this other information, we are
required to report that fact.
We have nothing to report in this regard.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of the audit:
• the information given in the strategic report
and the directors' report for the financial year for which the parent company
financial statements are prepared is consistent with the parent company
financial statements; and
• the strategic report and the directors' report
have been prepared in accordance with applicable legal requirements.
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the parent company and its
environment obtained in the course of the audit, we have not identified
material misstatements in the strategic report or the directors' report.
We have nothing to report in respect of the following matters in relation to
which the Companies Act 2006 requires us to report to you if, in our opinion:
• adequate accounting records have not been kept
by the parent company, or returns adequate for our audit have not been
received from branches not visited by us; or
• the parent company financial statements are not
in agreement with the accounting records and returns; or
• certain disclosures of directors' remuneration
specified by law are not made; or
• we have not received all the information and
explanations we require for our audit.
Responsibilities of directors
As explained more fully in the directors' responsibilities statement, the
directors are responsible for the preparation of the parent company 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 parent company financial statements, the directors are
responsible for assessing 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 parent company or to cease operations, or have no realistic
alternative but to do so.
Auditor's responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial
statements as a whole are free from material misstatement, whether due to
fraud or error, and to issue an auditor's report that includes our opinion.
Reasonable assurance is a high level of assurance, but is not a guarantee that
an audit conducted in accordance with ISAs (UK) will always detect a material
misstatement when it exists. 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.
Irregularities, including fraud, are instances of non-compliance with laws and
regulations. We design procedures in line with our responsibilities, outlined
above, to detect material misstatements in respect of irregularities,
including fraud. The extent to which our procedures are capable of detecting
irregularities, including fraud is detailed below:
· We obtained an understanding of the group and the sector in which
it operates to identify laws and regulations that could reasonably be expected
to have a direct effect on the financial statements. We obtained our
understanding in this regard through discussions with management and
application of cumulative audit knowledge and experience of the sector.
· We determined the principal laws and regulations relevant to the
group in this regard to be those arising from AIM rules, Companies Act 2006
and local employment law.
· We designed our audit procedures to ensure the audit team
considered whether there were any indications of non-compliance by the group
with those laws and regulations. These procedures included, but were not
limited to:
o enquiries of management and review of minutes.
· We also identified the risks of material misstatement of the
financial statements due to fraud. We considered, in addition to the
non-rebuttable presumption of a risk of fraud arising from management override
of controls, that the potential for management bias was identified in relation
to:
o the impairment of assets and we addressed this by challenging the
assumptions and judgements made by management when auditing that significant
accounting estimate.
Because of the inherent limitations of an audit, there is a risk that we will
not detect all irregularities, including those leading to a material
misstatement in the financial statements or non-compliance with regulation.
This risk increases the more that compliance with a law or regulation is
removed from the events and transactions reflected in the financial
statements, as we will be less likely to become aware of instances of
non-compliance. The risk is also greater regarding irregularities occurring
due to fraud rather than error, as fraud involves intentional concealment,
forgery, collusion, omission or misrepresentation.
A further description of our responsibilities for the audit of the financial
statements is located on the Financial Reporting Council's website at:
www.frc.org.uk/auditorsresponsibilities.This description forms part of our
auditor's report.
Other matter
We have reported separately on the group financial statements of Mobile
Streams plc for the year ended 30 June 2021.
Use of our report
This report is made solely to the company's members, as a body, in accordance
with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been
undertaken so that we might state to the company's members those matters we
are required to state to them in an auditor's report and for no other
purpose. To the fullest extent permitted by law, we do not accept or assume
responsibility to anyone, other than the company and the company's members as
a body, for our audit work, for this report, or for the opinions we have
formed.
Joseph Archer (Senior Statutory Auditor)
15 Westferry Circus
For and on behalf of PKF Littlejohn
LLP
Canary Wharf
Statutory
Auditor London
E14 4HD
30 December 2021
30 June 2021 30 June 2020
£000's £000's
Fixed assets
Other Asset 250
Investments in subsidiaries 1 735 -
Total fixed assets 985 -
Current assets
Debtors 2 501 40
Cash and cash equivalents 1,658 1,259
Total current assets 2,159 1,299
Creditors
Creditors: amounts falling due within one year 3 (117) (349)
Current Liabilities (117) (349)
(Net Liabilities) / Net assets 3,027 950
Capital and reserves
Called up share capital 4 567 382
Share premium 5 16,765 14,126
Profit and loss account (14,305) (13,558)
Shareholders deficit / Shareholders funds 3,027 950
The parent Company has taken advantage of Section 408 of the Companies Act
2006 and has not included its own Statement of Comprehensive Income account in
these financial statements. The parent Company's recognised loss for the year
ended 30 June 2021 was £688k.
The notes below form part of these financial statements.
The financial statements were approved by the Board of Directors on 30
December 2021.
Bob Moore
Chairman
COMPANY STATEMENT OF CHANGES IN EQUITY
Share Share Profit
capital premium and loss
account account account Total
£000 £000 £000 £000
At 1 July 2019 280 12,610 (13,043) (153)
New equity issue 102 1,516 73 1,691
Loss for the year - - (588) (588)
-
At 30 June 2020 382 14,126 (13,558) 950
At 1 July 2020
New equity issue 185 2,639 (59) 2,765
Loss for the year (688) (688)
At 30 June 2021 567 16,765 (14,305) 3,027
NOTES TO COMPANY FINANCIAL STATEMENTS
summary of significant accounting policies
Statement of compliance
These financial statements have been prepared in accordance with applicable
accounting standards and in accordance with Financial Reporting Standard 101 -
"Reduced Disclosure Framework" (FRS 101) The principal accounting policies
adopted in the preparation of these financial statements are set out below.
These policies have all been applied consistently throughout the year unless
otherwise stated.
The financial statements have been prepared on a historical cost basis. The
financial statements are presented in Sterling (£) and have been presented in
round thousands (£'000).
In preparing these financial statements the Company has taken advantage of all
disclosure exemptions conferred by FRS 101. Therefore, these financial
statements do not include:
1. A statement of cash flows and related notes
2. The requirements of IAS 24 related party disclosures to disclose
related party transactions entered in to between two or more members of the
group as they are wholly owned within the group.
3. The effect of future accounting standards not adopted.
4. Certain share based payment disclosures.
5. Disclosures in relation to impairment of assets.
6. Disclosures in respect of financial instruments (other than
disclosures required as a result of recording financial instruments at fair
value).
Additionally, the consolidated Group prepares accounts under IFRS which should
be read in conjunction with these statements specifically in respect of the
judgements and estimates used in considering the impairment of investments
which is considered alongside that of impairment of intangible assets.
Basis of preparation
The financial statements have been prepared on the historical cost basis. The principal accounting policies are set out below. The Company has applied the exemption under section 408 of the Companies Act 2006 and has not included the individual profit and loss account statement in the financial statements.
Going concern
The financial statements have been prepared on a going concern basis, which
assumes that the Group and the Company will continue in operational existence
for the foreseeable future, being 12 months from the date of sign-off of these
accounts.
The Group and Company use annual budgeting, forecasting, scenario planning and
regular performance reviews to assess the longer-term profitability of the
Group and make strategic and commercial changes as required to ensure that
cash resources are maintained. Although there was a significant fall in
revenues and a loss for the year ending 30 June 2021, the Group kept costs
carefully controlled, particularly marketing and administrative expenditure,
The Directors expect that the Streams data insight and intelligence platform
will increase revenues in the current year. The Streams business provides
bespoke services to the B2B (business to business) market, and a SaaS
("Software as a Service") platform for customers not requiring a bespoke
service.
Also, since the year end, additional revenues have been generated through the
Company's launch of its LiveScores football 365 service, in partnership with
Quanta Media Group ("QMG" or "Quanta"), in Mexico, Argentina and Brazil. These
launches have enabled the Group to reinvigorate and reverse the decline of the
content business.
The Directors have prepared a cashflow forecast which indicates that existing
resources are expected to cover the Company's working capital requirements for
the foreseeable future, up to and beyond the point at which the Group is
expected to become consistently profitable.
After consideration of the above, the Directors consider that the continued
adoption of the going concern basis is appropriate.
Investments IN SUBSIDIARIES
Investments in subsidiaries are stated in the Company's consolidated statement
of financial position at cost less provisions for impairment. The
recoverability of investments is considered to be a key judgement and estimate
and these are considered alongside those considered at a Group level in
respect of the recoverability of Intangible assets (See 1.1).
COMpany profit and loss account
The parent Company has taken advantage of Section 408 of the Companies Act
2006 and has not included its own profit and loss account in these financial
statements. The parent Company's recognised loss for the year ended 30 June
2021 was £688k (2020: £588k).
1. Investment in subsidiary companies
30 June 2021 30 June 2020
£000's £000's
Cost 3,636 3,636
Additions 735
Accumulated impairment (3,636) (3,616)
Net Book Value after impairment 735 -
Investments in subsidiaries are reviewed for impairment when events indicate
the carrying amount may not be recoverable and are accounted for in the
Company's financial statements at cost less accumulated impairment losses.
Investments in Subsidiary undertakings comprise:
Proportion held
Subsidiary Directly by Mobile Streams plc By other Group companies Total held by Group Country of incorporation Status
Mobile Streams Inc. 100% - 100% USA Dormant
Mobile Streams de Argentina SRL 50% 50% 100% Argentina Active
Mobile Streams Columbia Limitada. 50% 50% 100% Colombia Dormant
Mobile Streams of Mexico de CV 50% 50% 100% Mexico Active
Mobile Streams India Private Limited 99.99% - 99.99% India Active
Streams Data Limited 100% - 100% UK Active
KrunchData Limited 49% - 49% UK Active
All the subsidiaries' issued shares were ordinary shares and their principal
activities were the distribution of licensed mobile phone content and the
provision of data insight and intelligence platforms and services.
The registered offices addresses are:
Mobile Streams plc
125 Wood Street
London
EC2V 7AW
Mobile Streams, Inc.
PO Box 471191
Celebration
FL 34747-4679
KrunchData Limited
2 Blue Cedars
Warren Road, Banstead
Surrey SM7 1NT
Mobile Streams Argentina SRL
Viamonte 1815 3rd Floor appt G
Ciudad Autonoma de Buenos Aires
Republica Argentina
Mobile Streams India:
2106, Wing A, Bldg/2, Raheja Willows, CHS
L,
Birchwood, Akruli Rd, Kandivali East, Maharashtra,
India
Mobile Streams Colombia
AV. CRA 13 No. 69-74 OF. 701
Municipio Bogota D.C..
Colombia
Mobile Streams Mexico
Calle Florencia No. 57, 3° Piso,
Colonia Juarez, Delegacion Cuauhtemoc, Ciudad de Mexico, C.P. 06600.
Mexico
Streams Data Limited
125 Wood Street
London
EC2V 7AW
2. DEBTORS 2021 2020
£000's £000's
Trade debtors 36 -
Other debtors 30 40
Intercompany debtors 435 -
501 40
We estimate these receivables are fully recoverable during the next year.
3. CREDITORS
Creditors: amounts falling due within one year
2021 2020
£000's £000's
Trade creditors 52 225
Accruals and deferred income 65 124
117 349
4. SHARE CAPITAL
For details of share capital refer to note 11 to the Group financial
statements.
5. share premium account
For details of share capital refer to note 11 to the Group financial
statements.
6. Capital commitments
The Company has no capital commitments at 30 June 2021 (2020: Nil).
7. Contingent liabilities
As at 30 June 2021 there were no contingent liabilities (2020: Nil).
8. Related party transactions
During the year the Company remunerated the Directors and Officers as
disclosed in note 5 in the consolidated financial statements.
The Company is taking advantage of the exemption per IAS 24 which does not
require disclosure of transactions entered into between members of a group
when one of the transacting parties is a wholly owned subsidiary.
9. Directors and employees
The average number of employees during the year to 30 June 2021 was as
follows:
Year ended Year ended
2021 2020
Number Number
Management 5 3
Administration - -
5 3
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