TIDMIMO
RNS Number : 5677Q
IMImobile PLC
02 September 2014
For immediate release 2 September 2014
IMIMOBILE PLC
("IMImobile" or "the Company")
Unaudited preliminary results for the
period ended 31 March 2014
Introduction and note on basis of presentation
IMImobile today announces its unaudited financial results for
the period ended 31 March 2014.
IMImobile is a leading provider of software and services which
help businesses capitalise on the growth in mobile communication.
Its services, delivered in over 60 countries in Europe, the
Americas, MEA and India, help its clients to engage and transact
with their customers more efficiently through smarter mobile
engagement. The company's solutions allow customers to use mobile
as a channel to create new revenue streams, as a CRM and customer
engagement channel, and as a channel to improve business
operations.
The Company was incorporated on 4 December 2013 and did not
trade within the 17 week period ended 31 March 2014. As a result,
no income statement or cash flow statement has been presented for
the company within this preliminary announcement. As at 31 March
2014 the Company had net assets and equity of GBP100.
On 27 June 2014 the Company was successfully admitted to AIM and
issued new shares and used part of the proceeds from the initial
placing to pay the consideration for the acquisition of 76% of the
issued share capital of IMI Mobile Private Limited. The Company and
its NOMAD, Spark Advisory Partners Limited, have entered into a
relationship agreement with the two founding shareholders ("the
Founders") of IMI Mobile Private Limited who own 24% of the issued
share capital of IMI Mobile Private Limited. The relationship
agreement gives the Founders the right (but not the obligation) to
exchange all of their IMI Mobile Private Limited shares for
ordinary shares in the Company on the basis of one IMI Mobile
Private Limited share for three ordinary shares in the Company.
Whilst at 31 March 2014 the Company had no trade or assets and
had not completed the acquisition of IMI Mobile Private Limited,
the Directors believe that the provision of additional information
on the results of IMI Mobile Private Limited and its subsidiaries
("the Group") for the year ended 31 March 2014 and its financial
position as at 31 March 2014, together with comparative information
for the prior year, is necessary in order to present a true and
fair view of the company's financial statements. This additional
information has also been included in the unaudited preliminary
results and is described as the Pro-Forma Consolidated Financial
Information.
The additional information does not reflect the acquisition of
IMI Mobile Private Limited by IMImobile PLC. This will be accounted
for as a capital reorganisation, reflecting the substance of the
transaction. Hence the consolidated financial statements of the
company will be prepared on the same basis as presented in the
Pro-Forma Financial Information with the 24% interest in IMI Mobile
Private Limited owned by the two founding shareholders accounted
for as a non-controlling interest.
The financial highlights and commentary below are based on the
Pro-Forma information described above.
Group unaudited results at a glance
Year ended 31 March 2014 2013 Growth
GBPm GBPm
------------------------- ------ ------ -------
Revenue 43.4 38.5 +13%
Gross profit 27.9 23.5 +18%
Gross margin 64.3% 61.1%
EBITDA 7.3 5.6 +30%
Adjusted EBITDA(1) 7.2 6.1 +19%
Adjusted EBITDA margin 16.6% 15.8%
Profit before tax 5.3 2.7 +96%
Adjusted profit before
tax 5.1 3.2 +60%
Profit after tax(3) 3.9 2.1 +86%
Adjusted profit after
tax(2) 3.8 2.6 +45%
Cash at year end 9.3 4.6 +102%
------------------------- ------ ------ -------
1 Adjusted EBITDA is defined by the Group as loss/profit before
tax, depreciation, amortisation, net finance costs, fees incurred
in relation to IPO, share based payment charge and excluding the
impact of the disposal of subsidiaries
(2) Adjusted profit after tax is defined by the Group as
loss/profit before fees incurred in relation to IPO, share based
payment charge and excluding the impact of the disposal of
subsidiaries
3 EPS for the Group has not been presented in the additional
Pro-Forma consolidated financial information in note 3 as it does
not reflect
the non-controlling interest referred to in note 3.1 which will
be included in the groups consolidated financial statements in the
next
reporting period
Group key financial highlights
-- Revenue up 13% to GBP43.4m (2013: GBP38.5m)
-- Gross profit up 18% to GBP27.9m (2013: GBP23.5m)
-- Adjusted EBITDA(1) up 19% to GBP7.2m (2013: GBP6.1m)
-- Adjusted profit after tax(2) up 45% to GBP3.8m (2013: GBP2.6m)
-- Profit after tax up 86% to GBP3.9m (2013: GBP2.1m)
-- Results in line with market expectations
-- Outstanding contribution from Middle East and Africa with Gross Profit up 149% to GBP10.7m
-- Net cash generated from operating activities of GBP8.7m,
representing operating cash conversion of 121% (2013: 108%)
-- Cash and cash equivalents at 31 March 2014 of GBP9.3m (2013: GBP4.6m)
Operational highlights
-- New major operator wins in Middle East and Africa open up new geographies
-- First major government contract win in India
-- Launch of social networking products - DaVinci Social and TweetServe
-- Opened sales office in Atlanta, Georgia and signed first major US customer contract
-- Listed on the Alternative Investment Market of the London
Stock Exchange in June 2014 raising net proceeds of approximately
GBP8m (after considering fees and the acquisition of the Group) to
support significant growth opportunities
Outlook
The 2015 financial year has started well with trading in line
with expectation and renewals of several major customer contracts
across the Group. IMImobile remains well placed to take advantage
of the trends driven from the proliferation of mobile data networks
and smart devices.
Jay Patel, Chief Executive Officer of IMImobile PLC,
commented:
"The year to 31 March 2014 was another year of progress for
IMImobile with key contract wins across the globe demonstrating the
attractiveness of our product offering to enterprises and network
operators alike.
Our current financial year has started well with trading in line
with our expectations and the Group, following the successful IPO,
is well positioned for further growth. Underpinned by strong repeat
and recurring revenue streams, we will continue to build on the
organic growth achieved to date, whilst seeking additional growth
opportunities in new regions such as the US and also complementary
acquisitions.
As we invest and grow our business, taking advantage of positive
global trends in the mobile market, we look forward to the future
with confidence."
Cautionary statement
This announcement contains forward-looking statements that are
based on current expectations or beliefs, as well as assumptions
about future events. These forward-looking statements can be
identified by the fact that they do not relate only to historical
or current facts. Forward-looking statements often use words such
as anticipate, target, expect, estimate, intend, plan, goal,
believe, will, may, should, would, could, is confident, or other
words of similar meaning. Undue reliance should not be placed on
any such statements because they speak only as at the date of this
document and, by their very nature, they are subject to known and
unknown risks and uncertainties and can be affected by other
factors that could cause actual results, and IMImobile's plans and
objectives, to differ materially from those expressed or implied in
the forward-looking statements.
There are a number of factors which could cause actual results
to differ materially from those expressed or implied in
forward-looking statements. Among the factors that could cause
actual results to differ materially from those described in the
forward-looking statements are; increased competition, the loss of
or damage to one or more key customer relationships, the outcome of
business or industry restructuring, changes in economic conditions,
currency fluctuations, changes in laws, regulations or regulatory
policies, developments in legal or public policy doctrines,
technological developments, the failure to retain key management,
or the key timing and success of future acquisition opportunities
or major investment projects.
IMImobile undertakes no obligation to revise or update any
forward-looking statement contained within this announcement,
regardless of whether those statements are affected as a result of
new information, future events or otherwise, save as required by
law and regulations.
For further information please contact:
IMImobile PLC c/o Buchanan
Jay Patel, Chief Executive Tel: +44 (0)20 7466
Officer 5000
Mike Jefferies, Group Finance
Director
Buchanan - Financial PR adviser Tel: +44 (0)20 7466
Mark Edwards / Sophie McNulty 5000
/ Gabriella Clinkard imimobile@buchanan.uk.com
SPARK Advisory Partners - Tel: +44 (0)203 368
Nominated adviser 3550
Matt Davis / Sean Wyndham-Quin
Whitman Howard - Joint Broker Tel: +44 (0)207 087
Ranald McGregor-Smith 4556
WH Ireland - Joint Broker Tel: +44 (0)207 220
Adrian Hadden 1666
About IMImobile PLC
IMImobile is a leading provider of software and services which
help businesses capitalise on the growth in mobile communication.
Its services, delivered in over 60 countries in Europe, the
Americas, MEA and India, help its clients to engage and transact
with their customers more efficiently through smarter mobile
engagement. The Company's solutions allow customers to use mobile
as a channel to create new revenue streams, as a CRM and customer
engagement channel, and as a channel to improve business
operations.
IMImobile's DaVinci suite of products is modular, scalable and
delivered through cloud infrastructure which is integrated into
mobile operator networks, internet services and social media
platforms. The products and solutions have helped IMImobile
establish a blue-chip client base of leading mobile operators and
global enterprises. Key customers include Vodafone, O2, Telefonica,
Aircel, Airtel, BSNL, AT&T, MTN, France Telecom, Centrica,
Coca-Cola, Universal Music, Tata, the AA, the BBC and major
financial institutions.
The Company is headquartered in London with offices in
Hyderabad, Atlanta and Dubai and has 650 employees worldwide.
IMImobile is quoted on the London Stock Exchange's AIM market with
the TIDM code IMO.
Chairman's Statement
It is with great pleasure that I introduce the Group's inaugural
statement as an AIM quoted company. Since the end of our financial
year ended 31 March 2014 we have successfully completed the
flotation of the Group and I would like to give a warm welcome to
our new shareholders. The listing on AIM, combined with this strong
set of results, helps position the Group well for continued future
growth and I wish to thank all our advisers for steering us through
the IPO process. I also welcome John Allwood and Simon Blagden as
Non-Executive Directors. John, a former CEO of Orange UK and Mirror
Group PLC, and Simon, former International CEO of The Quante Group
and current Non-Executive Chairman of Fujitsu UK, bring a wealth of
experience in telecoms, IT and media to the Group.
Since founding the Group we have been focused on the
opportunities created by the expansion of mobile operator networks
and their capacity to carry data services. The continued evolution
and growth of these networks and smartphones provides the
foundations for new business opportunities. Since we started the
business we have remained entrepreneurial in our approach to
product and market development and we shall remain so in what has
become a complex and competitive eco-system.
We have always focused on profitable and cash generative growth.
We have significantly developed the international footprint of our
business to fully leverage the intellectual property created by the
Group. I am pleased to report, therefore, that our successful
growth over the last year has been accompanied by deployments in
several new geographies.
In the year to 31 March 2014 revenues grew by 13% to GBP43.4m
(2013: GBP38.5m) with significant growth coming from the Middle
East and African region and continued growth from more mature
European markets. The fact that growth has come despite a
significant decline in the Indian market due to regulatory issues
is testament to the resilient and diversified nature of the
business.
Our strategy from the outset has been to create intellectual
property in mobile data and services that can be deployed in global
markets through a business model of recurring revenues. We believe
that our DaVinci platform and suite of enterprise applications are
well positioned to take advantage of the structural trends
surrounding mobility, social networking and cloud computing.
Chief Executive's Report
In the year to 31 March 2014 the Group has delivered good growth
across all relevant financial metrics and converted profits into
cash. Growth has been robust in Europe with significant growth
coming from the Middle East and Africa where a particularly good
year for licence sales boosted revenues and margins significantly.
The increase in revenues and profits has been achieved despite the
establishment of a new US office and sales presence in Atlanta and
against a backdrop of challenging conditions in India.
Our core products and services
Our market offerings, based on our own intellectual property,
consist of a mobile service delivery platform, the DaVInci ESP, a
suite of software applications and a set of technical, analytical
and creative professional services. The products and services
enable our customers to use mobile technologies to drive
incremental revenue, enhancecustomer engagement and improve
businessproductivity.
Revenue generation products and services
These are designed to deliver incremental revenue for clients
through mobile and social channels, including digital and mobile
content storefronts, mobile payments and caller ring back tone
solutions.
Customer engagement products and services
Use of these solutions enables clients to acquire, service,
engage and retain customers using mobile and digital channels and
includes multichannel customer communication, marketing automation,
social self-care and audience engagement solutions.
Business productivity products and services
These enable our clients to mobilise certain business processes
and improve employee productivity through mobile technologies.
These include field force management and customer care
solutions.
Our revenue models
We deliver our core products and services using different
revenue models that are based on the requirements of our customers.
The products are tailored to meet with our clients' requirements
and can be delivered via our cloud infrastructure either as a
managed service or self-service and can be licensed for on-premise
deployment.
Managed Solutions
A combination of software and professional services where we
work closely with our clients to deliver software using our cloud
infrastructure and assume the day to day management
responsibilities of the service as well as technical delivery and
platform maintenance. Managed Solution contracts tend to be
long-term and recurring.
Software as a Service (SaaS)
A provision of software or API connectivity which is used
directly by the client; this is supported and hosted using our
infrastructure in the cloud. The commercial model tends to be a mix
of recurring licence and support fees plus transactional revenues.
The on-going operational support requirements tend to be lower,
with variable third-party costs incurred, for example, in wholesale
SMS messaging or email costs. For blue-chip clients the services
often require deep integration into their own work-flows and
processes and consequently are long-term relationships.
Licence Fees
Software provided under a licence fee model is deployed in the
client's own network environment and sometimes sold in conjunction
with third-party hardware. The licence fee is typically paid up
front with an annual maintenance charge for ongoing support.
Regional performance
The Group is managed commercially on a regional basis with
centralised resources for software development, finance and general
management. A key operating metric for each region is Gross Profit
as there are considerable differences in gross margins across
regions, product lines and revenue models. Gross Profit also
measures most directly the value of the software and solutions
delivered by the Group which excludes the impact of network
infrastructure, third party hardware and content costs.
Europe
Gross Profit in Europe grew steadily by 8% during the year,
excluding the impact of discontinued operations. The margins for
SaaS and Managed Solutions grew as expected due to further
reductions in the cost of network infrastructure, a trend we expect
will continue.
We are well positioned to take advantage of several macro trends
which affect the UK market. Though revenue generation solutions for
traditional operator led content services are in decline, there are
growth opportunities in direct carrier billing and mobile payments
and in 2014 IMImobile became the UK market leader in payments
charged directly to the consumers' mobile bill.
The measurement and understanding of customer engagement is a
growing area for large enterprises and mobile operators. Our
previous successes and experience in this area led to several new
client wins during 2014, including a deployment with Mobile by
Sainsbury's, a Mobile Virtual Network Operator ("MVNO") launched by
Sainsbury's on the Vodafone network. We provide a managed solution
for customer engagement, the on-boarding experience of new
customers and campaign management.
The increasing trend for large enterprises to adopt cloud based
services and significant growth of digital communications with
their customers has also supported the growth of Gross Profit
derived from business productivity solutions. A particularly
innovative deployment completed during the year was the
"TweetServe" application developed in partnership with Twitter and
deployed for O2, allowing customers to manage their tariff and
account via their Twitter account. This "world first" solution
helps increase consumer satisfaction, reduce customer service calls
and add insight into specific consumer behaviour. This deployment
has also achieved significant industry recognition, winning awards
for the 'Best Use of Mobile for Customer Services'
Middle East and Africa
Gross Profit grew very strongly by 149%. Growth in recurring
revenue was 68% as further services and countries were launched
under Group agreements with MTN and Orange. In particular services
were successfully launched in Ivory Coast, Democratic Republic of
Congo, Botswana and Senegal.
It was an exceptionally good year for licence revenue as two
significant licence deals were signed with a global Systems
Integrator and leading operator group in the Middle East and
deployments completed in Kenya, Nigeria, Ghana and Iran. These
multi-million US dollar licence deals are typically for an
installation of the DaVinci ESP or multiple modules in the platform
and demonstrate the value inherent in the intellectual
property.
Though deployments can be lengthy and local network
infrastructure and connectivity unstable, the Group has
demonstrated an ability to deliver revenue generating services
successfully in challenging circumstances and as a result is well
placed to benefit from the predicted growth across Africa. In
addition the Group has built relationships throughout the Middle
East which position it for further growth across the region.
India and SE Asia
Gross Profit declined by 29% compared with 2013 of which 10% was
due to a depreciation of the Indian Rupee. The decline reflects a
fall of 12% in Revenues measured in local currency and is a direct
consequence of the implementation of new consumer protection
regulation that has impacted our customers, chiefly the mobile
network operators. In India our main activity is managing certain
content and value added telecom services for mobile operators and
tighter regulation requiring operators to seek additional consents
to sign customers up to these services led to a period of
transition as new third party consent gateways have been
implemented.
As a Group we have welcomed the changes as overly aggressive
marketing and over-charging had damaged consumer perception of
mobile services and we believe that in the long term the changes
will benefit the overall market.
During this period we have successfully won additional managed
service deals with a major operator in India as well as a new
operator group in Myanmar. We expect the full benefit of these
deals to be realised over the next few years.
We also were successful in winning a contract to supply a
regional state government in India covering 65m habitants, with an
mGovernance multi-channel platform that will enable citizens in
that state to access government and third party services via IVR
(Interactive Voice Response), USSD (Unstructured Supplementary
Service Data, allowing mobiles to communicate with service
providers' computers), SMS, Mobile internet and on-device apps.
Strategic Initiatives
We continue to focus on our long-term objective of building a
global business and see excellentopportunities for IMImobile to
grow both organically and via acquisition.
To this end, during the year we took a significant step in
establishing a truly global footprint with the opening of an office
in the US. The US marketis undergoing considerable change currently
and increasing competition amongst the US carriers is driving the
need for US carriers to increase customer retention and loyalty.
This represents an exciting opportunity for the Company to provide
its market-leading customer engagement solutions and we were
delighted to win our first major deal with a leading prepay
operator during the year. Weexpect to make significant commercial
progress in the next 12 monthsand in view of the scale of the
opportunity, we will continue to invest for long- term growth.
In addition, the market for the provision of mobile software and
services remains9 fragmented and we believe that IMImobile is well
placed to act as a consolidator, underpinned by its strong
financial position and broad based software platform. We continue
to seek selective acquisitions which offer complementary product
lines or customer bases, in line with our acquisition criteria,
where we see the potential to deliver attractive shareholder
value.
Outlook
The 2015 financial year has started well, building on the
progress achieved in 2014 with trading in line with Directors
expectations.
The contracts won last year will help to enhance revenues and
profitability in 2015 and beyond. Moreover, since the start of the
new financial year, the Company has renewed several major customer
contracts. Underpinned by strong repeat and recurring revenue
streams, we continue to build on the organic growth achieved to
date. We will also continue to invest in our innovative solutions,
building our business in both established geographies and in newer
regions such as the US, which represents an exciting growth
prospect for the Company.
Further, following the successful IPO of the Company in June,
our strong financial position and cash balances will support our
ambition to act as a consolidator within our industry and
accelerate our growth potential.
IMImobile remains well placed to take advantage of the trends
driven by the proliferation of mobile and data networks and smart
devices and we look forward to the future with confidence.
Financial Review
Revenue and Gross Profit
For the year to 31 March 2014 total revenue increased by 13% to
GBP43.4m (2013: GBP38.5m) and gross profit increased by 18% to
GBP27.9m (2013: GBP23.5m). The Board considers that Gross Profit is
the key operational measure in the business.
Geographical split of revenues and gross profit is as
follows:
Revenue
Year ended 31 March 2014 2013 Growth/
(decline)
GBPm GBPm
------------------------- ------- ------- ------------
Europe 21.2 20.6
------------------------- ------- ------- ------------
Less: Greek subsidiary (0.1) (0.3)
------------------------- ------- ------- ------------
Europe underlying 21.1 20.3 4%
------------------------- ------- ------- ------------
Middle East & Africa 13.3 6.5 104%
------------------------- ------- ------- ------------
India & South East
Asia 8.5 10.8 (21%)
------------------------- ------- ------- ------------
Other 0.4 0.6 (31%)
------------------------- ------- ------- ------------
Total (including Greek
subsidiary) 43.4 38.5 13%
------------------------- ------- ------- ------------
Gross Profit
Year ended 31 March 2014 2013 Growth/
(decline)
GBPm GBPm
---------------------------- ------- ------- ------------
Europe 11.0 10.4
---------------------------- ------- ------- ------------
Less: Greek subsidiary(4) (0.1) (0.3)
---------------------------- ------- ------- ------------
Europe (underlying) 10.9 10.1 8%
---------------------------- ------- ------- ------------
Middle East & Africa 10.7 4.3 149%
---------------------------- ------- ------- ------------
India & South East
Asia 5.9 8.3 (29%)
---------------------------- ------- ------- ------------
Other 0.3 0.5 (40%)
---------------------------- ------- ------- ------------
Total (including Greek
subsidiary) 27.9 23.5 18%
---------------------------- ------- ------- ------------
4 Non-core Greek subsidiary disposed of in May 2013
The Europe region gross profit grew by 8% in the year after
removing the impact of the non-core Greek subsidiary which was sold
in May 2013. Gross margin in Europe in the year was 51.8% up from
50.6% in 2013 in part as a consequence of the declining cost of
third party network infrastructure.
The Middle East & Africa (MEA) region had a very strong year
as a result of year on year increases from both existing managed
solutions contracts and licence fees, with gross profit increasing
by 149% to GBP10.7m (2013: GBP4.3m). Gross profit margin in MEA was
up to 80.6% from 66.2% reflecting the increased proportion of
licence fees recognised during the period.
In GBP the Indian and SEA region gross profit declined in the
year by 29% to GBP5.9m (2013: GBP8.3m). A significant proportion of
the year on year decline was attributable to the weakening of the
Indian Rupee against the pound, and in local currency gross profit
fell by 20%. The major reason for the decline in gross profit in
local currency was the implementation of regulations in the Indian
market imposed by the Telecom Regulatory Authority of India ("TRAI
Regulations") which affected the managed solutions provided to the
mobile operators in India. The TRAI Regulations include limitations
on the volume of promotions that can be sent to consumers and the
requirement for additional third-party consent to be obtained prior
to the billing of any consumers for services consumed via the
mobile device. The implementation of regulations was substantially
completed during July 2013, and revenues were stable throughout the
second half of the year.
Sales, marketing and general expenses
Sales, marketing and general expenses in the year were GBP23.0m
(2013: GBP20.6m) including depreciation and amortisation of GBP2.1m
(2013: GBP2.6m) and non-cash share based payment charge of GBP0.2m
(2013: GBP0.5m). The increase in expenses was largely attributable
to increased headcount in sales, commercial and product teams
responsible for new business and proposition development.
Group operating profit and adjusted EBITDA
Operating profit for the year to 31 March 2014 was GBP4.9m
(2013: GBP3.0m) and adjusted EBITDA was GBP7.2m (2013: GBP6.1m)
representing an increase of 19.0% against the prior year. Adjusted
EBITDA margin rose to 16.6% from 15.8%.
Year ended 31 March 2014 2013
GBPm GBPm
-------------------------------------- ------- -------
Operating profit 4.9 3.0
-------------------------------------- ------- -------
Add: IPO costs 0.1 -
Operating profit before exceptional
items 5.0 3.0
-------------------------------------- ------- -------
Add: Depreciation and amortisation 2.1 2.6
Add: Non-cash share based payment
charge 0.1 0.5
-------------------------------------- ------- -------
Adjusted EBITDA 7.2 6.1
-------------------------------------- ------- -------
Adjusted EBITDA % 16.6% 15.8%
-------------------------------------- ------- -------
Group cash flow and working capital
Year-end cash and cash equivalents were GBP9.3m (2013: GBP4.6m).
There were no borrowings at 31 March 2014 (2013: GBP1.3m). Cash
generated from operations was GBP8.7m (2013: GBP6.6m) and
represents an operating cash flow conversion of 121% of Adjusted
EBITDA (2013: 108%).
Group working capital is made up as follows:
Year ended 31 March 2014 2014 2013
GBPm GBPm
------------------------------ -------- --------
Cash and cash equivalents 9.3 4.6
Trade and other receivables 21.4 18.8
------------------------------ -------- --------
Trade and other payables (20.4) (16.8)
------------------------------ -------- --------
Net working capital 10.3 6.6
------------------------------ -------- --------
Trade receivables and payables include "pass through" amounts
generated from mobile payment transactions. The receivables are
from mobile operators and payables to customers who use IMImobile's
payment APIs. These amounts are excluded from revenues and cost of
sales, as the Group accounts only for the commission earned on such
transactions within revenue as it is not the principal obligor in
the arrangement.
Group profit after tax
Profit after tax was GBP3.9m (2013: GBP2.1m) after the impact of
IPO costs of GBP0.1m (2013: GBPnil); share based payment charges of
GBP0.1m (2013: GBP0.5m) and a one-off gain from the disposal of a
subsidiary of GBP0.3m (2013: nil).
Group taxation
The tax charge for the year was GBP1.3m (2013: GBP0.6m). The
effective rate of tax for the year was 25.5% (2013: 22.1%).
Group Capital expenditure
Capital expenditure during the year was GBP1.9m (2013: GBP1.6m)
split between plant, property and equipment of GBP1.7m (2013:
GBP1.3m) and third party software GBP0.2m (2013: GBP0.3m).
IMIMOBILE PLC COMPANY BALANCE SHEET
As at 31 March 2014
As at
31 March
2014
GBP
Current assets
Cash and cash equivalents -
Unpaid share capital
due from related
parties 100
Net current assets 100
Equity attributable
to the owners of
the parent
Share capital 100
Total equity 100
1. Basis of preparation
IMImobile PLC was incorporated on 4 December 2013 and did not
trade within the 17 week period ended 31 March 2014. As a result no
income statement, or cash flow statement, has been presented for
the Company within this preliminary announcement.
On 27 June 2014 the Company was successfully admitted to AIM and
issued new shares and used part of the proceeds from the initial
placing to pay the consideration for the acquisition of 76% of the
issued share capital of IMI Mobile Private Limited. The Company and
its NOMAD, Spark Advisory Partners Limited, have entered into a
relationship agreement with the two founding shareholders of IMI
Mobile Private Limited who own 24% of the issued share capital of
IMI Mobile Private Limited. The relationship agreement gives the
Founders the right (but not the obligation) to exchange all of
their IMI Mobile Private Limited shares for ordinary shares in the
Company on the basis of one IMI Mobile Private Limited share for
three ordinary shares in the Company.
Whilst at 31 March 2014 the Company had no trade or assets and
had not completed the acquisition of IMI Mobile Private Limited,
the Directors believe that the provision of additional information
on the results of IMI Mobile Private Limited and its subsidiaries
for the year ended 31 March 2014 and its financial position as at
31 March 2014, together with comparative information for the prior
year, is necessary in order to present a true and fair view of the
Company's financial statements. This additional information is
described as the Pro-Forma Consolidated Financial Information and
is presented in note 3
While the financial information of the Company contained in this
unaudited preliminary announcement has been prepared under the
historical cost convention in accordance with applicable United
Kingdom law and accounting standards, this announcement as it
refers to the Company, does not itself contain sufficient
information to comply with UK GAAP.
The information for the period ended 31 March 2014 does not
constitute statutory accounts for the purposes of section 435 of
the Companies Act 2006. A copy of the accounts for the year ended
31 March 2014 will be delivered to the Registrar of Companies. The
audit of the statutory accounts for the period ended 31 March 2014
is not yet complete. These accounts will be finalised on the basis
of the financial information presented by the Directors in this
preliminary announcement and will be delivered to the Registrar of
Companies following the Company's annual general meeting.
At 31 March 2014 the Group had net assets of GBP13.9 million
including GBP9.3 million of cash and cash equivalents (31 March
2013: net assets of GBP10.0 million including GBP4.6 million of
cash and cash equivalents). The successful listing resulted in net
proceeds for the Company of approximately GBP8 million (after
considering fees and the acquisition of the Group). In determining
whether the Company's accounts can be prepared on the going concern
basis, the directors considered the Company, and Group's, business
activities together with factors likely to affect its future
development, performance and its financial position including cash
flows, liquidity position and the principal risks and uncertainties
relating to its business activities. Considering this and the
future prospects of the Group and its current net asset position
the directors have a reasonable expectation that the Company has
adequate resources to continue in operational existence for the
foreseeable future. Thus they continue to adopt the going concern
basis of accounting in preparing the financial statements
2. Subsequent events
On 16 June 2014 the Company agreed to acquire the IMImobile
Private Limited Shares from each of the non-India resident minority
shareholders for a cash consideration three times the placing
price. The total consideration payable by the Company (before
deduction of Commissions and tax) is GBP3,629,106. Such
consideration was paid by the Company from the proceeds of the
placing shortly after admission.
On 16 June 2014 the Company issued a letter to the India
resident minority shareholders in IMI Mobile Private Limited.
Pursuant to the terms of the letter the Company agreed to acquire
the IMI Mobile Private Limited shares owned by the shareholders for
a cash price of not less than INR 68.18. Following acceptance of
these terms the Company served notice to the shareholders informing
them that the Company intends to acquire each of the IMImobile
India Private Limited shares at a price equal to three times the
placing price less an amount equal to commission. The aggregate
consideration payable by the Company is GBP2,798,622 which was paid
by the Company from the proceeds of the placing shortly after
admission.
On 18 June 2014 the Company entered into an agreement with
Tarimela Business Holdings Private Limited and Shyamprasad Bhat
pursuant to which the Company agreed to acquire 909,034 IMI Mobile
Private Limited shares from Tarimela Business Holdings Private
Limited and 157,809 IMI Mobile Private Limited shares from
Shyamprasad Bhat for a cash consideration three times the placing
price. The aggregate consideration payable to Tarimela Business
Holdings Private Limited and Shyamprasad Bhat was GBP3,272,522 and
GBP568,112 respectively. Such consideration was paid by the Company
from the proceeds of the placing shortly after admission.
On 18 June 2014 the Company entered into an agreement with the
Mauritian Shareholders pursuant to which the Company agreed to
acquire 6,682,400 IMI Mobile Private Limited shares from the
Mauritian Shareholders in consideration of the allotment of
20,046,200 Ordinary shares. In addition the Company agreed to
acquire a further 2,666,570 IMI Mobile Private Limited shares from
the Mauritian shareholders for cash. Each IMI Mobile Private
Limited share was acquired for a cash price equal to three times
the Placing Price and the aggregate consideration payable by the
companies is GBP9,599,652. Such consideration was paid by the
Company from the proceeds of the placing shortly after
admission.
On 27 June 2014 the Company was successfully admitted to trading
on AIM, a market operated by the London Stock Exchange. The initial
placing, which comprised 25,000,000 Ordinary shares at GBP1.20 per
Ordinary Share, raised gross proceeds of GBP30,000,000.
GBP19,868,014 of the proceeds raised was used by the Company to
satisfy its obligations to pay the cash consideration for the
acquisition of IMI Mobile Private Limited, and its subsidiaries,
which are summarised above.
3. Additional information
PRO-FORMA CONSOLIDATED FINANCIAL INFORMATION
Pro-Forma consolidated Income statement
For the year ended 31 March 2014
Year ended Year ended
31 March 31 March
Notes 2014 2013
GBP000 GBP000
3.2,
Revenue 3.3 43,404 38,529
Cost of sales (15,505) (14,983)
Gross profit 3.3 27,899 23,546
Sales, marketing and
general expenses (23,004) (20,589)
Operating profit 4,895 2,957
Investment income 31 48
Finance costs (5) (306)
Gain on sale
of subsidiary 3.9 340 -
Profit before
tax 5,261 2,699
Tax 3.4 (1,342) (597)
Profit for the
period 3,919 2,102
The accompanying notes are an integral part of the Pro-Forma
consolidated Financial Information and are all attributable to
continuing operations.
PRO-FORMA CONSOLIDATED FINANCIAL INFORMATION
Pro-Forma consolidated Statement of Comprehensive
Income
For the year ended 31 March 2014
Year
Year ended ended
31 March 31 March
2014 2013
GBP000 GBP000
Profit for the year 3,919 2,102
Items that may be reclassified
subsequently to profit
or loss:
Exchange differences on
translation of foreign
operations (330) 789
Other comprehensive income
for the year (330) 789
Total comprehensive income
for the year 3,589 2,891
The accompanying notes are an integral part of the Pro-forma
consolidated Financial Information.
PRO-FORMA CONSOLIDATED FINANCIAL INFORMATION
Pro-Forma consolidated Statement of Changes in Equity
For the year ended 31 March 2014
Share
based Retained
Share Share Translation payment Earnings/
capital premium reserve reserve (Deficit) Total
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
Balance at 1 April 2012 1,429 2,267 1,719 593 570 6,578
Profit for the year - - - - 2,102 2,102
Foreign exchange differences - - 789 58 - 847
Share based payment charge - - - 471 - 471
Balance at 31 March 2013 1,429 2,267 2,508 1,122 2,672 9,998
Profit for the year - - - - 3,919 3,919
Foreign exchange differences - - (330) - - (330)
Share based payment charge - - - 150 - 150
Proceeds from share issue 79 494 - - - 573
Dividends - - - - (415) (415)
Balance at 31 March 2014 1,508 2,761 2,178 1,272 6,176 13,895
The accompanying notes are an integral part of the Pro-Forma
consolidated Financial Information.
PRO-FORMA CONSOLIDATED FINANCIAL INFORMATION
Pro-Forma consolidated Statement of Financial Position
As at 31 March 2014
As at As at
31 March 31 March
Notes 2014 2013
GBP000 GBP000
Non-current assets
Goodwill 3.5 7,861 7,878
Other intangible
assets 475 532
Available-for-sale
financial assets 424 374
Property, plant and
equipment 5,134 6,623
Deferred tax assets 871 1,297
Total non-current
assets 14,765 16,704
Current assets
Cash and cash equivalents 3.6 9,305 4,643
Trade and other receivables 3.7 21,367 18,789
Total current assets 30,672 23,432
Current liabilities
Trade and other payables (20,402) (15,522)
Bank loans - (1,320)
Total current liabilities (20,402) (16,842)
Net current assets 10,270 6,590
Non-current liabilities
Redeemable preference
shares 3.10 (10,895) (13,031)
Provision for defined
benefit gratuity (245) (252)
Deferred tax liabilities - (13)
Total non-current
liabilities (11,140) (13,296)
Net assets 13,895 9,998
Equity attributable
to the owners of
the parent
Share capital 1,508 1,429
Share premium 2,761 2,267
Other reserves 1,272 1,122
Translation reserve 2,178 2,508
Retained earnings 6,176 2,672
Total equity 13,895 9,998
The accompanying notes are an integral part of the Pro-Forma
consolidated Financial Information.
PRO-FORMA CONSOLIDATED FINANCIAL INFORMATION
Pro-Forma consolidated Cash Flow Statement
For the year ended 31 March 2014
Year ended Year ended
31 March 31 March
Notes 2014 2013
GBP000 GBP000
Net cash from operating
activities 3.8 8,748 6,572
Investing activities
Interest received 31 48
Purchases of intangibles (186) (259)
Purchases of property, plant
& equipment (1,683) (1,289)
Available for sale investment
in third party equity (50) -
Disposal of subsidiary 3.9 (566) -
Net cash used in investing
activities (2,454) (1,500)
Financing activities
Repayment of borrowings
- Bank loans (1,220) (1,751)
Issue of borrowings - Related
party director loans (301) (179)
Proceeds from issuance of
Ordinary shares 572 -
Dividends paid to owners
of the parent (415) -
IPO related expenditure (113)
Net cash used in financing
activities (1,477) (1,930)
Net increase in cash and
cash equivalents 4,817 3,142
Cash and cash equivalents
at beginning of the year 4,643 1,443
Effect of foreign exchange
rate changes (155) 58
Cash and cash equivalents
at end of the year 3.6 9,305 4,643
The accompanying notes are an integral part of the Pro-Forma
consolidated Financial Information.
PRO-FORMA CONSOLIDATED FINANCIAL INFORMATION
Notes to the Pro-Forma Financial Information
3.1 Basis of preparation of additional information
The financial information contained in the Pro-Forma
consolidated Financial Information for the years ended 31 March
2013 and 2014 has been prepared applying the recognition and
measurement principles set out in International Financial Reporting
Standards as adopted for use in the European Union but do not
contain all disclosures required by those standards.
The consolidated Financial Information, hereafter referred to as
"the Group", is prepared on the historical cost basis. A
presentational currency of UK Pounds Sterling has been used and
accounts have been translated from other functional currencies into
UK Pounds Sterling. The preparation of the Pro-forma consolidated
Financial Information in conformity with IFRS requires the use of
certain critical accounting estimates. It also requires management
to exercise its judgement in the process of applying the Group's
accounting policies.
The preparation of the Pro-forma consolidated Financial
Information in conformity with International Financial Reporting
Standards requires management to make judgements, estimates and
assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at
the date of the Pro-forma consolidated Financial Information and
the reported amounts of revenue and expenses during the year.
Actual results could differ from the estimates.
Basis of consolidation
The Pro-forma consolidated Financial Information incorporates
the consolidated financial information of IMI Mobile Private
Limited and its subsidiaries. Control is achieved where IMI Mobile
Private Limited has the power to govern the financial and operating
policies of an entity so as to obtain benefits from its
activities.
Where necessary, adjustments are made to the financial
information of subsidiaries to bring the accounting policies into
line with those used by the Group. Inter-company balances and
transactions, including inter-company profits and unrealised
profits and losses are eliminated on consolidation.
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.
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 acquiree on an
acquisition-by-acquisition basis. When the Group ceases to have
control, any retained interest in the entity is remeasured to its
fair value at the date when control is lost, with the change in
carrying amount recognised in profit or loss.
As described in Note 1, the additional information does not
reflect the acquisition of IMI Mobile Private Limited by IMImobile
PLC. This will be accounted for as a capital reorganisation,
reflecting the substance of the transaction. Hence the consolidated
financial statements of the company will be prepared on the same
basis as presented in this Pro-Forma Financial Information with the
24% interest in IMI Mobile Private Limited owned by the two
founding shareholders accounted for as a non-controlling
interest.
3.2 Significant accounting policies
The principal accounting policies set out below have been
applied consistently by the Group entities:
Goodwill
Goodwill arises on the acquisition of subsidiaries and
represents the excess of the consideration transferred over the
Group's interest in the net fair value of the net identifiable
assets, liabilities and contingent liabilities of the acquiree and
the fair value of the non-controlling interest in the acquiree.
For the purpose of impairment testing, goodwill acquired in a
business combination is allocated to each cash generating unit
("CGU" or "unit"), or Groups of CGUs, that is expected to benefit
from the synergies of the combination. Each unit or Group of units
to which the goodwill is allocated represents the lowest level
within the entity at which the goodwill is monitored for internal
management purposes. Goodwill is monitored at the operating segment
level.
Goodwill impairment reviews are undertaken annually or more
frequently if events or changes in circumstances indicate a
potential impairment. The carrying value of goodwill is compared to
the recoverable amount, which is the higher of value in use and the
fair value less costs of disposal. Any impairment is recognised
immediately as an expense and is not subsequently reversed.
Accounts receivable
Trade receivables are amounts due from customers for merchandise
sold or services performed in the ordinary course of business. If
collection is expected in one year or less (or in the normal
operating cycle of the business if longer), they are classified as
current assets. If not, they are presented as non-current assets.
Trade receivables are recognised initially at fair value and
subsequently measured at amortised cost using the effective
interest method, less provision for impairment.
Accounts payable
Trade payables are obligations to pay for goods or services that
have been acquired in the ordinary course of business from
suppliers. Accounts payable are classified as current liabilities
if payment is due within one year or less (or in the normal
operating cycle of the business if longer). If not, they are
presented as non-current liabilities. Trade payables are recognised
initially at fair value and subsequently measured at amortised cost
using the effective interest method.
Revenue recognition
Revenue comprises the fair value of the consideration received
or receivable for the sale of goods and services in the ordinary
course of the Group's activities. Revenue is shown net of returns,
rebates and discounts and after eliminating sales within the
Group.
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 amount of
revenue is not considered to be reliably measurable until all
contingencies relating to the sale have been resolved. 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 enters into arrangements to deliver multiple
elements (licensing, servicing and maintenance), such elements are
separated for recognition based on stand-alone value where sold and
delivered separately. If such elements cannot be separated they are
treated as a single deliverable and recognised over the period of
delivery when the criteria for recognition have been met and
customer acceptance received. Amounts incurred but not yet billed
are classified as unbilled amounts in work in progress. Where the
Group acts as principal in the sale of goods and content, revenue
is recognised on a gross basis.
Managed solutions and SaaS contracts
Revenues from managed solutions contracts are recognised
proportionally over the period during which the services are
rendered. Revenue from content related sales is recognised on
delivery of the content, when all significant contractual
obligations have been satisfied, the significant risks and rewards
of ownership have been transferred and no effective ownership
control is retained. Revenues are billed up to 60 days after month
end and classified as amounts billable not yet invoiced till this
point.
Premium rate revenues, within SaaS contracts, recognised within
turnover relate only to the commission earned on hosting each
service and are recognised at the point of delivery to the
customer. Pass through revenues collected on behalf of the
customers are not recognised within turnover.
Licence fees and royalties
Revenue from sale of end user licences is recognised at fair
value on customer acceptance following installation at the
customer's locations as per the terms of the contract.
Operating segments
Operating segments are reported in a manner consistent with the
internal reporting provided to the chief operating decision-maker.
The chief operating decision-maker, who is responsible for
allocating resources and assessing performance of the operating
segments, has been identified as the board of directors that makes
strategic decisions.
3.3 Business and geographical segments
Management considers the business from both a geographical and
product perspective. Geographically, management considers the
performance in Europe (predominantly relating to the UK), India and
South East Asia (SEA), Middle East and Africa (MEA) and the rest of
the world. From a product perspective management considers the
performance within Managed solutions, Software as a service (SaaS)
and Licence fees.
The performance of the operating segments is assessed based on a
measure of revenue and gross profit. Any sales between related
parties are carried out at arm's length.
The Group does not regularly provide information in relation to
the assets or liabilities of operating segments to management.
Segment revenue and results
The following is an analysis of the Group's revenue and results
by delivery model.
Software
Managed as a Service Licence
solutions (SaaS) fees Unallocated Total
GBP000 GBP000 GBP000 GBP000 GBP000
Year ended 31
March 2013
Revenue from external
companies 21,605 13,178 3,746 - 38,529
Intersegment revenues - - 1,764 - 1,764
Gross profit 15,181 5,666 2,699 - 23,546
Total assets 24,141 11,479 2,666 1,850 40,136
Year ended 31
March 2014
Revenue from external
companies 20,336 15,691 7,377 - 43,404
Intersegment revenues - - 503 - 503
Gross profit 14,466 6,507 6,926 - 27,899
Total assets 23,752 12,423 7,486 1,776 45,437
During the year revenues from Customer A and Customer B
accounted for 12% (2013: 7%) and 15% (2013: 11%) of the Group's
turnover.
Geographical revenue and results
The following is an analysis of the Group's revenue and results
by geographical segment:
Year ended Year
31 March ended
2014 31 March
2013
GBP000 GBP000
Revenue
Europe 21,198 20,627
India and SEA 8,541 10,799
MEA 13,243 6,487
Rest of the world 422 616
43,404 38,529
Year ended Year
31 March ended
2014 31 March
2013
GBP000 GBP000
Non-current assets
Europe 9,932 10,540
India and SEA 3,739 5,176
MEA 1,090 975
Rest of the world 4 13
14,765 16,704
Sales between segments are carried out at arm's length. The
revenue from external parties reported is measured in a manner
consistent with that in the Pro-Forma Consolidated Income
Statement. Revenues are attributed to countries on the basis of the
customers' locations.
The accounting policies of the reportable segments are the same
as the Group's accounting policies described in note 3.2 for each
period. The Group measures segment profit and loss as gross profit
as reported. The Group does not allocate general admin, marketing
and sales expenses to reported segments.
3.4 Tax
Year ended Year ended
31 March 31 March
2014 2013
GBP000 GBP000
Current tax
India tax expense 835 257
UK tax expense - 237
Foreign tax expense 3 -
Withholding tax
expense 547 232
Adjustments in respect
of prior periods (346) 111
Current tax charge 1,039 837
Deferred tax
Current year 12 (240)
Adjustments in respect
of prior periods 291 -
Deferred tax charge/(credit) 303 (240)
1,342 597
The total tax charge for the year can be reconciled to the
result per the Pro-Forma consolidated Income Statement as
follows:
Year ended Year
31 March ended
2014 31 March
2013
GBP000 GBP000
Profit before tax 5,261 2,699
Tax at the UK corporation
tax rate of 23% (2013:
24%) 1,210 648
Effect of overseas tax
rates 24 (11)
Non-taxable disposal of
subsidiary (81) -
Expenses not deductible
for tax purposes 120 180
Tax losses on which deferred
tax not recognised 45 90
Effect of change in UK
tax rate 79 6
Tax adjustments in respect
of previous years (55) 111
Recognition of deferred tax assets
not previously recognised - (427)
Total tax charged in the
income statement 1,342 597
Taxation for each region is calculated at the rates
prevailing in the respective jurisdictions. Prior
year adjustments relate to the routine confirmation
and agreement of the final tax position in local
jurisdictions.
One of the regions the Group operates in is the
Dubai Airport Free Zone (IMI Mobile Vas Ltd FZE).
The Dubai Airport Free Zone (FZE) operates under
the laws, politics and direction of the Chairman
H. H. Sheikh Ahmed Bin Saeed Al Maktoum. The operations
in the FZE are not subject to income tax and as
such no provision has been made for deferred taxes
related to operations or assets and liabilities
of these operations.
Deferred tax in respect to temporary differences arising from
long-term employee benefits including retirement benefits,
provisions for doubtful debts, of carried forward trading losses
available to offset profits in future periods and the difference
between tax and accounting depreciation have been recognised in the
income statement.
The finance act 2013 reduced the UK standard rate of corporation
tax from 23% to 21% from 1 April 2014 and 21% to 20% from April
2015. All UK deferred tax assets and liabilities have been
recognised at 20% (2013: 23%).
3.5 Goodwill
Goodwill is monitored by management at the operating segment
level. The following is a summary of goodwill allocation for each
operating segment:
Foreign
Exchange
Opening Additions Disposals Impairment Movement Closing
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
31 March 2013
Managed solutions 4,724 39 - (39) 1 4,725
Cloud based services
/ SaaS 3,152 - - - 1 3,153
Total 7,876 39 - (39) 2 7,878
31 March 2014
Managed solutions 4,725 - - - (9) 4,716
Cloud based services
/ SaaS 3,153 - - - (8) 3,145
Total 7,878 - - - (17) 7,861
The recoverable amount of all CGU's has been determined based on
value-in-use calculations. These calculations use pre-tax cash flow
projections based on financial budgets approved by management
covering a five-year period. Cash flows beyond the five-year period
are extrapolated using the estimated growth rates stated below. The
long-term growth rates are management's conservative estimates. The
discount rates used are pre-tax and reflect specific risks relating
to the relevant operating segments.
No goodwill has been allocated to Licence and professional fees
as it is not expected to benefit from the synergies of the business
combination. Operating segments serve a common group of customers
such that the key assumptions used for value-in-use calculations
for both operating segments are as follows:
No goodwill has been allocated to licence and professional fees
as it not expected to benefit from the synergies of the business
combination. Operating segments serve a common group of customers
such that the key assumptions used for value-in-use calculations
for both operating segments are as follows:
31 March
2014
Long-term growth
rate: 3.0%
Discount rate: 15.0%
Value in use is calculated for the various CGU's based on
approved business plans and forecasts taking into account certain
variables for each CGU. Below is a description of the principal
variables that have been considered for each CGU with significant
goodwill.
Long-term growth rate
In all cases, impairment tests are performed using the projected
cash flows based on board approved forecasts and strategic plans
over a five year period. Cash flow projections from the sixth year
are calculated using an expected constant growth rate.
Discount rate
The Pre-tax discount rates used are disclosed above and take
into account the market risk rate associated with the company. A
discount factor is calculated using the discount rate and applied
to future projected cash flows.
The Group has conducted a sensitivity analysis on the impairment
test of each CGUs carrying value. A cut in the growth rate by 3%
percentage points would not cause the carrying value of goodwill to
be less than its recoverable amount.
3.6 Cash and cash equivalents
As at As at
31 March 31 March
2014 2013
GBP000 GBP000
Unrestricted
Cash on hand and at bank 9,265 4,642
Restricted
Short-term bank deposits 40 1
Cash and cash equivalents (excluding
bank overdrafts) 9,305 4,643
Restricted short-term bank deposits represent cash balances
deposited in bank accounts attracting a preferential interest rate
and are typically deposited for a period of 90 to 180 days.
Preferential interest rates are agreed in advance of the deposit
being transferred and depend on the prevailing local rates and
market conditions at the time.
3.7 Trade and other receivables
As at As at
31 March 31 March
2014 2013
GBP000 GBP000
Trade receivables 10,462 6,937
Other receivables 138 73
Refundable deposits 162 645
Unbilled amounts in work
in progress 2,143 725
Amounts billable not
yet invoiced 6,429 8,752
Withholding tax debtor 1,553 1,477
Due from related parties 480 180
21,367 18,789
The fair value receivables approximate their carrying values as
at 31 March 2014 and 31 March 2013.
As of 31 March 2014, trade receivables of GBP789,000 (31 March
2013 GBP1,509,000) were past 60 days due but not impaired. These
relate to a number of independent customers for whom there is no
recent history of default.
3.8 Notes to the Pro-Forma consolidated Cash Flow Statement
Year
Year ended ended
31 March 31 March
2014 2013
GBP000 GBP000
Cash flows from operating
activities:
Profit before taxation 5,261 2,699
Adjustments:
Finance cost expense 5 306
Interest income (31) (48)
Depreciation of property,
plant and equipment 1,951 2,473
Share-based payments 150 471
IPO(5) 68 -
Gain on sales of subsidiary (340) -
Amortisation of intangible
assets 155 126
Impairment of intangibles - 39
Foreign exchange on employee
services - 58
Operating cash flows before
movements in working capital: 7,264 6,124
(Increase)/decrease in
receivables (4,915) 1,256
Increase/(decrease) in
payables 6,694 (1,172)
Increase/(decrease) in provision
for defined benefit gratuity plan (7) 14
Foreign exchange loss/(gain)
on working capital (283) 656
Cash generated from operations 8,753 6,878
Finance costs paid (5) (306)
Tax paid - -
Net cash generated from
operating activities 8,748 6,572
(5) GBP739,000 of costs related to the IPO were incurred by the
Group in the year ended 31 March 2014 of which GBP671,000 are held
in prepayments at the balance sheet date awaiting transfer to
equity on completion of the transaction. The remaining GBP68,000 of
costs have been expensed in the period.
3.9 Disposal of subsidiary
On 21 May 2013, the Group sold WIN Societe Anonyme Wireless
Products and Services to Moviestar Entertainment Limited for EUR1.
Net assets disposed of were GBP340,000, comprising assets of
GBP1,260,000 and liabilities of GBP1,600,000. The disposal resulted
in a gain on disposal of GBP340,000 recognised through the
Pro-Forma consolidated income statement and the cash balance on the
date of disposal was GBP566,000 as stated in the Pro-Forma
consolidated cash flow statement. The trade from this subsidiary is
considered immaterial to the Group by the Board and hence, is not
categorised as a discontinued operation.
3.10 Redeemable preference shares
The Group had in issue 4,711,768 redeemable preferences shares,
issued at a premium of 220 Indian Rupees over their nominal value
of 10 Rupees. The shares carry a dividend entitlement of 0.01% per
annum. In the event equity shareholders receive a dividend in
excess of this, the preference shareholders are entitled to the
same dividend as the equity shares. During the year ended 31 March
2014 the preference shareholders waived their entitlement to such
dividends. The two classes of preference shares have been detailed
below:
Preference share A (optionally convertible preference
shares)
2,016,216 optionally convertible Series A Preference shares were
issued on 29 June 2006 and 521,739 were issued on 5 November 2009;
both have a conversion ratio of 1.
Preference share A holders were entitled to, at their option,
require IMI Mobile Private Limited to convert all or any part of
the shares held by it into equity shares and without additional
payment.
On 20 June 2014 the optionally convertible preference shares
were converted to equity prior to the listing of the Company.
Please refer to note 2 for further details related to the listing
of the Company.
Preference share B (Mandatorily convertible preference
shares)
2,173,813 optionally convertible Series A Preference shares were
issued on 5 November 2009. Upon subscription to the Series B
Preference Shares by the Investor, the Series B Conversion Ratio
shall be such as gives the Investor a shareholding of 15.21 per
cent in the share capital of the company at Closing on a Fully
Diluted Basis.
Preference share B holders are entitled to, at their option,
require the company to convert all or any part of the shares held
by it into equity shares. In the event of a qualified IPO or one
day prior to the date that is 20 years from the date of issuance,
preference shares held by preference shareholders B will be
mandatorily convertible into equity shares.
On 20 June 2014 the optionally convertible preference shares
were converted to equity prior to the listing of the Company.
Please refer to note 2 for further details related to the listing
of the Company. On initial recognition the preference shares have
been classified in borrowings and no amounts have been allocated to
equity based on the redemption terms.
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR QKDDBKBKBKCK
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