Geospatial
productivity &collaboration
IQGeo Group plc Annual Report 2020

Who are we?

IQGeo is a market leading
developer of geospatial
software for the telecoms
and utility industries
IQGeo’s end-to-end geospatial
software for the telecoms and utility
industries accelerates productivity andcollaboration across enterprise sales,planning, design, construction andmaintenance processes. Our mobile-firstand cloud-native solutions create andmaintain a real-time, accurate view ofcomplex network assets, dramatically
improving the quality of network data.

The open architecture of the IQGeo
Platform easily integrates with virtually
any Geographical Information System(GIS) or application, providing a single
source of network truth that eliminates
data silos and streamlines operational
processes. The software runs on
workstations, tablets and mobile phones,
online or offline, closing data gaps andcutting backlogs between field andoffice operations.

IQGeo is helping telecoms and utility
network operators around the world
meet their digital transformation
ambitions and operational KPIs by saving
time and money, while improving safety
and enhancing customer satisfaction.

Visit us online

www.iqgeo.com

In 2020, IQGeo won a DiamondTechnology award for our new
Network Manager for telecoms
software product. This is thesecond year in a row that
IQGeo has been recognisedwith this prestigious award from
Broadband Technology Report.

Strategic report

Highlights
Despite the Covid-19 pandemic and difficult business conditions,
IQGeo delivered strong business growth in 2020.
Meeting our key sales targets, we delivered new customers across all our operational geographies while successfully
continuing our transition to a subscription-based software revenue model. Business execution has proven to be resilient during
the pandemic. While we saw some initial, short-term, project delays from our customers and prospects, demand remains
high for telecoms and utility services and operators continue to invest in fibre, 5G and smart grid rollout. The pandemic
has highlighted the important role of these organisations, providing critical national infrastructure, and their employees are
generally designated as key workers in order to ensure network uptime for vital services.

The results deliveredin 2020 are atestament to the hard
work and talent of ourorganisation.
Richard Petti
Chief Executive Officer

Exit Annual Recurring
Revenue (“ARR”)1
(£m)
5.3

2020
2019

In‑year recurring

165% revenues (£m)

2018 1.1

2019
2018

2019

1.6

2018

0.9

Gross margin

42% (%)
10.7

2020

3.2

2020

2.0

IQGeo own
product orders (£m)

96%

7.5
3.4

10%
52

2020
2019

42

2018

44

Contents
1.

Strategic report

2. Corporate governance

3. Financial statements

1

Highlights

40 Board of Directors

56 Independent auditor’s report2

At a glance

42 Corporate governance report

66 Consolidated income statement

4

Partner and integration ecosystem

48 Audit Committee report

6

Chair’s statement50 	Remuneration Committee report67 	Consolidated statement ofcomprehensive income

8

Chief Executive Officer’s statement

53 Directors’ report

12Market opportunity

55 Directors’ responsibilities statement

14

Our products

16

Our business model18

Our strategy

20 Acquisition – OSPInsight68 	Consolidated statement ofchanges in equity
69 	Consolidated statement offinancial position
70 Consolidated statement ofcash flows

22 Case study – TEPCO

71 	Notes to the consolidated
financial statements

24 Case study – ExteNet Systems

95 Company balance sheet

26 Key performance indicators (KPIs)

96 	Company statement of changes
in equity

28 Chief Financial Officer’s statement
32 Principal risks and uncertainties
36 	Environment, employee
engagement and CSR

97 	Notes to the Company financial
statements
100 Advisers

38 Section 172 statement
1. Exit ARR is defined as the current go forward run rate of annually renewable subscription and M&S agreements.

IQGeo Group plc Annual Report 20201

At a glance
While it has been a very challenging year for telecoms and utility network
operators, the Covid-19 pandemic has also brought into sharp focus thecritical role that these organisations play in communities around the world.
The IQGeo software technology is ideally positioned to help network operators respond to these rapidly
evolving market conditions. Our geospatial software platform and industry applications give network
operators an immediate and accurate view of their network assets and assist them to optimise operations
processes across the entire network lifecycle. Our end-to-end technology strategy provides network
operators with a next generation digital foundation essential for proactively and safely managing their field
and office operations, to reduce cost and improve customer satisfaction.

Delivering value across the network lifecycle

IQGeo has theagility that wewere looking foras well as theleadership in
this space andI think those two
factors sealed
the deal for us.
We knew that
we would be ingood hands.

Sales &
marketing

Planning &designConstruction

Increase revenues
with powerful
network insights

Transform time-to-market
with high data quality

Compress construction
timetables withdigitalised process

IQGeo utility industry customer

Operations &maintenance

Customer
service2

Empower field teams toincrease safety, productivity
and collaboration

Improve customer satisfaction
and reduce churn withaccurate network visibility

IQGeo Group plc Annual Report 2020

Strategic report

A spike in demand for broadband communication services from home
workers and increasingly distributed energy and utility services is
accelerating the need for digital transformation across these industries.
North America

EuropeJapan

IQGeo product order growthin 2020

Active end user
software licences

New customer
logos worldwide

Telecoms and utility customers(including OSPI acquisition)

42%
13

50,000+260+

IQGeo market position
Telecoms and utility network operators have an incredibly
difficult job in the best of times and the extra complexities thrust
upon them during the Covid-19 pandemic have only madethings more difficult. Many operators were already struggling
with the management and expansion of their network assets
using paper-based and siloed software applications that don’t
integrate with other systems and can’t be easily shared with key
stakeholders. Covid-19 has acted to accelerate the realisationthat true digital transformation is essential to the long-term
success of their business as they deal with the impact of thepandemic while deploying game-changing new technology
like fibre connectivity, 5G, smart meters and IoT sensors.
IQGeo is helping our telecoms and utility customers reimagine
the role that geospatial technology plays in their digitaltransformation ambitions and realise the benefits it brings totheir business.

IQGeo Group plc Annual Report 2020

The IQGeo Platform and our targeted software applications
combine to deliver innovative and compelling solutions whencompared to traditional GIS competitors that use legacy
centralised systems that demand specialised engineering talent.
At IQGeo we empower organisational transformation with ourintuitive, mobile-first geospatial software that easily integrates
with applications and data streams to create a single sourceof network truth. Everyone from engineers and contractors in
the field to designers and salespeople in the office have accessto the same powerful geospatial network view, delivering
operational insights that accelerate collaboration andproductivity across the enterprise and network lifecycle.

Read more about our products and lifecycle on
pages 14 and 15

3

Partner and integration ecosystem
In 2020 IQGeo made significant progress in defining
and promoting our partnership ecosystem.

Reseller and OEM partners
These partner companies work actively
to market, sell and support the IQGeo
software in specific geographic regions
and vertical industries. Some partners
retain the IQGeo product branding intheir sales activities and others OEM
our software using their own productline branding.

Implementation and development partners
These partner companies aretrained to provide IQGeo productimplementation and custom
development services to our joint
customers. Depending on project
specific requirements, these services
may be provided directly to thecustomer or in combination with
IQGeo’s own service activities.

Gartrell Group

Frontier GeoTek

Cloud hosting partners
IQGeo has worked actively withthese partner companies and canprovide optimised hosting services
to our customers deploying IQGeo
cloud‑native software.
Gartrell Group

Google Cloud

Microsoft Azure

4

IQGeo Group plc Annual Report 2020

Strategic report

We have signed new sales and support partners in all operating regions
and have formed partnership strategies with best-in-class technology
providers to support cloud deployments for our customers.

Technology partners
IQGeo works together with thesepartners to integrate our software with
their technology or have integrated
their software into our own productand application environment.
These partners also include
technology certifications achieved by
IQGeo. We work together with sometechnology partners to jointly selland support combined solutions.

GoogleOpenStreetMap

Open source software integrations
The open source model underpins
the IQGeo software development
philosophy and is a major differentiatorwhen compared to many of ourcompetitors that have a very
traditional, proprietary software
approach. Our current product offering
includes more than 80 open sourcecomponents.

Apache Cordova

GeoServer

Linux

OpenLayers

Technology integrations
IQGeo has successfully integrated areas of our software
portfolio with software and hardware technology fromthese companies to deliver complete solutions for ourcustomers. We have completed integrations for ourcustomers with technology from more than 25 companies.
You can view a complete list of all our partners in eachof these ecosystem categories by visiting our website atwww.iqgeo.com/partners-and-integrations

The advantages of putting
powerful, but easy-to-use
Inventory Maps into thehands of the right staff are
tremendous.
IQGeo telecoms industry customer

IQGeo Group plc Annual Report 2020

5

Chair’s statement

IQGeo own productrevenue has increased by

32%

Gross margin for theyear has increased by

10%

Overview

IQGeo delivereda strong set ofresults for theyear ended
December 2020
with growthin order book,revenue andmargins.
Paul Taylor
Chair

We continued to make solid progress across all our key metrics
and remain well positioned to benefit from the ongoing
opportunities in the telecommunication and utility markets.
In addition, the final two weeks of the year saw us complete
the acquisition of OSPInsight International Inc (OSPI).
The acquisition brings leading technologies and industry
expertise which will both add to and complement IQGeo’s
existing opportunities.
During the year we continued to benefit from our fundamentals
of offering world-class products and services to industries
where continued growth and flexibility for remote working
and infield live data have become key attributes to any system.
Performance across our main geographies in North America,
Asia and Europe continued positively where key deals were
executed in this period culminating in own product revenue
growth of over 30%. Following the introduction of our
subscription licence model in 2019, we continue to see strong
uptake to this model with growth in recurring revenue up by
over 90%. Our order book also substantially increased withbacklog at year-end increasing by over 50%. We continue
to have a strong balance sheet with cash of £11.1 million.

Results overview
Bookings of orders related to IQGeo own products increasedby 42% to £10.7 million during 2020 (2019: £7.5 million) following
expansion of our presence in North America as well as adding
new contracts in Europe and Japan. IQGeo own productrevenue has increased by 32% to £7.3 million (2019: £5.5 million)
with growth driven predominantly by recurring revenue
streams. Gross margin for the year has increased by 10% due
to higher margin IQGeo product revenues and improved
services margins.
Our balance sheet remains strong with a year-end cash
position of £11.1 million with an additional £2.5 million received
in January 2021 following the sale of our minority interest in the
Ubisense business.

6

IQGeo Group plc Annual Report 2020

Strategic report

The Board would liketo thank all our staff
who have worked
extremely hard thisyear in unprecedented
circumstances.

Organisation
The extraordinary challenges brought
about by the Covid-19 pandemic
required substantial change in theway we operated and engaged withour customers. Our organisation has
adapted extremely well to the need forlarge parts of the year to work remotely
whilst continuing to expand our software
suite and providing customer support
timely and efficiently.
On 21 December 2020 we completed theacquisition of OSPInsight International
Inc (OSPI). OSPI is a US-based
geospatial software company thatdevelops and licenses software for
operators to build and operate fibre
optic networks. Integration of bothorganisations is substantially complete,and it is clear already the value of the
combination of people and products will
have to our business going forward.

Board developments
As noted last year Tim Gingell stepped
down as CFO following the AGM and
we wish him the very best in the future.
Haywood Chapman joined the Board
as CFO in September and brings withhim a wealth of experience with highgrowth businesses.

IQGeo Group plc Annual Report 2020

We continue our commitment to ahigh standard of corporate governanceby maintaining the QCA Corporate
Governance Code in our reporting
structure. As such, we recognise that
Robert Sansom, Max Royde and myself
are no longer regarded as independent
Non-Executive Directors. Andy MacLeod,appointed in June 2019, and Ian Kershaw
remain independent. Further, my roleas Chair of the Audit Committee wasonly expected to be temporary and theBoard has now started the search for an
additional Independent Non-Executive
Director to fulfil this role.

Outlook
We remain a highly focused software
business delivering products andservices to key industries where ourcustomers provide essential services.
These industries have proven resilientto the challenges brought about by the
pandemic and many have looked to our
products to not only support growthand improve efficiency but also to help
manage the practicalities of the current
environment.
Our acquisition of OSPI brings a set ofkey metrics including a loyal customer
base and strong recurring revenue
stream, complementary products
and skills base.

We have a strong balance sheet anda growing recurring revenue stream
supported by a developing order book.
The challenges driven by the current
pandemic will hopefully recede markedly
as the year progresses, but it is too
early to be complacent of any impacts
these may continue to have on us or ourcustomers. We therefore remain sensibly
cautious, however with strong andbroader customer relationships, wider
product offerings and a strong balance
sheet we are well placed to meet our
growth expectations.
The Board would like to thank all our staff
who have worked extremely hard thisyear in unprecedented circumstancesand have all contributed markedly to ourin-year growth and the execution of the
OSPI acquisition. These efforts havealso created a stronger business for the
future. Finally, we would like to thankour customers, shareholders and otherstakeholders for their continued support.

Paul Taylor
Chair
22 March 2021

7

Chief Executive Officer’s statement

Orders related to
IQGeo products grew by

42%

Recurring revenue
order growth of152%

Unprecedented challenges in our target markets

2020 successfully
reinforced
IQGeo’s market
position as aleading geospatial
software provider.
Richard Petti
Chief Executive Officer

2020 has been a year like no other. The pandemic has createdsignificant challenges for our customers who design, buildand operate telecoms and utility networks, prompting them tofind new and more adaptable ways of working to meet theircustomers’ needs. Despite the challenges our customers faced,
I am extremely pleased at how the teams across our business
responded. We have delivered another improved set of resultsin 2020 and this is testament to the hard work and talent of ourorganisation which gives me confidence that we can continue
to grow in line with our expectations, despite the current
broader market pressures.
In telecommunications markets we have seen demand forbandwidth surge and this has forced operators to invest
in resiliency, increased bandwidth and increased fibre
connections to residential addresses. These pressures haverequired telecommunications operators to increase theirspending in fibre to the home and 5G rollouts, while at thesame time their consumer revenues have been impacted by
the closure of retail operations and for some, reduced revenue
from some forms of streamed content such as live sports.
Operationally, Covid-19 has created shortages of personnel
due to illness and distancing which has also impacted
their ability to meet their operational goals. Despite thesechallenges, telecom operators have continued to build out
new infrastructure at a rapid pace, and many have continued
to report very good financial results. What I believe weare observing are the benefits digitalisation has to play incorporate strategy, thanks to its ability to reduce the amountof personnel needed to conduct standard tasks, and its ability
to accelerate the speed of operational decisions and actions.
We see these investments in digitalisation set to continue thanks
to their ability to increase efficiency and reduce payroll costs.
In utilities markets Covid-19 has created a significant shift indemand: while energy consumption in manufacturing has
seen steep declines, residential consumption has increased
but not enough to offset the declines in electricity wholesale
prices and reductions in the price of liquid natural gas. As in
telecommunications, operators have also seen impacts in theavailability of operational staff, increasing safety risks related
to keeping staff on site and in the field to address safety issues.

8

IQGeo Group plc Annual Report 2020

Strategic report

Our strategy
Read more about how we are delivering on our strategy on pages 18 and 19

Goal 1
Regional
growthGoal 2
Building recurring
revenue base

Goal 3
Product
innovation

Here too we see companies investing intheir digital strategies and re‑visiting
their use of automation at the workplace
as well as work from home technologies
thanks to their ability to increase
productivity. Longer term, the global
nature of the pandemic has raised
awareness about the cost of energy
consumption to the planet, and carbon
reduction goals are making their way
into a number of government-set
targets which will result in investments inalternate energy sources and knock‑on
effects in areas such as distribution,
storage and electrification of roads
and cities. These long-term investments
will also increase the need for efficientand mobile digital tools that increase
productivity in core areas of planning,
construction, maintenance andemergency incident management.

After an initial period of regrouping at
the beginning of 2020, we found that
operators decided to continue andeven accelerate investment in network
expansion and maintenance activities,
and while we did encounter project
delays, business opportunities remained
relatively strong. Our sales and marketing
team focused outreach activities on key
decision makers and worked to establish
one-on-one relationships so we could
understand their new priorities andidentify project opportunities.

Therefore, in order to support thedevelopment of our own pipeline
we quickly pivoted our marketing
lead generation operations to focus
exclusively on digital content andonline activities. This strategy not only
developed our pipeline but enabled us toincrease our website traffic by more than
20% and we grew our lead generation
activities by 33% when compared to 2019.

Our markets
While we are conscious of the terrible
impact the pandemic is having, ourtarget industries of telecoms and utility
network operators have become an evenmore critical asset to governments andcommunities responding to the Covid-19
crisis. With the rise in home working anddistributed operations, a spotlight was
cast on the critical nature of telecoms
broadband and utilities infrastructure.
This qualified their teams as key workers
and allowed them to continue operations
with Covid-secure working practices.

Our response
IQGeo has managed the challenges witha pragmatic and positive approach to
the rapidly changing business realities.
At the time of the first lockdown in the
beginning of the year we moved quickly
to assess the risks to the business andput plans in place to monitor costs.
Our primary objective was preserving
organisational resilience while remaining
resolutely focused on the needs of ourcustomers. We put the retention of ourstaff, who are our biggest asset, at thecentre of our organisational strategy
and it was not until late in the year that
we began hiring new colleagues androlled back all cost containment policies,
including returning salary reductions
put in place earlier in the year for higher
paid employees. This strategy has
allowed us to continue delivering on all
our corporate and business objectives
while maintaining high levels of staff
morale throughout the pandemic.
As a growth-oriented organisation,
we understood quickly that customers
were pushing for significantly increased
percentage of their decision making to
be on-line rather than engaging withvendors directly.

IQGeo Group plc Annual Report 2020

Our sales and pre-sales teams also
adopted new remote selling capabilities
and by the second half of the year we
had closed opportunities that had been
instigated remotely from start to finish;
this is an unprecedented result for acompany in an industry that has reliedheavily on person-to-person contact
for large scale technology investments.
In an industry where trust, competence
and hard proof of value is required to
win contracts this has been a great
achievement for us and highlights thequality of our staff, our product andour excellent customer references.
In retrospect, 100% digital selling has
forced us to re-evaluate the customer
journey and what we must do to win
their trust in a way that will have lasting
impact on our business.
Our development team continued torelease several exciting new products
in addition to significant updates on our
existing geospatial software productline. In particular, the increased demand
for mobile and work-from-homecapabilities has been met with someexciting developments in our cloudcapabilities, and we now market the
IQGeo product with what we consider
to be best‑in‑class scaling and cost
optimisation cloud capabilities.

9Chief Executive Officer’s statement continued

Recurring revenue
orders grew by
152% year on year
in 2020.

Our 2020 outcomes

IQGeo’s acquisition of OSPInsight

We used 2020 to successfully reinforce
IQGeo’s market position as a market
leading geospatial software provider.
Whilst market awareness and reputation
can be difficult to measure, I can see inmy own interactions with key customers,
partners and prospects that we aremaking good progress in promoting
our unique ‘office to field’ vision for ourtarget markets and there is continued
evidence companies are responding tothis very positively.

Another major highlight for 2020 was
the announcement on 21 Decemberthat we had completed the acquisitionof OSPInsight (OSPI) for a total
consideration of up to $8.75 million.
They are a US-based software company
located in Salt Lake City, Utah with awell‑established fibre planning anddesign solution. While this acquisition
happened late in the year and madea marginal financial contribution
to IQGeo’s 2020 revenues, the OSPI
software and team will make animportant strategic and complementary
contribution towards our journey toprofitability.

More importantly by the end of 2020,
sales and service delivered on our
expectations for pre-acquisition targets
by signing 13 new customers andexpanding recurring revenue within
our existing accounts. We achieved 42%
year on year order growth for orderintake related to IQGeo products andwe successfully grew total revenue by
17%, which is indicative of the momentum
we are building in our markets. More
importantly as we look to continue
the journey to being a high recurring
revenue software business, our recurring
revenue orders grew by 152% year on
year and our recurring revenue grewby 96%. Higher recurring revenue,
combined with a good performanceby our services team, meant our grossmargins exceeded 50%, delivering
a reduced adjusted EBITDA loss of£2.5 million (2019: £4.8 million) andreduced operating loss of £4.3 million(2019: £6.3 million).

10

OSPI is a profitable 20-year-old
business with a formidable reputation
amongst fibre operators as a providerof high quality and easy to implement
fibre network management geospatial
systems. The OSPI acquisition brings acustomer base of more than 200 fibre
network operators to IQGeo along with
£2.0 million recurring revenue.
OSPI opens up a whole new market ofsmaller Tier 3, Tier 4 and private network
operators such as universities with lessmature infrastructure. OSPI’s sales
and delivery methodology can close
opportunities in around 6 weeks from
qualification and customers can be live
in a matter of days, which means OSPI iswell poised to capitalise in the surge ofsmaller fibre operators in North American,
European and Asian markets.

Thanks to their strength in the lower
tiers, there is very little overlap intarget markets, and we have beenable to quickly coordinate our sales
and marketing efforts to ensure newopportunities are directed to theappropriate team.
The OSPI product, because of its ease ofuse and simple installation is also ideallysuited to sales through reseller channels
where they have successfully sold into
markets as diverse as sub-SaharanAfrica, Middle East and Australasia.
In 2021 it is our goal to extend the reachof the OSPI software through a reseller
programme in our existing geographic
markets and new areas of the world suchas South East Asia where IQGeo to datehas had a limited footprint.
The OSPI business is a good cultural fit
with IQGeo and will accelerate our routeto creating a cloud-first software businessand by adding significant technology
expertise in the area of fibre network
design for our telecoms customers.
The OSPI acquisition has been wellreceived by their customer base, who
are pleased with the prospect of rapid
innovation in the product roadmap and alarger organisation to provide them withservices and support. IQGeo customers
in turn have been pleased with theacquisition of a highly respected brandin the business and the prospect of moreexpertise joining the IQGeo organisation.
The ‘Acquisition’ section of this reportprovides more details on the benefits andpositioning of the OSPInsight acquisition.

IQGeo Group plc Annual Report 2020

Strategic report

Find out more about ourmarket forecasts by accessing
the finnCap research portal
https://www.finncap.com/
researchportal#/portal/finncap
Looking to the cloud

Our strategic goals

3. Product innovation

Over the course of 2020 we saw asignificant increase in interest from ourcustomers in deploying our geospatial
software into the cloud. This increase
parallels cloud deployment trends
found in other enterprise software
industries with companies looking totake advantage of the flexibility, costsavings, performance, and security ofresilient cloud offerings from Amazon,
Google, Microsoft and others. We believethat cloud deployments will continue
gathering speed in 2021 across all ourcustomer tiers and we are focusing
additional strategic resources in this area
to support our customers and further
enable new software and licensing
options for our business. The IQGeo
software platform for our enterprisecustomers has always had a cloud-first
approach. This cloud‑native softwarearchitecture provides us with a distinct
advantage over our workstation‑centriccompetitors that struggle to make useof the benefits afforded by a full cloud
deployment. These strengths have beenfurther accelerated with the additionof microservices and containerisation
to further improve our scalability andcost‑optimisation capabilities making
IQGeo an attractive SaaS proposition
for our larger customers.

IQGeo is a specialist software provider
and will continue to focus on deliveringhigh growth from new business sales andexpansions with existing accounts whilst
underpinning sales with a high level ofrecurring revenue.

Our product range uniquely straddles
the space between geospatial datarepositories and field systems andmaintaining this advantage will requirecontinued investment in our products tomaintain our competitive advantages.
2021 will see us expanding the OSPI
product range to match the IQGeo‘office-to-field’ positioning and in
addition we shall be enhancing the
network design capabilities for our
Utilities market where we see continued
opportunities of growth.

The OSPI customer base also presents
a good opportunity for us to develop
a new cloud-based offering that overtime will allow us to migrate the entire
customer base into a single SaaS
offering. Our goal will be to preserve theunique features and the look and feel of
the OSPI product but offer this in a cloudenvironment that takes advantage of
IQGeo’s existing architecture strengths
in this environment.

In the year ahead IQGeo will befocusing on:

1. Targeted segment-specificgrowthWith a broadened product portfolio
our areas of growth will remain very
focused. With the IQGeo product line
we will target the ‘Enterprise’ market
which we define as Tier 1 and 2 telco
and utilities customers across our three
regions (NA, Europe, Japan), which havethe potential of several thousand users.
With our OSPI product line we will target
the fast-moving market in lower tierfibre operators (‘alt net’ operators in theUK) and private network operators likeuniversities and corporations. For thisSMB (small and medium business)market we will also develop our channel
network for this product line, particularly
in Europe and non-Japan Asia.

2. Transition to SaaS business
Our Enterprise market is increasingly
demanding cloud technology and in
2021 we expect to sell an increased
percentage of software subscriptions
that include hosting services fromone of our partners. On the SMB side
we will launch the much-anticipated
OSPI product extensions in the cloudwith a view to migrating the entire
customer base to the cloud over the
next three years.

Forecast and outlook
With the added scale and opportunities
that the OSPI acquisition brings,
combined with market dynamics andour strong product offering, a growthin orders and an increasing visibility
over forward recurring revenues, I am
optimistic we can continue our growthtrends in line with our expectations forthe coming year.
On behalf of the IQGeo Board andemployees, I would like to thank ourcustomers, investors and partners fortheir help and support with the uniquechallenges we all faced during 2020.
We have a strong balance sheet as
we enter 2021 and I believe we have
now established real momentum inthe business and are well positioned inour goal of creating an attractive highgrowth software business with a highdegree of recurring revenue.

Richard Petti
Chief Executive Officer
22 March 2021

IQGeo Group plc Annual Report 202011

Market opportunity
IQGeo is actively targeting more than 16,000 contacts
at 1,000 telecoms and utility network operators.

In 2020 IQGeo successfully establisheda total of 260+ telecoms and utility
customers across our three sales regions,deploying more than 50,000 software
user licences. To continue building on
our strategic goal of regional growth,
we have significantly expanded thenumber of companies and contacts
that are included in our digital marketing
campaigns. This year we increased thenumber of individuals being approachedwith our direct marketing activity bymore than 60%.
Before the Covid-19 pandemic emergedin the beginning of the year, IQGeo
already had a strong digital marketing
foundation which we were able to quickly
ramp up following the cancellationof industry events and tradeshows.
By the second quarter our marketing
campaigns and events were pivoted to
fully digital activities. To illustrate thisshift, by October 2020 we increased thenumber of monthly visitors to our website
by 82% when compared to October 2019
and we held our traditional face-to-facecustomer events in the US and Japan as
online conferences, securing more than620 customer and partner registrations(US 232, Japan 390).

Future market opportunity
Our rapid pivot to digital activities has
allowed us to continue building market
recognition and sales momentum for
the IQGeo software without interruption
to our lead generation process.
By all marketing automation metrics,
we accelerated prospect engagement
and marketing’s contribution to thesales pipeline and sales revenue.
Our significantly larger company
and contact database will allow themarketing and sales team to continue
nurturing contacts and develop a strong
opportunity pipeline for 2021.

Market segmentation
In this market opportunity analysis,
we have segmented the targetedcompanies into Enterprise, and small
to medium business (SMB) network
operators. While the detailed definitionof these tiers varies between industries
and across regions, IQGeo has
established a general definition for how
these tiers are segmented and tagged
within our digital marketing activities.

12Enterprise

Global total targets

International or dominant national
network operators.

60%

SMB

16,229

Regional or private network operatorsthat serve one or more geographic
areas.
Within our company and contact
database every network operator
is identified by their appropriatetier. This allows the IQGeo sales andmarketing team to deliver customised
messaging and product positioning thatreflects the most critical business issues
for a given industry and tier.

10,135

Contacts
Global utility targets

Targeted digital marketing
campaigns
Our focus on digital activities has
allowed the marketing and sales teamto refine and effectively target our digitaloutreach. We not only split campaigns
and content to target telecoms and utility
operators, we also create messages
and content that speaks to the needs
and market conditions of specificcountries and different sized businesses.
We even develop digital campaigns thattarget the needs and requirements ofa single company. These increasingly
granular digital campaigns are much
more effective than a one‑size‑fits‑all
approach and have improved
engagement metrics and the overall
quality and quantity of leads being
passed to sales.

2020

2019

47%
8,088
5,510

2020

2019

Contacts
Global telecoms targets

76%
8,141

Example digital marketing campaigns• Automated email campaigns

4,625• Thought leadership eBooks• Customer video interviews• Article contributions
Example digital events

2020

2019

• Industry reports and researchContacts• Webinars series• IQGeo Virtual Meetup• Virtual tradeshow participation• Guest speaking slots at 3rd party events• Online customer focus group sessions

Key
Enterprise

SMB

IQGeo Group plc Annual Report 2020

Strategic report

North America

EuropeJapan

In 2020 North America remained
IQGeo’s largest and most maturesales region with a very healthy
ecosystem in both the telecoms
and utility industries. In 2021 wewill be targeting 580 network
operators in this region andwe continue to see significant
growth potential as we expand
the capabilities of our software
product line. Momentum isbuilding in this region as we
communicate our message andsecure new customers.

The European team continues
to make progress in establishingnew customers in 2020 in this lessmature market for IQGeo. In 2021
we will be targeting 438 telecoms
and utility network operators witha focus on Central and Northern
Europe. This region presentscountry specific opportunities
that we are developing such asalternative telecoms network
operators and smaller regional
utilities that are also rolling out
fibre networks to their customers.

Our small Japanese teamcontinued to punch above theirweight in 2020, closing several
significant deals with existing andnew customers. Off the back ofthis success and working together
with a well-established partner
network, the team will expand
their target market by reachingout to 35 telecoms and utility
operators across Japan. Whilesmall in comparison to North
America or Europe, the Japanesemarket offers strong revenue
growth potential for IQGeo.

Utility targets

Utility targets

Utility targets

322
225

64

97

213
companies

companies

20

9companies

149

6,500 contacts
Telecoms targets

155

11

258

1,420 contacts

168 contacts

Telecoms targets

103

135

225

Telecoms targets

90

6

15

companies

companies

companies

6,221 contacts

1,750 contacts

170 contacts

IQGeo Group plc Annual Report 2020

913

Our products
The IQGeo Platform and industry applications provide a powerful
office‑to‑field solution that enables telecoms and utility network operators
to reimagine the benefits that geospatial technology brings to their entire
business. It provides a single consistent view of the network assets, improving
data quality and streamlining processes.
What makes IQGeo different

Empowering the enterprise

Challenging legacy GIS

At IQGeo, our mission is to deliver
geospatial transformation that provides
unparalleled success across ourcustomers’ businesses.

IQGeo empowers field and office staff
to easily monitor, capture, visualise
and manage network assets without
specialised training. We deliver an
end‑to-end geospatial solution that
increases productivity and collaboration
across the entire organisation.

Technology and processes developed
20-30 years ago are simply nolonger workable. Centralised legacy
approaches do not provide the data
quality, currency and collaborationneeded for next generation networks.

Delivering ROI
Telecoms and utility network operators
are using IQGeo’s geospatial software
to transform their business anddeliver measurable ROI that increases
revenue, decreases operating costs,
improves customer satisfaction andenhances safety.

Our easy-to-use, flexible software isreadily adopted by office teams, fieldcrews and contractors, rapidly spreading
across the enterprise, delivering true
business transformation.

Built for 95% of the workforce and fortoday’s digital realities, IQGeo’s softwareis designed for distributed mobile
devices, cloud-native, flexible, andcost‑effective.

The IQGeo advantages

It’s modern looking
and easy-to-use witha simple user interface,unlike any othergeospatial system.
We’re committed
to technology
advancements that
improve service forour members, safety,
system reliability andemployee relations.
IQGeo helps us to ticka lot of these customer
satisfaction boxes.
IQGeo utility industry customer

14

Built for network
operators

Mobile-first

IQGeo’s end-to-end enterprisesolutions are designed specifically foruse by telecoms and utility network
operators. Our optimised softwareand industry experts help customers
to streamline processes acrosstheir business, delivering greater
productivity from the office to the field.

IQGeo’s mobile-first software
democratises the use of technology.
We enable approved users to view,
manage and edit a current network
view from any mobile device,
anywhere, online or offline. The
easy‑to-use interface is rapidly
adopted by field and office staff,
improving departmental collaboration.

Across the
network lifecycle

Cloud-native

The IQGeo Platform andapplications empower stakeholders
across enterprise planning, design,
construction, maintenance, sales
and customer care processes. Using
the latest browser, open source andflexible data model technologies
also allows IQGeo customers to fully
leverage a wide range of GIS, IoT
and application data sources thatare essential to network lifecycle
management.

The IQGeo Platform was designed
and built for cloud deployments
and as cloud implementation
strategies become more common
with our customers, we help them torealise the compelling operational
benefits. A cloud deployment enables
enterprise scalability as their networks
grow, ensures optimal performance,
guarantees uptime service levels,and reduces the cost of comparable
on‑premise installations.

IQGeo Group plc Annual Report 2020

Strategic report2020 was a milestone year for our engineering and product management
teams as they oversaw the release of new strategic products like Network
Manager and Workflow Manager, as well as a major 6.0 release of the IQGeo
Platform that incorporated the industry’s latest architectural components,
keeping our solutions at the leading edge of technical developments.
Market traction for new and future products
In 2020 we released a major new
geospatial design and editing productcalled Network Manager. This firstrelease is built for the telecoms market
and we are planning the release of autility version in 2021. We also completed
the formal release of our Workflow
Manager product that helps control
telecom and utility construction andmaintenance activities from end-to-end,
keeping teams informed of project, trouble,
and maintenance ticket status.

Both of these new products are alreadyin production with multiple customers inNorth America and Europe and we areplanning deployments for 2021 in Japan.
Designed together with a small groupof pilot customers, these products havebeen well received by the market andare making significant contributions to
our sales pipeline for 2021. To highlightthe market interest in our latest software,
Network Manager for telecoms receiveda 2020 Diamond Technology award fromthe independent telecoms publication
Broadband Technology Report (referto the inside front cover for more details).

Building on the initial success of Network
Manager for telecoms, we will be
releasing a Network Manager for utility
product in 2021. This new product willleverage the strengths of the IQGeo
Platform and our experience with
Network Manager to create a networkmodel optimised for the needs of theutility industry. We are working actively
with existing customers to refine therequirements and functionality of thefirst release.

Lifecycle diagram
Sales &
marketing

Planning &designConstruction

Operation &maintenance    Network Revenue Optimizer

Customer
service    Inspection & Survey

    Fibre Planning

    IQGeo for Salesforce

    IQGeo for Salesforce

    Workflow Manager

    Network Manager

    IQGeo Platform
Application data sources

IQGeo Group plc Annual Report 2020

Geospatial data sources

15

Our business model
IQGeo’s transition to a recurring software subscription revenue model
made significant progress in 2020 with more than 90% of software orders
received using subscription pricing.

Competitive advantage

Our typical customer lifecycle

At IQGeo we deliver clear andmeasurable benefits to ourcustomers, that are helping themto meet their business KPIs andtransform network operations.

Year 1Engagement pattern
Once our software is installed with a
new customer, it rapidly finds a strategicrole and often expands across otherdepartments. The confidence in our
initial solutions creates the opportunity
to deploy new applications that also
become mission critical with user licences
expanding over time.

Delighting customers
To support the long-term successof our customers and ensure ongoing
subscription revenue, IQGeo is focusedon delighting our customers after the sale.
In 2020 we rolled out several initiatives
and activities designed to increase
engagement with our customer communityand capture their product requirements
and business challenges.
• Dedicated customer eNewsletter• Technology focused webinar series

Customer purchases first product with a small number ofuser licences.

Year 2Customer expands the number of users for Product 1 andadds Product 2 with initial users.

Year 3Customer expands the number of users for Products 1 and 2.

Year 4
Customer adds Products 3 and 4 while expanding users on
Products 1 and 2.

Year 5
Customer continues to expand users across the deployed
product suite.

Year 1
Software subscription revenue from initial customers.

Years 2-5
Additional customers are added each year while existingcustomers expand their installations. This creates a healthy
recurring subscription revenue stream with significant
top‑line revenue growth as new customers are added
each year.

• IQGeo Virtual Meetup events• Online “Product release center” resource• Increased software release frequency

A partnership withour customers

16

The success of the IQGeo business model depends on thelong-term success of our customers. Our entire organisation
is focused on creating and maintaining long‑term customer
partnerships that ensure this success.
From a prospect’s first engagement with IQGeo, we listen to
their requirements and seek to understand their culture inorder to deploy a solution that evolves and grows with theirchanging environment.

IQGeo Group plc Annual Report 2020

Strategic report

The combination of new accounts and the ongoing expansion of existingaccounts with recurring subscriptions reinforces our “land and expand”
business model and is building a reliable revenue stream with strong future
growth potential.
Value created

Single customer revenue
growth modelBusiness

50,000+

Product 1
Product 2
Product 3
Product 4
Revenue

P3

P1

P1

Year 3

P1

Year 4Multiple customer revenue
growth model

Year 5C6
C5
C4

Customer
Revenue

C3

C4
C3

Year 1

C1

Year 2

Year 3

C1

Year 4

In a world where our competitors propose complex,
inflexible and costly configurations, the entire IQGeo teamstrives to deliver flexible, transparent solutions that are
innovative and cost-effective.
Providing software that exceeds customer expectations
develops the trust and mutual commitment that ensuresthe long-term health of both our businesses.

IQGeo Group plc Annual Report 2020

Customers

13

IQGeo telecoms industry
customer

C2

C2
C1

C2

Revenue

C5
C4
C3

C2
C1

Telecoms and utility customers“The IQGeo team
immediately understood
our challenges anddelivered a presentation
and Proof of Concept that
addressed our biggest
concerns. We continue tobe impressed by both theteam and the software,
which has exceeded our
initial expectations.”

P1

Customer journey

C3
C2

260+

new logos in 2020

P1

Year 2

P2

P2

P2

P2

Revenue per user

P4

P3

Year 1

Active users

P4

C1

Year 5

Employees

8.6/10

Employees would recommend
IQGeo as an employer

8.6/10

Employees understand thestrategy and objectives of IQGeo

17

Our strategy
In 2021 IQGeo will continue to focus on our three key growth strategies that
we originally laid out two years ago. Our business-wide focus on these goals
has made a significant contribution to the success we have achieved sincerebranding as IQGeo in January of 2019.

IQGeo willcontinue to focus
on delivering highgrowth from new
business sales
and expansions
with existingaccounts whilst
underpinning
sales with a highlevel of recurring
revenue.
Richard Petti
Chief Executive Officer

Goal 1
Regional
growthProgress during the year
2020 saw strong growth of new logos in the Americas andJapan including the addition of several large Enterprisenetwork operators, as well as achieving significant growthwith smaller regional SMB operators. Europe also saw
the addition of several new SMB operators, as well as theformation of new reseller partners that will help to penetrate
the diverse European market.
13 new logos in 2020.

Our future goals

Further organic growth and regional partner sales
IQGeo has established a solid customer base in all our
key markets and we will continue to focus on growing ourmarket share and expanding the use of our products withexisting customers in 2021. We have seen initial successworking with carefully selected partners that have existing
expertise in the telecoms and utility industries. In 2021, we
will be working to further develop this reseller and partner
network which will include targeting Asian geographies
where IQGeo is not yet present.

Case study

TEPCO

Read more on pages 22 and 23

18

IQGeo Group plc Annual Report 2020

Strategic report

Delivering on our growth strategy, we acquired
OSPInsight in December 2020.
IQGeo acquired OSPInsight to increase
our telecoms customer base and expand
market share.

Linkedto ourstrategy

Read more on pages 20 and 21

Goal 2
Building
recurring
revenue base

Goal 3
Product
innovation

Progress during the year

Progress during the year

In 2020 we completed our operational transition to a
subscription-based software pricing model. While there
will continue to be some customers that insist on perpetual
licensing, subscription sales are firmly embedded in oursales culture and increasingly accepted by our customers
and prospects. The new customers established in 2020are helping to further strengthen a robust recurring
subscription revenue foundation that will support our
ambitious growth objectives.

2020 was a very successful year for IQGeo in the releaseof new products, as well as the addition of significant newenhancements to our current product line. Our software
engineering philosophy of working closely with customers
on development has meant that our latest capabilities
have been well received by the market and we have beenrecognised by independent industry authorities for our
product innovation. Refer to the ‘Our products’ page formore details on specific product releases and a summaryof our overall product line.

Our future goals

Our future goals

Our 2020 simplified price list has established a clear
subscription pricing culture within IQGeo. We will continue
evolving our pricing structures to further simplify ourapproach and create incremental revenue opportunities
within existing customers. Our objective of pricing simplicity
and transparency for our customers has been wellreceived by the market and contrasts our approach withlegacy competitors that have notoriously complex pricing
structures.

While we have a very full development roadmap for 2021,
three notable projects are the major release for our Network
Manager product to support the utility market, additional
engineering resources focused on the evolution of our cloud
hosting capabilities, and mobile enabling our new OSPI
product line (refer to the ‘Acquisition’ page for more details
on OSPI). These new products and capabilities represent
significant business opportunities to expand existing markets
and target network operators that we were not able toreach in 2020.

More than 90% of software sales
in 2020 were subscription based

Case study

Read our business model on page 16 and 17 tofind out more

Read more on pages 24 and 25

Focus on recurring revenue

IQGeo Group plc Annual Report 2020

Cloud innovation, new products and integration

ExteNet19

Acquisition

OSPInsight
Acquisition overview
On 21 December 2020, we completed
the first acquisition since the formationof IQGeo. We purchased OSPInsight(OSPI), a US‑based software company
with 25 years’ experience in fibreplanning and network management.
A total consideration of $8.75 million
secured the sale with an oversubscribed
fundraising of approximately £5.3 million
prior to issue costs. The acquisition
includes the OSPI fibre design andmanagement software supported by ateam of over 20 employees based in Salt
Lake City, Utah. There was a very modest
revenue contribution to IQGeo’s 2020accounts as the acquisition closed at thevery end of the year. Moving forward into
2021, this acquisition adds more than 200
existing customers and £2.0 million inrecurring revenue to the IQGeo business.

Targeting SMB telecoms operators
The OSPI software dovetails extremely
well into the IQGeo product portfolio withvery little software or customer overlap.
Targeted at SMB telecoms operators,
their typical customers are smaller
metropolitan, private and dedicatednetworks. The OSPI sales model delivers
higher volume, lower value orders witha short sales cycle and very low-touch
deployments. This target market andsales model is something that the current
IQGeo enterprise software and support
strategy struggles to support, making
the addition of OSPI a net increase to
our addressable market.

In 2021 the existing OSPI team will form
the core of a new business unit focusedon SMB fibre network opportunities.
Initially they will continue to use the
OSPI brand that has a well‑establishedreputation in the fibre industry.
The marketing and sales teams will work
closely to ensure that sales qualified
leads are directed to the appropriate
products and the business units,technology, and branding will be more
tightly integrated over time. One exampleof this integration strategy is the sharingof IQGeo’s mobile geospatial capabilities
with OSPI customers.

Key statistics
Customer and revenue growth

200+

Active customers£2.0m

in recurring revenue

As the current OSPI software does nothave a native mobile application, ourengineering teams will be working toprovide an “OSPI ready” version of ourmobile geospatial application in thefirst half of 2021. This effort will be ourfirst demonstration of the extra value
and capabilities that IQGeo will be able
to provide to the OSPI customer basewhile expanding the revenue potentialof our existing “best-in-class” mobile
technology.
The OSPI lighter-touch sales model isalso well suited for distribution throughreseller partners as it requires lesstechnical integration expertise and offers
shorter sales cycles to a substantial SMB
market. Over the course of 2021, we
will be developing partner distribution
channels for the OSPI software in
geographies that we already serve andin regions where we do not currently
have a market presence. We are
extremely positive about the technology
sharing and business opportunities that
the OSPI acquisition brings to IQGeo,
and 2021 will be an exciting year for the
new combined team.

Find out more atwww.ospinsight.com
20

IQGeo Group plc Annual Report 2020

Strategic report

The acquisition of OSPInsight significantly
expands our user base, providing us witha materially enlarged and loyal market
for new product subscriptions.
Richard Petti
Chief Executive Officer

Acquisition highlights• Complementary market-leading, fibre optic network management technology• Expands IQGeo’s addressable market• Expands IQGeo’s IP in network design, splice design and detailed record keeping• Materially enlarges global and loyal customer base• Acquired for a total consideration of up to $8.75 million• Adds recurring revenue of £2.0 million per year
• Expected to be accretive in first full year of ownership

Fibre operator maturity level

Level 1

Level 2

Municipal and industrial operators
University, corporate campuses
Government, Transit Systems
FTTH < 50k subscribers
Business Fibre < 10k route miles

Level 3

Level 4Large enterprises
Multi Service Operators (MSOs)
FTTH > 50k subscribers
Business Fibre > 10k route miles• Simple SaaS or on-prem deployment• Flexible deployment options• Low-touch support• Customisable configurations• Easy-to-use interface• Integrations with existing systems• Predefined best-practice workflows• User-defined workflows• Standalone System of Record• Scalable System of Record• Supports the operational lifecycle

IQGeo Group plc Annual Report 202021

Case study

Goal 1
Regional
growthTEPCOJapan is currently the third largest energy
consumer in the world, after the US andChina, and TEPCO is the largest electricutility in Japan and the 4th largest in theworld, providing energy to the Tokyo
metropolitan area.

Challenge
On 9th September 2019, Typhoon
Faxai hit Japan. In Tokyo it caused
electricity outages for 934,000
households, taking down 1,996 poles
and two transmission towers. TEPCOPower Grid is required to manage thiscomplex, rapidly changing disaster
response with daily press meetings tokeep everyone informed on progress
to restore network services. A lack of
accurate and current information about
the situation in the field made it almost
impossible to forecast recovery timing
and manage response activities.

Results
The supervisory ministry asked for a
detailed report within one month of
the Typhoon and the IQGeo Platform
enabled the team to do this quickly andefficiently. A Group Manager at TEPCO
said that without IQGeo, it would havetaken double the time to assess thetotal damage for current and future
extreme weather events. The IQGeo
Platform is currently being used in
the distribution division at TEPCO,
but there are plans in place to expand
the deployment to broader Power
Grid business processes including theconstruction division, communication
division and contractors.

Solution
A month before the Typhoon, TEPCOPower Grid began working with IQGeo
and NESIC (IQGeo’s Japanese partner)
to deploy the IQGeo geospatial software
to capture the location of electrical poleand critical network assets. The IQGeo
Platform formed the foundation for
TEPCO’s Field Situation Sharing System,
providing an accurate view of the current
network status. This resource played acritical role during the typhoon disaster
response. The TEPCO response teamused the IQGeo software to identify,
track and reinstate outage areas,
mitigating customer downtime.

To learn more about our customers, visit thecustomer stories page on the IQGeo website
iqgeo.com/iqgeo-customer-stories

22

IQGeo Group plc Annual Report 2020

Strategic report

Without IQGeo, it would
have taken double the timeto grasp the total damage
for extreme weather events.

of

TE

PC

O

Po

we

rG

rid

TEPCO Group Manager

Ph

IQGeo Group plc Annual Report 2020

ot

o
oc

ur

te

sy

23

Case study

ExteNet Systems
ExteNet Systems is a leading US
provider of converged communications
infrastructure and services addressing
outdoor, real estate, communities, andenterprise advanced connectivity needs.
Since its first distributed network (DNS) in
2005, it has deployed over 500 networks
across the country, including fibre, small
cells, DAS and evolved packet core (EPC)
networks, indoor and outdoor.

Challenge
As the number and complexity of
ExteNet’s fibre networks rapidly
increases, their team’s vision was tocreate a single cohesive, consolidated
platform that would help them manage
their fibre networks. To maximise theefficiency of all their processes andnetwork resources, they required a“single source of network truth” that
could be used by all stakeholders.

Goal 3
Product
innovation

Results
The IQGeo software quickly becamea cornerstone to the management of
ExteNet’s fibre networks, providing acurrent network view and the ability toquickly capture as-built field information
to ensure data remains accurate
and trusted. The deployment also
provides the scalability they need for
future growth and gives their business
operations the oversight and metrics
essential to manage both their technicaland administrative requirements. In thehighly competitive telecoms industry,
IQGeo is supporting ExteNet to deliverindustry-leading customer service,grow their fibre networks, and optimise
network processes to meet strategic
business objectives.

Solution
ExteNet deployed the IQGeo Platform
with Network Manager and Network
Revenue Optimizer. The easy-to-use
interface was quickly adopted by staff
with little training, while supporting sales,
construction, engineering, maintenance,and customer service processes. IQGeo
provided a solution that consolidated
a wide range of siloed information
into a single, powerful geospatial viewthat meets the asset management
requirements for both short-term
projects and longer-term network
operations. The shared geospatial
network view empowers teams witha common assessment and decisionframework that improves departmental
collaboration.

To learn more about our customers, visit thecustomer stories page on the IQGeo website
iqgeo.com/iqgeo-customer-stories

24

IQGeo Group plc Annual Report 2020

Strategic report

The IQGeo geospatial software is
helping ExteNet improve our fibre
network management processes,
differentiate ourselves in the market
and accelerate our quote-to-cashbusiness targets.
Joe Cunningham
Vice President of Network Planning

IQGeo Group plc Annual Report 202025

Key performance indicators (KPIs)
Continued progress against strategic objectives.

1   Exit ARR
(£m)

£5.3m

+165%

2020

5.3

2   In‑year recurring revenues(£m)

3   Recurring revenue order intake
(£m)

£3.2m

£6.3m

2020

2019

2.0

2019

2018

1.1

2018

Exit ARR has increased by 165% due toaddition of new logos, net retentionof customer base of 140% and theacquisition of OSPI.

+96%
3.2

2020

6.3

2019

1.6

2018

0.9

IQGeo recurring revenues recognised in
the consolidated income statement haveincreased by 96%, with all new logos
being added on a subscription basis.

2.5
0.8

Recurring revenue order intake
has increased by 152% due to newlogos committing to multi‑year
subscriptions along with existingcustomers renewing annual M&S
and subscription agreements.

Link to strategy

Link to strategy

Link to strategy

4   IQGeo own product orders(£m)

5   IQGeo own product revenue(£m)

6   Gross margin(%)£10.7m

£7.3m

52%

+42%
10.7

2020
2019
2018

7.5
3.4

IQGeo own product orders haveincreased by 42% with a strong intake
of services orders being won alongsidesubscription sales.

Link to strategy

26

+32%

2020

7.3
5.5

2019
2018

4.7

IQGeo own product revenue has
increased by 32% with growth driven
by recurring revenue streams and a
growing services order book.

Link to strategy

+152%

+10%

2020

52

2019

42
44

2018

The gross margin increase of 10% is a
result of the revenue mix moving towards
higher margin IQGeo product revenues
and improved services margins.

Link to strategy

IQGeo Group plc Annual Report 2020

Strategic report

7   New logos won(Number)

8   Net cash
(£m)

13

Nil%

2020

13

2020

2019

13

2019

2018

11

New logos were won in all operating
regions during 2020, with the regionalcustomer base becoming more diverse
as markets are developed.

Link to strategy£10.5m9   Employee headcount at 31 Dec(Heads)

-20%

10.5
13.1

2018

+35%

2020

96
71

2019
30.9

Net cash decreased to £10.5 million
following the completion of a fundraise
and the acquisition of OSPI.

Link to strategy

96
2018

59

Headcount has increased due to theacquisition of OSPI.

Link to strategy

Key
Regional
growth	Building
recurring
revenue base

IQGeo Group plc Annual Report 2020

Product
innovation27

Chief Financial Officer’s statement

Exit ARR
increased by

Net retention of
ARR for 2020 was

165%

140%

Principal events and overview

Including the
OSPI acquisition,
exit recurring
revenue run rateis £5.3 million.
Haywood Chapman
Chief Financial Officer

28

The year ended 31 December 2020 has been one of growing
the business organically and increasing recurring revenues.
The commercial model for the Group continues to focus
on increasing Annual Recurring Revenue (“ARR”) throughsubscription-based software sales and maintaining long‑term
relationships with customers, creating recurring revenue
growth and achieving sustained profitability and cash flows.
ARR also includes maintenance and support arrangementsfrom perpetual licence sales. Additionally, revenue is derived
from consultancy services on own IP products and also
consultancy services connected to third party products.
Revenues from third party product services have declined in
the current period and while these services have declined lessthan previous expectations, they are still expected to decline
in future periods as the Group continues to focus on growing
recurring revenues.
On 21 December 2020 the Group acquired OSPInsightInternational Inc. (“OSPI”) for a total consideration of up
to $8.75 million. The consideration paid consisted of both
cash from a successful placing which brought new investors
onto the share register, and the issue of IQGeo shares to thevendor. Due to the timing of the acquisition the impact on
the consolidated income statement of the Group is minimal.
The acquisition brings more than 200 customers to theGroup and opens up a whole new market of Tier 3 and Tier 4
operators, so should bring great benefits as we move forward.

IQGeo Group plc Annual Report 2020

Strategic report

Exit ARR
(£m)

£5.3m

+165%
5.3

2020
2019
2018

2.0
1.1

Key Performance indicators
On a monthly basis, the Directors review revenue, operating costs, cash and KPIs to ensure the continued growth and developmentof the Group. Primary KPIs for 2019 and 2020 were:								2020KPIs								
£’000

2019
£’000

Total revenue								
9,155

7,806

Recurring revenue								
3,195

1,632

Recurring revenue %								
35%

21%

IQGeo own product orders								10,7007,500

Gross margin %								
52%

42%

Operating costs 								
9,074

9,539

Adjusted EBITDA loss 								(2,495)(4,848)Loss for the year								(4,111)(5,767)

140%

120%

Cash								11,07813,053

Recurring revenue net retention 								Annual recurring revenue
The Group has been successful in continuing to increase ARR with £1.4 million being won during 2020 through sales to both newand existing customers (2019: £0.8 million). The opportunity to grow existing customer accounts through new products andincreasing the user count, along with excellent logo retention, have resulted in an ARR net retention figure of 140% during 2020.
Recurring revenues now account for 35% of all revenue, compared to 21% in 2019, and as this percentage continues to grow,this will bring increased visibility of revenues and cash flows.
Additionally, the OSPI acquisition has added a further £2.0 million of future ARR to the Group.
The combination of organic growth and the OSPI acquisition has resulted in the exit ARR as at 31 December 2020 increasing
by 165% to £5.3 million (2019: £2.0 million), after revaluation of ARR to year-end FX rates.

OrdersBookings of orders related to IQGeo own products increased by over 42% to £10.7 million during 2020 (2019: £7.5 million) withnew customers being added in all three of our key markets (North America, Europe and Japan). Of these bookings, £6.3 million
relates to recurring revenues due to new customers entering into multi-year subscriptions and a growing renewals base(2019: £2.5 million).
IQGeo own product order backlog as at 31 December 2020 was £8.3 million (2019: £3.7 million) with the growth being due toincreased order intake during 2020 and acquired backlog due to the OSPI acquisition. Third party Geospatial Services orderbacklog was £0.9 million (2019: £1.4 million).
Bookings of orders related to third party Geospatial Services were £1.2 million (2019: £1.6 million) reflecting the managed
decline in this legacy revenue stream.

IQGeo Group plc Annual Report 2020

29

Chief Financial Officer’s statement continued
Revenue
Revenue composition by revenue stream is summarised in the table below:									
Year
					
2020
% of total
2019% of total
on year
Revenue by stream					£’000revenue£’000
revenue
growthRecurring IQGeo product revenue					
3,195

35%

1,632

21%

96%

Perpetual Software					
299

3%

1,589

20%

(81)%

Services					
3,846

42%

2,328

30%

65%

Non-recurring IQGeo product revenue					
4,145

45%

3,917

50%

6%

Total IQGeo product revenue					
7,340

80%

5,549

71%

32%

1,815

20%

2,257

29%

(20)%

Total revenue					
9,155

100%

7,806

100%

17%

Geospatial services from third party products				The growth in ARR intake has translated into recurring revenue growth of 96% during 2020 to £3.2 million (2019: £1.6 million).
The increased Exit ARR of £5.3 million along with the anticipation of continued positive net retention of our existing customer base,is expected to provide future growth and stability to our recurring revenues.
Sales of perpetual software licences have decreased significantly from the prior year as the Group continues to focus on
subscription sales, however with some customers preferring a perpetual software offering it is anticipated that this one-off
revenue will continue to fluctuate year on year.
As the number of new deployments and expansion orders continue to increase, the associated service revenues have also
grown by 65% with a good backlog of further work to be recognised in future periods. Visibility of services revenues is now
around 6 months at current revenue rates.

Gross profit
					
2020
Gross profit					
£’000

Gross
margin %

2019
£’000

Gross
margin %Grossmargin var

4,746

52%

3,243

42%

10%

Gross profit/gross margin					Gross margin percentage has increased during 2020 by 10%. This increase is a result of the revenue mix moving towards higher
margin IQGeo product revenues. Improved services margins have been achieved through the delivery of internal efficiencies
driving higher staff utilisation on billable projects, as well as tight cost management.

Operating expenses and adjusted EBITDA from continuing operations
Operating expenses were £9.1 million (2019: £9.5 million) and are summarised as follows:								2020								
£’000

2019
£’000

Other operating expenses								
7,241

8,091

Depreciation								
369

285

Amortisation								
1,002

815

Share option expense								
130

102

43

110

Unrealised foreign exchange loss on intercompany trading balances				Non-recurring items								
289

136

Total operating expense								
9,074

9,539

Other operating expenses of the Group include sales, product development, marketing and administration costs, net of costs
capitalised.
The business continues to be focused on maintaining tight control of costs. Additionally, there has been a significant reduction
in travel and marketing expenditure as an unavoidable consequence of the pandemic. While these short-term measures have
reduced costs during 2020, the Group anticipates expenditure to increase again to support the growth of the business.
Adjusted EBITDA excludes amortisation, depreciation, share option expense, foreign exchange gains/losses on intercompany
trading balances and non-recurring items and is reported as it reflects the performance of the Group. Adjusted EBITDA for theyear was a £2.5 million loss (2019: Adjusted EBITDA £4.8 million loss).
Non-recurring costs in 2020 relate to OSPI acquisition costs.
The operating loss for the period from continuing operations was £4.3 million (2019: £6.3 million).

EPS and dividends
Adjusted diluted loss per share from continuing operations was 7.3 pence (2019: 8.8 pence). Reported basic and diluted loss per
share from continuing operations was 8.2 pence (2019: 9.4 pence). The Board does not feel it appropriate at this time to commence
paying dividends.

30

IQGeo Group plc Annual Report 2020

Strategic report

Consolidated statement of financial position
As at 31 December 2020, the Group had a cash position of £11.1 million with debt of £0.6 million (2019: £13.1 million and no debt).
On 1 December 2020 the Group successfully completed a fundraise with net proceeds of £5.2 million. The proceeds were used tofund the acquisition of OSPI which completed on 21 December 2020. £4.0 million of cash was paid to the sellers on completion of thedeal along with a further £0.8 million being settled through issue of IQGeo shares. The consolidated statement of financial position
includes liabilities for further deferred and contingent consideration totalling £1.5 million to be settled through issue of cash andshares in December 2021 and January 2022.

Non-current assets
Total non-current assets were £10.6 million (2019: £3.8 million).
As at 31 December 2020, £7.0 million of intangible assets associated with the OSPI acquisition are included within non-current assets.
Capitalised development costs at 31 December 2020 were £1.8 million (2019: £1.5 million) with the increase reflecting the investment in
the IQGeo product suite. No change has been made to the current three-year amortisation period, due to the fast-moving nature of
the technology.

Current assets
Total current assets increased to £16.8 million (2019: £15.4 million).
The consideration for disposal of the RTLS SmartSpace business included £2 million in a rollover investment into the sold business.
On 29 December 2020, the Group entered into an agreement to sell its shares in the rollover investment for a consideration of£2.5 million. The sale completed and £2.5 million cash was received by IQGeo in January 2021. As at 31 December 2020, the investment
has been reclassified as a current asset held for sale within the consolidated statement of financial position at a value of £2.5 million.

Total assets
Total assets increased to £27.5 million (2019: £19.2 million) due to non-current assets associated with the OSPI acquisition.

Current liabilities
Total current liabilities increased to £6.2 million (2019: £3.3 million) which includes an increase in deferred revenue of £1.7 million anddeferred acquisition payables of £0.7 million.

Non-current liabilities
Total non-current liabilities increased to £3.2 million (2019: £0.3 million) due to the recognition of lease obligations as our Denver
operations relocated to new premises during the year. Additionally £0.7 million contingent consideration relating to the OSPI acquisition
has been recognised.

Net assets
Net assets increased to £18.1 million (2019: £15.6 million).

Cash and cash flow
Operating cash outflow before working capital movement was £2.8 million (2019: £4.9 million). Operating cash outflow fromoperating activities after adjusting for working capital and tax was £2.3 million (2019: £4.7 million).
The Group had investment outflows of £1.3 million (2019: £1.2 million) due to expenditure on capitalised software development costsand £4.0 million associated with the OSPI acquisition.
Cash inflows from financing activities were £5.8 million (2019: £11.2 million outflow) primarily due to the fundraise completed in
December 2020. Additionally, £0.7 million of cash inflow related to a bank loan provided by HSBC bank USA under the Paycheck
Protection Program.

Going concern
The Directors have prepared detailed cash flow projections including sensitivity analysis on key assumptions. The projections
prepared show that the Group will be able to operate within the current levels of cash available. In addition to the year-end
cash balance, a further £2.5 million was received in January 2021 from the sale of the minority stake in the former RTLS business.
Also in January, £0.4 million was received from HMRC as a result of R&D tax credit claims in respect of the 2018 and 2019 financial
years. At the end of January 2021, the Group had cash net of borrowings of £13.1 million.
Based on the funding available, the Directors have a reasonable expectation that the Group has adequate resources to continue inoperational existence for the foreseeable future. Accordingly, the Group continues to adopt the going concern basis in preparing its
consolidated financial statements.

Haywood Chapman
Chief Financial Officer
22 March 2021

IQGeo Group plc Annual Report 202031

Principal risks and uncertainties
Effective risk management is critical to theachievement of the Group’s long‑term growth.

The Directors of IQGeo Group plc confirm
that we have carried out a detailed
assessment of the principal risks facing
the Company, including those that would
threaten its business model, future
performance, solvency or liquidity. Risks
that present a potential material impact
are identified and governed in accordancewith our risk management policies.

Effective risk management is criticalto the achievement of the Group’s
long‑term growth. The Board has overall
accountability for ensuring that risk iseffectively managed across the Groupthrough the implementation and reviewof the Group’s risk processes.

The principal risks listed in the table arethose we believe could cause our results
to differ materially from expected andhistorical results. They are also the risks
that may impact the achievement of theGroup’s strategic priorities.

Strategic risks
ChangePrincipal risk and impact

Mitigation of risk

Growth management•

Subscription revenue model provides greater stability
to revenue, cash flows and operations in future periods.
The OSPI business acquired has a customer base with
£2.0 million of ARR.

•

Assigned an integration team following the
OSPI acquisition.

•

Close monitoring of business development strategy
and regular reviews of the sales opportunity pipelineat Board meetings.

•

Head office support of regional office development in
the event of accelerated regional growth.

•

Development of systems and processes that can scalewith the business while maintaining good financial
management.

•

Close monitoring of gross margin including resource
allocation and utilisation on services projects.

•

The costs within the business are closely monitored toensure they remain in line with the growth trajectory,
and cash flow outlook, of the business.

Continuing investor confidence•

Clearly defined medium and long‑term strategy.

Access to future capital may be required as thebusiness develops.

•

Regular meetings with investors as part of the financial
results reporting cycle.

Growing market capitalisation and good investor relations
coverage will be viewed positively by existing andpotential customers.

•

Improved communication to articulate businessperformance and strategy.

Near-term expansion is expected in the future to develop
existing markets and to expand into new markets.
The risks associated with growth include the delivery ofmarket penetration through the conversion of the sales
funnel, and control of increases in fixed operating costs to
support revenue growth. If the Group is unable to manage
expansion effectively, its business and financial results
could suffer. The OSPI acquisition has resulted in higher
fixed operating costs through growth in staff headcount.
If the Group is unable to deliver growth to exceed the costsof operation then ultimately its cash resources will be fully
consumed.
Link to strategy:    Link to strategy:
   

Key

32

Increase

Decrease

No change

Regional growth

Building recurring revenue baseProduct innovation

IQGeo Group plc Annual Report 2020

Strategic report

Principal risk and impact

Mitigation of risk

Dependence on key customers•

The Group’s management performs regular reviews of theopportunity pipeline, including critical stages to complete
the larger deals with status reported at Board meetings.

•

The OSPI acquisition has broadened the customer baseadding 200+ logos.

•

Increase the breadth of the opportunity pipeline throughrecruitment of more quota‑carrying sales and pre-sales
personnel.

•

The Group continues to invest in the key customer
relationships that it has successfully retained over many
years, while also maintaining a strategy to extend anddiversify its customer base.

Customer satisfaction and retention•

Maintain regular communications with customers.

The subscription model is attractive to some customers
as it provides flexibility and reduces the initial investment
required to adopt the IQGeo Platform. Poor customer
satisfaction would impact renewal of subscription andmaintenance and support contracts.

•

Ensure appropriate level of resources are applied to
key customer accounts.

•

Deal with issues quickly through a clear escalation path.

•

Investment in product enhancements with a focus onunderstanding customer needs.

Technological risk•

The Group operates in an industry where competitive
advantage is heavily dependent on technology.
Technological development may reduce the importanceof the Group’s function in the market.

Regular monitoring of the industry and advances
through participation in research forums.

•

Review of the product roadmap by the Board
to ensure competitiveness.

•

Continued investment in technologies that meetcustomer needs.

•

Monitoring of planned R&D to ensure resources areallocated to deliver advances that are aligned to theGroup strategy, linking investment to commercial
viability and return on investment.

The Group has a concentrated customer base, many ofwhich are substantially larger enterprises than the Group.
The Group is reliant on significant projects with its key
customers to deliver financial results. The conversion ofopportunities to signed contracts and then the subsequent
timing of the projects is not fully under the control of
the Group.
Link to strategy:   

Expansion of additional users and new products isanticipated within our typical customer lifecycle.
This strategy would be limited in the event of poor
customer satisfaction.

ChangeBarriers to entry into the market are high with proof of delivery
in customer environments essential. The Group operates ina market with a small number of significant customers andreputational damage through poor customer satisfaction
could be significant.
Additionally, poor customer satisfaction could result indelays in the timing of customer payments which would
reduce the working capital available to the Group.
Link to strategy:
    

    

Slower adoption of disruptive technologies within themarkets we operate in will impact on revenue unless thebenefits of the IQGeo Platform are clearly communicated.
Link to strategy:

IQGeo Group plc Annual Report 202033

Principal risks and uncertainties continued
Strategic risks continued
ChangePrincipal risk and impact

Mitigation of risk

Covid-19 or other pandemics•

Maintain regular communications with customers.

The ability to build pipeline, develop opportunities andservice customers needs direct customer interaction which
is often most effective on a face-to-face basis requiring
travel. The ability to travel has been impacted by travel
restrictions. Key tradeshows have been cancelled and there
is uncertainty as to when these activities will recommence.

•

Be aware of potential impact to customer operations.

•

Implement digital marketing strategy to continuelead generation.

•

Maintain cloud-based infrastructure for IQGeo’s
IT systems.

Customer decision making may be delayed by operational
priorities or a broader economic downturn.

•Implemented travel and quarantine policy for staff aswell as comprehensive work from home capabilities.

IQGeo’s offices and those of its customers have been
affected by temporary quarantine measures.

•

Pipeline and forecast is risk weighted appropriately
to reflect impact of virus.

Global economic downturn caused by virus spread may
slow down investment plans for IQGeo target customers.
Link to strategy:   Operational risks
Principal risk and impact

Mitigation of risk

Staff recruitment and retention•

The Group has in place appropriate incentive structures
to attract and retain the calibre of employees necessary
to ensure the efficient development and management of
the Group.

•

The Group has implemented Employer of
Choice initiatives including career planningand organisational development.

•

Succession planning in key positions across thebusiness functions.

•

The Group monitors new developments, taking input
from local advisers.

•

The Group regularly reviews its processes to ensurethat the risk of default is minimised.

International trade•

On 31 January 2020, the UK left the European Union.
The risks include a potential increase in the level of market
volatility and barriers to trade between the UK and the
EU following the end of the transition arrangements on
31 December 2020.

IQGeo Germany GmbH, a German based subsidiaryof IQGeo Group plc, will contract with new customers
based in the European Union.

•

The Group’s customer sales are spread across multiple
territories which will partially mitigate against adownturn in any one region.

The Group’s success is substantially dependent upon
recruiting, retaining and incentivising senior management
and key technically skilled employees, the loss of whom
could have an adverse impact on the performance ofthe business.

Legal and regulatory breaches
The Group is required to comply with local laws, regulations
and legislation in each jurisdiction in which it operates.
These include compliance with financial reporting andconduct requirements, Health & Safety, Data Protection
and anti-Bribery rules.

ChangeFailure to comply with local laws may result in the cessationof the ability to trade in that jurisdiction, fines or the
allocation of resources to perform corrective actions.

The Group is exposed to economic downturn within themarkets in which it operates.

34

IQGeo Group plc Annual Report 2020

Strategic report

Principal risk and impact

Mitigation of risk

Digital infrastructure and cyber security•

Breaches of the Group’s digital security through cyberattacks or otherwise, or failure of the Group’s digital
infrastructure, could seriously disrupt operations, including
the provision of customer services and result in the loss
or misuse of sensitive information, legal or regulatory
breaches resulting in potential liability, and reputational
damage among the customer base leading to a decline
in revenues.

The Group continues to invest in resources in enhancing
site resilience and defences, improving network
monitoring and reviewing the incident response
processes to mitigate the impact of a security breach.

•

The Group ensures all employees receive training andtesting to improve their awareness of cyber‑threats.

•

Short and medium-term cyber security plans are
regularly reviewed by the Board.

ChangeFinancial risks
Principal risk and impact

Mitigation of risk

Clawback in respect of RTLS SmartSpace sale•

The Group has worked extensively with external advisers
in concluding the transaction.

•

The Group reviews local compliance and upcomingchanges to legislation with its advisers and continues
to update forecasts accordingly.

Foreign exchange risk•

The Group’s international operations expose it to anumber of risks that include the effect of changes in foreign
currency exchange rates. A major proportion of the Group’s
receivables and payables is currently denominated in
Canadian Dollars and US Dollars.

The Group relies on a partial natural hedge of Canadian
Dollar, US Dollar and Japanese Yen receivables being inthe same currency as the local operation’s payables.

•

The Group’s working capital is forecast and monitored in
the local currency of each subsidiary allowing the foreign
currency exposure across the Group to be reviewed.

•

In forming our accounting judgements, management
discuss estimates with internal experts within the IQGeo
Group to ensure all relevant facts are understood.

•

The underlying fact pattern and conclusions reached in
making accounting judgements are discussed in detailwith the Audit Committee of the Group.

On 31 December 2018, the Group disposed of its RTLS
SmartSpace business. The sale agreement included anumber of warranties which would allow the new owners of
the RTLS SmartSpace business to clawback consideration
paid, should additional liabilities crystallise at a later date.

Taxation
The Group operates globally and is exposed to international
tax laws, operating in multiple jurisdictions, therefore
increasing the complexity of maintaining local taxation
compliance. Changes to taxation legislation may have an
adverse impact on the working capital and profitability of
the Group.

Change

The impact of Covid-19 has added additional volatility
to foreign currency rates.

Financial reporting risk
In preparing the financial statements, the Group makes
accounting estimates that have a significant risk of causingmaterial adjustment to the carrying amounts of assets andliabilities within the next financial year. These judgements
are detailed further in note 4 to the financial statements andinclude revenue recognition, product development costs
and the application of IFRS 3 Business Combinations
following the acquisition of OSPInsight International Inc.

All risks reported in the prior year are still considered to be risks and are reported above.
The Strategic Report was approved by the Board of Directors on 22 March 2021 and signed on its behalf by:

Haywood Chapman
Chief Financial Officer
22 March 2021
IQGeo Group plc Annual Report 202035

Environment, employee engagement and CSR
IQGeo global staff distribution

5 422020 was a challenging year for
all, and due to the decision madeto adapt to the Covid-19 pandemic,
no staff were either furloughed or
made redundant.

18
67

USA

CanadaUK

Japan

Germany

Offices and environment

Covid-19 response

CSR

Prior to the Covid-19 crisis, the Company
was working to renew office space leases
in both the Denver and Cambridge
locations. The Denver office moved into
a new space that provides a modern andupscale high-tech space with a working
environment conducive to collaborative
team efforts. In addition, the Denver
office continues with its environmentallyconscious responsibility by continuing
to provide office recycling as well as
introducing composting. Office lights
are on motion-sensors to reduce electric
consumption automatically when areasof the office are dormant. While staying
under budget, the new office was able
to provide desks with adjustable heights
to accommodate any individual desired
workspace, supporting employee healthand well-being.

2020 was a challenging year for all, andthe Company made tough but strategic
decisions to adapt to the Covid-19
pandemic. In addition to revising thebudget, there was a concerted effort toprotect staff positions from redundancy.
These defensive actions included atemporary salary reduction that was
restored before the year end.

With the world in lockdown, continuing
our efforts at remaining in touch with
our global and local communities
was challenging in 2020. To support
this effort the Company made twochanges to further stay connected inour communities. We added a second
Charity Day in the US to encourage
staff to help out not only with local
charities, but to donate time forworthwhile organisations. The otherchange was the introduction of a
UK Charitable Giving Programme.
This voluntary programme allows
UK staff to donate funds to registeredcharities of their choice, all throughpayroll deduction. We are pleased toshare that 50% of our UK employees
are now participating in this new
programme by setting up recurring
donations. We will look to replicate
this programme in our other country
locations in the future.

Later in 2020, the Cambridge office
moved to a new facility that is a
10-minute walk from the old location.
This new serviced office facility has
been totally remodelled and has more
dedicated meeting and quiet space.
Both new facilities support growth andproductivity and will provide excellent
working environments for staff when
they are able to return to the office.

36

Other actions included moving staff to afull-time home working model, no travel,
and a policy of protocols designed tosafeguard those staff members thatspent time in an office. IT and HR werequick to set up support structures toenable staff to continue working fromhome without missing a step. Meetings
continued with MS Teams, and using
video we were able to stay visuallyconnected. To ensure team cohesion
and collaboration, we implemented
monthly All-hands meetings that provide
every member of staff with an update on
developments across the business.

IQGeo Group plc Annual Report 2020

Strategic report

Key statistics

8.6

8.6

8.5

8.1

Employees would recommend IQGeo
as an employer – 8.6/10

Employees feel they have job
security with IQGeo – 8.5/10

Employees understand the strategy
and direction of IQGeo - 8.6/10

9.1

Employees feel the management
team manages them well – 9.1/10

Employees are satisfied with theirbenefits package – 8.1/10

People profiles

Clark Stevenson,
Director of Customer Success

Dayna Kornman,
Senior Project Manager

Matt Jones,
Principal Solutions Architect

Location: Salt Lake City, Utah

Location: Squamish, BC, Canada

Location: Cambridge, UK

Started: December 2020

Started: 2012

Started: 2017

Job role overview/experience: For over
15 years, Clark has worked directly withOSPInsight customers and continues to do
so on IQGeo’s SMB team. From training,
consulting, account management, tonow leading the Customer Success team,his passion has always been being an
advocate for the customer.

Job role overview/experience:
GIS expert Dayna manages and supports
utility and telecoms customers with new
IQGeo installations, providing ongoing
operational support, custom development
and interfacing projects. She also helps
customers to identify business cases
for future IQGeo projects to streamline
operations across the business. Her
customers include: Bell Canada, Portland
General Electric (PGE), North West NaturalGas (NW Natural), Duke Energy andComporium.

Job role overview/experience:
Matt’s expertise lies in his ability to bridge
the gap between technology and businessto clearly understand customer problems.
He then works closely with a customer’s
IT and business teams to develop andarchitect innovative technical solutions to
help address these challenges.

What excites you most about IQGeo?
The future. Year on year, the achievementsof my peers and company blow me away.
I can’t wait to see where IQGeo goesnext. I feel very fortunate to grow with thecompany during this exciting time.

What’s your favourite thing to do outside
work? Getting outside; running, hiking,cycling, playing golf and travelling.

What excites you most about IQGeo?
The emphasis that IQGeo puts onbeing agile with product and providing
the customer with solutions fast istremendously exciting. I’ve always hated
telling a customer we can’t provide asolution. With IQGeo’s current offerings,
and commitment to listening and providing
future solutions, Customer Success is going
to be much stronger.
What’s your favourite thing to do outside
work? All sorts of family activities with mywife and two kids: board games, video
games, hiking, movies and the like. I love
being active and have taken running up as
hobby in recent years.

IQGeo Group plc Annual Report 2020

What excites you most about IQGeo?
The potential. I think we’ve only justscratched the surface when it comes toimproving systems and processes for ourcustomers across telecoms and utilities.

What’s your favourite thing to do outside
work? Spending time with my family
in the beautiful outdoors. I love yoga,
mountain biking, snowboarding, travellingand cooking. Put them all together = theperfect holiday.

37Section 172 statement
As required by Section 172 of the UK’s Companies Act, a directorof a company must act in the way he or she considers, in goodfaith, would most likely promote the success of the company forthe benefit of its shareholders.
In doing this, the director must have regard, amongst othermatters, to the following issues• 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 communityand environment• The company’s reputation for high standards ofbusiness conduct• Need to act fairly between members of the company
Engagement with stakeholders and consideration of theirrespective interests in the Company’s decision-making process
took place during the year as described below.

Shareholders
During the year, and alongside theupdated website, a regular email
update was sent to interested
investors and prospective
investors to provide insights on
the Company’s progress andachievements.
The primary mechanism forengaging with shareholders inmore depth is via the annual cycleof investor meetings associatedwith financial results for the halfyear and the full year, and the AGM.
Investors showed their supportof the Board and the Company’s
strategy with all votes cast in
favour of the resolutions at theGeneral Meeting and the Annual
General Meeting, apart from one
resolution at the AGM. At the 2020
AGM, all Directors were put up for
re-election and were re-elected,
excluding Timothy Gingell who had
already announced his intention to
step down from the Board.
The main topics of discussion
with shareholders were focused on
the strategic shift to a subscription
revenue model, the outlook on cash
flow and reaching breakeven, andstrategy behind business growth.

38

IQGeo Group plc Annual Report 2020

Strategic report

Customers

Employees

The Company engaged in a
detailed review of use cases with its
customers, identifying opportunities
for product development andclarifying the competitive
advantage that IQGeo has in its
chosen target vertical markets.

We have an experienced, diverseand dedicated workforce which
we recognise as a key asset of ourbusiness. Therefore, it is importantthat we continue to create the rightenvironment to encourage andcreate opportunities for individuals
and teams to realise their fullpotential.

Due to the Covid-19 pandemic,
the Company was unable to hold its
annual ‘IQGeo Meet-up’ in Denver
to which many of its customers andprospects would attend to share
their experiences and successes, aswell as learn about future productdevelopment plans. In place of thislive event the Company held two“Virtual Meet-up” events. One in
May for our Japanese customers(conducted in Japanese) and asecond in October (conducted in
English) for North America and
EMEA customers. In total we had 623
people register for these two eventsand content from these sessions was
also posted for on‑demand video
viewing after the live events.
The Board gained insights oncustomers, in addition to reports
from the Executive Directors, during
Board meeting sessions through theyear dedicated to North America
from the General Manager Jay
Cadman and then at a separate
meeting focused on Europe andJapan from the General Manager
Christian Wirth.

IQGeo Group plc Annual Report 2020

During 2020 Denver-based staff
were consulted on the design of
new office space following the endof its prior lease in April 2020.
The Covid-19 pandemic has hada significant impact on the waythat staff work and interact witheach other and quickly shifted toremote working at the start of thepandemic in 2020. Management
have continued to hold regularall-hands staff briefings with guest
presenters from within the IQGeo
organisation to maintain goodlines of communication and astrong team ethos. Staff willcontinue to work remotely forthe foreseeable future.

Community& environment
Being a software company,
the Company tries to minimise
its impact on the environment
through a number of measures,
including the following• Providing products to customers
to improve the safety of theiroperations (particularly
to reduce the risk of gas
explosions), and restore service
after storm damage• Supporting its customers in
improving their collaborationand productivity, thereby
reducing travel and waste• Providing public transportseason tickets to Denver‑based
staff

The Board and management
team pay close attention to theresults of the employee survey
carried out annually in the fourth
quarter, taking note of trends anddevelopments and creating actionplans to address any issues arising.

39

Board of Directors
The Board of Directors has overall responsibility
for the Group. Its aim is to provide the leadershipand industry-specific insight required to develop a
successful business, through utilising the broad rangeof skills and experience of the Board members.

Experience
Paul spent over 21 years with AVEVA Group plc and was Group FinanceDirector from 2001 to 2011. Paul is a Fellow of the Chartered Association of
Certified Accountants and was recipient of the FTSE 250 Finance Director of
the Year in 2008. Paul was appointed to the IQGeo (then Ubisense) Board on
28 February 2011. Previously, Paul was a non-executive director of Anite plc,
KBC Advanced Technologies plc, Escher Group Holdings plc and Frontier Smart
Technologies Group Ltd.

Other appointments
Paul Taylor
Chair

A

*R N

Paul now serves as a non-executive director of Thruvision Group plc and Trusteeof CADCentre Pension Fund.

Experience
Richard brings 25 years of experience in developing market leading businesses
for automotive, financial and industrial customers. He was previously CEO of Asset
Control, a supplier of data management systems to leading financial institutions,and COO at WEMA, a leading provider of sensors to commercial vehicle
manufacturers. Richard joined the IQGeo (then Ubisense) Board on 14 December
2016.

Other appointments
None.

Richard Petti
Chief Executive Officer
Experience
Haywood has over 15 years' experience in senior finance roles within high growth
listed and PE backed organisations. He joined IQGeo from Castleton Technology
PLC, a leading software and managed services provider to the social housing
sector, where he was CFO from 2014 and led the business from a cash shell via
10 acquisitions to a £26 million revenue, £6.3 million EBITDA company with 68%
recurring revenue which was recently sold to TA backed MRI Software, returning
more than 4x to initial investors.

Other appointments
None.

Haywood Chapman
Chief Financial Officer
Key

40

Chair of* Committee

A

Audit
Committee

N

Nomination
Committee

R

Remuneration
Committee

I

Independent

IQGeo Group plc Annual Report 2020

Corporate governanceExperience
Dr. Robert Sansom co-founded and was CTO of FORE Systems, acquired by
Marconi for $4.5 billion in 1999. Robert joined the IQGeo (then Ubisense) Board
on 16 December 2005. He co-founded and was Chairman of the Cambridge
Angels from 2001 to 2010. Robert was elected as a Fellow of the Royal Academyof Engineers in 2010.

Other appointments
Robert is a non-executive director to enterprises including Arachnys Information
Services Ltd, Myrtle Software Ltd, Featurespace Ltd, Camfed International,
Cambridge Communication Systems Ltd, CRFS Ltd and Netronome Inc.

Dr. Robert Sansom
Non-Executive Director

N*
Experience
Ian has over 30 years’ strategy, engineering and operations experience inthe telecoms, utilities and manufacturing industries. He was appointed as a
Non‑Executive Director to the IQGeo (then Ubisense) Board on 23 May 2014.
Previously, Ian was executive chairman of Coryton Advanced Fuels, the transport
fuels specialists, and a director of Ricardo UK Ltd., the engineering consultants.

Other appointments
Ian is also a non-executive director of Surface Generation Ltd.

Ian Kershaw
Non-Executive Director

A

R

I

Experience
Max co-founded Kestrel in 2009. He joined the IQGeo Board on 31 October 2019.
Max has been advising and investing in quoted and unquoted UK smaller companies
since 1998 and prior to Kestrel was a managing director of KBC Peel Hunt.

Other appointments
Max is also a fund manager of Kestrel Opportunities, sits on the Investment
Committee for KITS and is a non‑executive Director of Ingenta PLC.

Max Royde
Non-Executive Director

R*
Experience
Andy is a professional non-executive director and industry consultant after
recently retiring from Vodafone Group as Regional Technology Director for the
Africa, Middle East and Asia-Pacific Region. Prior to that he was Vodafone’s Group
Chief Networks Officer and CTO of Verizon Wireless in the US. Since the early 1990s
he has held CEO, COO and CTO positions at major telecommunications companies
and has gained extensive public and private experience as a Director on the
Boards of companies such as Eircom, Indus Towers, Vodafone Italy and Vodafone
Australia. Andy was appointed to the IQGeo Board on 21 June 2019.

Other appointments
Andy MacLeod
Non-Executive Director

IQGeo Group plc Annual Report 2020

Andy is currently a non-executive director of Gfinity PLC.
I

41

Corporate governance report
In accordance with the guidance published by the London
Stock Exchange, the Group has adopted the Quoted Company
Alliance’s (QCA) Corporate Governance Code for Small and
Mid‑Sized Quoted Companies which was published in April 2018.

Principle 1:
Establish a strategy and business model
which promotes long-term value for shareholders
IQGeo has defined the telecoms andutility industries as its target verticalmarkets. The business strategy is todevelop and sell its highly innovative
geospatial productivity and collaboration
software to these industries, transforming
the customers' ability to plan, design,
install and service networks including 5G,
fibre, coaxial, electricity, gas and water.
The Group is focused on a three-point
strategy to achieve the goal of building
a fast-growing and cash generative
business.

Regional growth• Increase the number of new logos orcustomers signed in our key markets• Build commercial partnerships toaddress specific markets or use‑cases• Increase the Annual Recurring
Revenue (ARR) received fromeach existing customer for IQGeo’s
products whilst managing down thelegacy third party service business

Building the recurring revenue base
• Increase the number of new customers
establishing subscription contracts• Build and retain a significant ARRorder base enabling the business togenerate positive cash flow

Product innovation• Develop customer-driven productroadmaps solving enterprise-levelbusiness challenges• Further develop the modular software
platform addressing known customer
issues• Clearly establish with customers theshort-term and long-term benefits
that IQGeo products will deliver• Create subscription-only productofferings to maximise ARR

Principle 2:
Seek to understand and meet shareholder expectations
The Company maintains a dedicatedcontact form which is prominently
displayed on its website together with theCompany’s address and phone number
for investors to use.
The Company holds an Annual General
Meeting (AGM) to which all members
are invited. During the AGM, time is set
aside specifically to allow questions
from attending members to any Board
member.

42

As the Company is too small to have a
dedicated investor relations department,
the Chair and CEO are responsible forreviewing all communications received
from members and determining the mostappropriate response, engaging theexecutive team and Board as needed.

In addition to these passive measures,
the CEO typically engages with members
through investor roadshows held at least
twice each year following the release of
results.

IQGeo Group plc Annual Report 2020

Corporate governancePrinciple 3:
Take into account wider stakeholder and social
responsibilities and their implications for long‑term successIn addition to members, the Company
believes its main stakeholder groups are
its customers, employees and the wider
community.
The Company devotes significant
time to understanding and acting on
the needs and requirements of thesegroups through dedicated meetings andactivities designed to obtain feedback
directly from the stakeholders.

With regard to corporate social
responsibility (CSR), the global lockdown
has made it challenging for the Company
to support CSR programmes throughcorporate activities sponsored by its
regional offices. However, by adding
a second Charity Day the Company
encouraged its US staff to donate
more time to worthwhile organisations
and through the introduction of a
UK Charitable Giving Programme
encouraged UK staff to donate toregistered charities of their choicethrough a payroll deduction.

IQGeo believes that participation in CSR
activities is a fundamental responsibilityof the Company. It encourages the
personal development of employees
and greater community integration,
which helps contribute to the long-term
success of the Company by creating
a more experienced, passionate andproductive workforce.

Principle 4:
Embed effective risk management, consideringboth opportunities and threats, throughout the organisation
Risk management on pages 32 to 35 ofour 2020 Annual Report details risks tothe business, how these are mitigated
and the change in identified risks overthe last reporting period.
The Board considers risk to thebusiness at every Board meeting andthe risk register is regularly reviewed.
The Company formally reviews anddocuments the principal risks to thebusiness at least annually.
Both the Board and senior managers are
responsible for reviewing and evaluatingrisk and the Executive Directors meet atleast monthly to review ongoing trading
performance and discuss budgets,
forecasts and new risks associated withongoing trading.

IQGeo Group plc Annual Report 2020

Internal control
The Board of Directors has overall
responsibility for the Group’s system ofinternal control and for reviewing its
effectiveness. The risk management
process and systems of internal control
are designed to manage, rather thaneliminate, the risk of failure to achieve
the Group’s objectives. It should berecognised that such systems can only
provide reasonable, but not absolute,assurance against material misstatement
or loss. The Directors acknowledge their
responsibilities for the Group’s system
of internal control and for reviewing its
effectiveness. The principal features ofthe system of internal financial controls
include the following• Budgetary control over all operations,
measuring performance against
pre‑determined targets on at least
a monthly basis• Regular forecasting and reviews
covering trading performance, assets,
liabilities, headcount and cash flows• Authority covering key financial
commitments including, but
not necessarily limited to,capital expenditure, office leasecommitments and recruitment• Identification and management of key
business risks
The Board continually reviews theeffectiveness of other internal controls,
including financial, operational,
and compliance controls and risk
management.

43

Corporate governance report continued
Principle 5:
Maintain the Board as a well-functioning, balanced team led by the Chair
The Company is controlled by the Boardof Directors. The Board comprises theNon-Executive Chair, four Non-Executive
Directors and two Executive Directors.
The Non-Executive Chair is responsible
for running the Board and Richard Petti,
the Chief Executive, has responsibility
for running the Group’s business andimplementing Group strategy.
The Non-Executive Directors are
required to be available to attend
Board meetings and to deal with both
regular and ad-hoc matters and they
are expected to commit sufficient time tofully discharge their responsibilities. All
Non-Executive Directors have confirmed
and demonstrated that they haveadequate time available to meet therequirements of the role and that they
have no conflicts.
Executive Directors work full time in thebusiness and have no other significant
outside business commitments.

All Directors receive regular and timely
information on the Group’s operationaland financial performance. Relevant
information is circulated to the Directors
in advance of meetings.
The Board recognises that Paul Taylor,
Robert Sansom and Max Royde are notregarded as independent non-executive
directors and has started the search
for an additional Independent
Non-Executive Director toaddress this matter.

• Consideration of dividend policy• Approving and accepting all newcommitted funding facilities• Approving and accepting majorchanges in the capital structure of theCompany• Reviewing and approving formal
treasury policies relating to funding,liquidity, transactional foreignexchange and interest rate risk
management

The Board holds full meetings at least ten
times per year, with attendance requiredin person whenever possible.

• Reviewing the health and safety, andenvironmental performance of theGroup

The principal matters that it considers
are as follows• Approving corporate acquisitions,mergers, divestments, joint venturesand major capital expenditure• Reviewing operating and financial
performance• Ensuring that appropriate
management development andsuccession plans are in place• Determining corporate strategy,
including consideration and approvalof the Company’s annual strategy
review• Receiving, reviewing and approving
recommendations by the designatedcommittee on matters related toaudit, nominations and remuneration
16 Board meetings were held in 2020.
Attendance at the meetings was asfollows:

Total meetings attended
Paul Taylor

  16 (16)Richard Petti

  16 (16)  10 (10)Tim Gingell
Robert Sansom

  15 (16)

Ian Kershaw

  16 (16)Andy MacLeod

  13 (16)

Max Royde

  16 (16)

Haywood Chapman  4 (4)

Figures in brackets denote the maximum number of meetings that could havebeen attended by that person.

44

IQGeo Group plc Annual Report 2020

Corporate governancePrinciple 6:
Ensure that between them the Directors have the necessary up‑to‑dateexperience, skills and capabilities
The Board of Directors has overall
responsibility for the Group. Its aim
is to provide the leadership andindustry‑specific insight required todevelop a successful business, throughutilising the broad range of skills andexperience of the Board members.
The Board is satisfied that, between
the Directors, it has significant industry,financial, public markets and governanceexperience, possessing the necessary
mix of experience, skills, personalqualities and capabilities to deliver the
strategy of the Company for the benefitof the shareholders over the medium tolong term.

The roles of the Chair and CEO are
split in accordance with best practice.
The Chair has responsibility ofensuring that the Board discharges its
responsibilities and is also responsible
for facilitating full and constructive
contributions from each member of theBoard in determination of the Group’s
strategy and overall commercial
objectives. The CEO leads the businessand the executive team ensuring thatstrategic and commercial objectives
are met. He is accountable to theBoard for the operational and financial
performance of the business.

The Nomination Committee of theBoard oversees the process and makes
recommendations to the Board on all
new Board appointments. Where new
Board appointments are considered,
the search for candidates is conducted,
and appointments are made, on merit,against objective criteria and with due
regard for the benefits of diversity on
the Board, including gender.
The Nomination Committee also
considers succession planning.
The Board carries out an evaluationof its performance annually, taking into
account the Financial Reporting Council’s
Guidance on Board Effectiveness.

Principle 7:
Evaluate Board performance based on clear and relevant objectives, seeking
continuous improvement
Board members are appointed with fullconsideration of the knowledge and skills
that they will contribute to the Board andare aligned to the needs of the Company
at that time.

Board composition

The Chair ensures that full considerationof the development of the Board isaddressed by reviewing the Board
composition annually in consultation
with the other Board members.
The Board, through its Remuneration
Committee, ensures that appropriateannual performance targets are set for
Executive Board members.

Length of tenure (years)

2

1

4

2

3

Executive

1–3 years

4–6 years

2

Non-Executive

The Chair routinely reviews the
management and performance of theBoard Committees and will address any
performance concerns directly with the
Chair of, and/or participants of, that
Committee.

Non-Executive
Chairman

IQGeo Group plc Annual Report 2020

7+ years

45

Corporate governance report continued
Principle 8:
Promote a corporate culture that is based on ethical values and behaviours
The Board believes that the promotionof a corporate culture based on soundethical values and behaviours is essential
to maximise shareholder value. These
values are reinforced with employeesby the management team throughannual business review sessions andform the cornerstone of the employee
performance review process.

The ethical standards at IQGeo are a
key factor in the evaluation of individual
performance and that of the entire
Company.

Principle 9:
Maintain governance structures and processes that are fit for purpose andsupport good decision making by the Board
The Board of IQGeo Group plc currently
comprises two Executive Directors,
one Non-Executive Chair and four
Non‑Executive Directors. For now,the Board considers its composition
appropriate given the size of theCompany, its revenues and profitability.
The key Board roles are as follows• Chair: The primary responsibilityof the Chair is to lead the Board
effectively and to oversee
the adoption, delivery, andcommunication of the Company’s
corporate governance model. The
Chair has sufficient separation fromthe day-to-day business to be able
to make independent decisions.
The Chair is also responsible
for making sure that the Board
agenda concentrates on the key
issues, both operational andfinancial, with regular reviews of theCompany’s strategy and its overall
implementation• CEO: Charged with the delivery of thebusiness model within the strategy
set by the Board. Works with the
Chair and Non-Executive Directors
in an open and transparent way.
Keeps the Chair and Board up todate with operational performance,
opportunities, risks, and other issues
to ensure that the business remainsaligned with its key objectives

46

The Board has three sub-committees
as follows• Audit Committee:
See Audit Committee reportfor further details• Remuneration Committee:
See Remuneration Committee reportfor further details• Nomination Committee:
The Nomination Committee
will consider the selection andre‑appointment of Board members

During the period under review,
the Nomination Committee has met two
times on a formal basis. The Nomination
Committee is expected to meet formally
twice a year. A summary of Nomination
Committee composition and attendance
was as follows:
Total meetings attended

Robert Sansom (Chair)

2 (2)Paul Taylor

2 (2)The Nomination Committee has
responsibility for the following matters• Reviewing the size and compositionof the Board to ensure that an
appropriate mix of skills, knowledge
and experience is achieved• Succession planning for the Board andother key management roles• Identifying and recommending
to the Board candidates to fill
Board vacancies• Ensuring Non-Executive Directors
are able to make the necessary timecommitments to fulfil their role
• Ensuring Non-Executive Directors
receive letters of appointment,
detailing their responsibilities• Making recommendations to
the Board about the appointment,
removal or continuation in office of
any Director

IQGeo Group plc Annual Report 2020

Corporate governancePrinciple 10:
Communicate how the Company is governed and is performing by maintaining
a dialogue with other relevant stakeholders
The Company views shareholders,customers, employees and the wider
community as the key stakeholders.
The Company communicates with its
shareholders through regular emails,
the Annual Report and Accounts,
full‑year and half-year announcements,
the Annual General Meeting (AGM) and
one-to-one meetings with existing andprospective shareholders.
The Company keenly engages withcustomers on their use of the products
and their desire for future potential
development. The Company consultswith customers on opportunities for
exploiting, or expanding, features andfunctions of their existing deployment togain the benefits of further productivity
and collaboration.

IQGeo Group plc Annual Report 2020

Each year the Company holds a
two-day customer conference
called the IQGeo Meet-up in Denver.
During this interactive event, customers
share their challenges and experienceswith IQGeo products and engage inworkshops and networking activities that
promote collaboration with IQGeo andbetween customers. Due to the Covid-19
pandemic, the Company was unable tohold the IQGeo Meet-up in 2020. In placeof this live event the Company held
two “Virtual Meet-up” events in 2020.
One in May for our Japanese customers(conducted in Japanese) and a second in
October (conducted in English) for North
America and EMEA customers. In total
we had 623 people register for these two
events and content from these sessions
was also posted for on-demand video
viewing after the live events.

The Company engages with employees
on a regular basis through all-hands
meetings, performance reviewsand employee surveys. There is awell‑established internal communication
process that provides employees with thelatest product development, sales, IT and
HR information, and essential corporate
resources are made available to all
employees on an internal IQGeo portal.
The Board invites senior management toattend specific Board meetings to discussin detail aspects of performance andto gain greater insight on operations.
Members of the Board visit the Denver
and Cambridge offices from time to timeon an informal basis to talk to staff andjoin Company events where appropriate
and possible.

47

Audit Committee report

A summary of Committee composition
and attendance is as follows:
Paul Taylor (Chair)  4 (4)

Ian Kershaw

  4 (4)This report describes the work of the
Audit Committee (the 'Committee')and the significant issues it considered
in 2020.

The Committee
continues to besatisfied with the
integrity of IQGeo’s
financial reporting
through robustinternal controls
and theimplementationof appropriate
accounting policies.

The Audit Committee consists of the
Chair and an independent Non‑Executive
Director, who between them have abalance of financial experience andbusiness knowledge. There were nochanges to the Committee membershipduring the year.
During the period under review, theCommittee has met four times on aformal basis. The Committee is expected
to meet formally four times a year.
The timing of meetings allows the
Audit Committee to consider theexternal auditor’s planned approachto the half‑year interim review
and full‑year audit of the Annual
Report. The Committee discusses
the auditor’s findings ahead of thefinancial statements being approvedfor release. As part of its procedures,
the Committee discusses the interim
and annual financial statements withthe external auditor. When appropriate,
non-Committee members areinvited to attend, including the Chief
Financial Officer and members of thefinance team.

In accordance with its terms of reference,
the Audit Committee has responsibility
for the following matters:• Financial reporting• Monitor the integrity of thefinancial statements of the Group,
reviewing any significant reporting
issues and judgements they
contain• Advise on the clarity of disclosure
and information contained in the
Annual Report and Accounts• Ensure compliance with applicableaccounting standards and review
the consistency of methodology
applied• External audit• Recommending appointment,
re-appointment or removal of
the external auditors• Oversee the relationship withthe external auditor, reviewing
performance and advising
the Board members on their
appointment and remuneration• Approving non-audit services
provided by the external auditor• Whistleblowing• Review of the Group’s
whistleblowing policies
and procedures• Internal control• Review management’s andthe internal auditor’s reports on
the effectiveness of systems forinternal financial control, financial
reporting and risk management;
together with monitoring
management’s responsivenessto their findings

48

IQGeo Group plc Annual Report 2020

Corporate governance

Activities of the Committee during
the year
The Audit Committee has met with boththe auditor and internal management
during the year and discussed thefollowing key matters• Accounting policies applied in respectof the acquisition of OSPInsightInternational Inc.
• The Group’s revenue recognition
policies applied during the year
• The resolution of significant
accounting judgements or of mattersraised by the external auditor during
the course of their half-year review
and annual statutory audit. These key
matters are stated within the external
auditor’s report included within thisAnnual Report• The external auditor’s report on any
deficiencies in the internal controlsof the Group identified during thestatutory audit. IQGeo Group plc does
not have an internal audit function
and believes that given the size of thebusiness, this remains appropriate

IQGeo Group plc Annual Report 2020

• Assessment of the independence ofthe external auditor. As part of thisreview, the Committee monitors theprovision of non-audit services by
the external auditor. An analysis of
non-audit services is disclosed innote 10 to the financial statements.
The non‑audit services charged
by Grant Thornton in 2020 relate
to the review of half‑year results,
the provision of tax advisory
services and UK tax complianceservices. The Audit Committee
was satisfied that safeguards areadequately observed to ensure noissues arise impacting upon theauditor’s independence
The Audit Committee has satisfied itself
that the key areas discussed above havebeen addressed appropriately within
the Annual Report and that the Group
continues to work and communicate welltogether.

49

Remuneration Committee report

A summary of Committee composition
and attendance is as follows:

The Committee
continues tofocus on ensuringthat Executive
remuneration
packages reflect
the achievement of
the Group’s strategy
and sustained
shareholder growth.

50

Max Royde (Chair)  2 (2)

Paul Taylor

  2 (2)

Ian Kershaw

  2 (2)The Remuneration Committee has
responsibility for the following matters

During the period under review, theCommittee has met twice on a formal
basis. The Committee is expected tomeet formally twice a year.

• Agreeing the framework for theGroup’s remuneration policy for
Directors and key management
personnel, including determining
individual remuneration policies for
Executive Directors• Approving the design and targets for
short and long‑term incentive plans,
including share option plans• Determining the policy and scope of
pension arrangements• Ensuring contractual terms andpayments made on termination are fair
to both the individual and the Group• Agreeing the policy for authorisingexpense claims by the Chair andChief Executive
The Committee aims to set levels of
remuneration for Executive Directorsthat are sufficient to attract, retain
and motivate Directors of the quality
required, without paying more thannecessary, and that are appropriate
for the size and complexity of theGroup. It aims to see that a significant
proportion of each Executive
Director’s remuneration package isperformance‑related.

The Remuneration Committee comprisesof Max Royde, Paul Taylor and Ian
Kershaw, who are Non-Executive
Directors of the Company.

Remuneration practice overview
The Committee believes in pay for
performance and that Executive
Directors’ remuneration should bedesigned to promote the long-term
success of the Group.
When reviewing and setting remuneration
policy, the Committee benchmarks
remuneration against quoted companiesof a similar size and considers a range offactors including the Group’s strategy andcircumstances, the prevailing economic
environment and best practice guidelines.
The policy must also enable IQGeo Groupplc to attract, retain and motivate thetalent it needs to ensure success.
The remuneration of the Non-Executive
Directors is determined by the Executive
Directors, and the Chair, rather than theCommittee.

IQGeo Group plc Annual Report 2020

Corporate governance

Remuneration of
Executive Directors
The Executive Directors are entitled toreceive base salary, benefits, employer
pension contributions and to participate
in share option schemes approved by the
Remuneration Committee.
The appointment of the Chief Executive
Officer and the Chief Financial Officer
is terminable on six months’ notice byeither party.

Base salary
Base salaries are reviewed annually
and adjustments made if required toreflect Group performance, individual
performance and market rates.
Remuneration is through the Group’s
flexible benefits scheme under which
the individuals can elect to switch basic
salary into pension contributions andother benefits.

IQGeo Group plc Annual Report 2020

Benefits
The Group offers benefits to all
employees including life assurance andhealthcare solutions, appropriate to eachof the markets in which it operates.

Bonuses
Executive Directors are eligible
to participate in an annual bonus
programme, which is calculated byreference to the annual financial andoperational targets including orders,revenue, operating cash flow andgoal‑driven objectives.

Remuneration of
Non-Executive Directors
The Non-Executive Directors haveentered into letters of appointment with
the Company. The appointments are
terminable on one month’s notice byeither party.
The appointment of the Non-Executive
Chair is terminable on six months’ noticeby either party.

Pensions
The Group operates a defined
contribution personal pension scheme
in the UK, and similar schemes in othercountries. Under the UK scheme rules
the Group pays a matched contributionof up to 5% of base salary as adjusted
for current pension and tax legislation.
The scheme is open to Executive
Directors and employees.

51Remuneration Committee report continued
Directors' remuneration
The Directors received the following remuneration during the year:
			
Basic
			
salaryDirector			£’000

Benefits Performancein kindpayments
£’000
£’000

excluding		
Total
pensions
Pensions
2020
£’000
£’000
£’000

Total
2019
£’000

Richard Petti1			230

4

100

334

9

343

330

Tim Gingell2			73

3

—

76

8

84

216

Haywood Chapman3			

1

25

79

4

83

—
546

53

Executive Directors			356

8

125

489

21

510

Paul Taylor4			80

—

—

80

—

80

79

Peter Harverson5			—

—

—

—

—

—

46

Robert Sansom6			—

—

—

—

—

—

—

Ian Kershaw			

20

—

—

20

—

20

20

Oliver Scott7			

—

—

—

—

—

—

17
13

Andy MacLeod 			25

—

—

25

—

25

Max Royde7			

20

—

—

20

—

20

3

Non-Executive Directors			

145

—

—

145

—

145

178

Total			 501

8

125

634

21

655

724

8

1. Richard Petti is entitled to a performance‑related bonus of up to £125,000 and receives a car allowance of £9,000.
2. Tim Gingell resigned as a Director on 25 September 2020.
3. Haywood Chapman commenced employment on 10 September 2020 with a base salary of £180,000 and is entitled to a performance‑related bonus of up to £85,000.
Haywood was appointed as a Director of the Company on 25 September 2020.
4. Paul Taylor was confirmed as Chair of the Company on 19 February 2019. The annual remuneration of the appointment is £75,000 with an additional £5,000 per annum
whilst chair of the Audit Committee.
5. Peter Harverson resigned, and left, as Chair of the Company on 13 February 2019. A final settlement of £18,750 was paid on his departure from the Company.
6. Robert Sansom has waived his entitlement to annual remuneration of £25,000 (2019: £25,000 waived).
7. Max Royde was appointed, and Oliver Scott resigned, as Non-Executive Director of the Company on 31 October 2019. The annual remuneration of the appointment
is £20,000.
8. Andy MacLeod was appointed Non-Executive Director of the Company on 21 June 2019. The annual remuneration of the appointment is £25,000.

Share options
The Company issues share options to the Executive Directors and employees to reward performance and to align interests withthose of the shareholders.
The aggregate emoluments disclosed above within Directors’ remuneration does not include any amounts for the value of options
to acquire ordinary shares in the Company granted to or held by the Directors.
On 15 June 2020, IQGeo Group plc implemented a new long-term incentive share option plan with options granted to Executive
Directors and employees of the Group. IQGeo Group plc granted a total of 2,221,000 options of two pence each in the Company to
the Directors with varying exercise prices as set out below. The options vest in portions of one‑third on the first, second and third
anniversaries of grant and have no further performance conditions other than ongoing employment on the date of vesting andof exercise. Awards will be subject to a two-year holding period from vesting point, with participants only permitted to sell sharessufficient to cover the exercise cost and any tax liability within this holding period.
					Awards				AwardsAwards					
outstanding				outstanding exercisable					atGrantedExercised
Lapsedat 31
at 31
Award 			Exercise
1 January during the during the during the December December
date
Vests
Expires
price
2020
year
year
year
2020
2020
Director
Year
Year
Year
£
NumberNumberNumberNumberNumberNumberRichard Petti

2016

2019

2026

0.020 1,600,000

Richard Petti

2020

2023

2030

0.460

Tim Gingell

2016

2019

2026

0.020

700,000

Paul Taylor

2020

2023

2030

0.460

Haywood Chapman

2020

2023

2030

0.675

—

— 1,600,000

—
—

—

—

—

—

700,000—

121,000——

121,000——

500,000——

500,000—— 2,300,000 2,221,000—

Total					2,300,000 2,221,000

52—— 1,600,000— 1,600,000—

IQGeo Group plc Annual Report 2020

Corporate governanceDirectors’ report
The Directors present their Annual Reporton the affairs of the Group together withthe audited financial statements for theyear to 31 December 2020. The corporate
governance report set out on pages 42 to
47 forms part of this report.

Incorporation and constitution
IQGeo Group plc is domiciled in Englandand incorporated in England and Wales
under Company Number 05589712.
IQGeo Group plc’s Articles of Association
are available on the Group’s website atwww.iqgeo.com.
Based on the country generating thegreatest revenue, the main country ofoperation is the United States of America.

Principal activity
The Group delivers end-to-end
geospatial software which improves
productivity and collaboration acrossenterprise planning, design, construction
and maintenance processes for telecoms
and utility network operators. Our
mobile-first enterprise solutions create
and maintain an accurate view ofcomplex network assets that is easily
accessible by anyone, wherever andwhenever needed.
Specialised applications combinedwith our open IQGeo Platform help
network operators create a single
source of network truth to meet theirdigital transformation ambitions andoperational KPIs. Our award-winningsolutions save time and money, andimprove safety and productivity, while
enhancing customer satisfaction.

Business review and key
performance indicators
The Group’s results are set out in the
consolidated income statement on
page 66 and are explained in the Chief
Financial Officer’s statement on pages 28
to 31. A detailed review of the business, its
results and future direction is included in
the Non-Executive Chair’s statement on
pages 6 and 7.
On 21 December 2020 the Groupacquired OSPInsight International Inc.
("OSPI") for a total consideration of
up to $8.75 million. The consideration
paid consisted of both cash and issue
of IQGeo shares. Due to the timingof the acquisition the impact on the
consolidated income statement of theGroup is extremely minimal.

Capital structure
The Company has one class of ordinary
share of two pence each which carries noright to fixed income. Each share carries
the right to one vote at general meetingsof the Company.
Details of the share capital of theCompany, including shares issued during
the year, can be found in note 22 of theconsolidated financial statements.

There are no specific restrictions on thesize of a holding nor on the transfer ofshares, which are both governed by
the general provisions of the Articles of
Association and prevailing legislation.
The Directors are not aware of any
agreements between holders of theCompany’s shares that may result in
restrictions on the transfer of securities
or on voting rights.
Details of employee share schemes are
set out in note 23.
No person has any special rights ofcontrol over the Company’s share capitaland all issued shares are fully paid.
With regard to the appointment andreplacement of Directors, the Company
is governed by its Articles of Association,
the Companies Act and related
legislation. The Articles of Association
themselves may be amended by special
resolution of the shareholders.
On 1 December 2020 the Group
successfully completed a fundraiseissuing 6,794,872 of the Company’s
ordinary shares at 78 pence per shareraising net proceeds of £5.2 million.
The proceeds were used to fund theacquisition of OSPI which completed on
21 December 2020.
As at 31 December 2020, the Company
had 57,312,252 ordinary shares in issue.

Substantial shareholdings
As at 22 March 2021, the Company had been notified of the following significant interests in its ordinary share capital								Total								holding								Number% of issued
sharecapital

Kestrel Partners								14,347,020

25.0

Columbia Threadneedle Investments								9,858,129

17.2

Canaccord Genuity Group Inc.								8,211,295

14.3

Robert Sansom								4,216,329

7.4

NFU Mutual Insurance Society Ltd								 2,658,457

4.6

Janus Henderson Investors								1,791,378

3.1

Teviot Partners								1,760,758

3.1

IQGeo Group plc Annual Report 202053

Directors’ report continued
Directors
The Directors serving at 31 December 2020 were as follows:
Paul Taylor
Riccardo (Richard) Petti
Haywood Chapman
Robert Sansom
Max Royde
Ian Kershaw
Andrew MacLeod

Board changes
Tim Gingell resigned as Chief Financial Officer on 25 September 2020 and was succeeded by Haywood Chapman, who was
appointed on the same day.

Directors’ interests – shares
Directors’ interests in the ordinary shares of IQGeo Group plc at 31 December 2020 were as follows:								2020								Number

2019
NumberPaul Taylor								255,562

191,459

Richard Petti								197,764

133,661

102,564—

Robert Sansom							 4,216,329

3,831,714

Ian Kershaw							38,2312,000

Andrew MacLeod 							64,103—

Haywood Chapman							Total								4,874,553 4,158,834
All Directors, excluding Max Royde,
participated in the 1 December 2020
placing, subscribing to a combined totalof 698,719 ordinary shares.
Max Royde has no direct interest in
the ordinary shares of IQGeo Groupplc but is a partner with the significant
shareholder Kestrel Partners. Kestrel
Partners also participated in the
1 December 2020 placing acquiring
1,666,667 ordinary shares.
There has been no change in the
Directors’ interests set out above
between 31 December 2020 and
22 March 2021 other than Ian Kershaw
acquiring 13,600 shares at a price of
102.94 pence on 18 January 2021.

Directors’ interests
Details of Directors’ remunerationand share options are provided in the
Remuneration Committee report on
pages 50 to 52. There are no loans
to or from the Directors.

Directors’ indemnity arrangements
The Group has made qualifying third
party indemnity provisions for the benefitof its Directors which were made during
the year and remain in force at the dateof this report.
The Group has purchased andmaintained throughout the year
Directors’ and Officers’ liability insurance
in respect of itself and its Directors.

54

Financial instruments

Dividends

Principal financial risks and mitigating
activities have been set out within thestrategic report. Additionally, note 26 to
the financial statements provides further
details in respect of credit risk, market risk
and liquidity risk.

The Directors do not recommend
payment of a dividend for the year
(2019: £nil).

Research and development
During the year, the Group has been
active in the development of software.
In the opinion of the Directors,
continuity of the investment in softwaredevelopment is essential for the long‑term
growth of the business. The Board
regularly reviews the IQGeo productroadmap to ensure its competitiveness.

AuditorA resolution to re-appoint Grant
Thornton UK LLP as the Group’s auditor
will be proposed at the forthcoming
Annual General Meeting. In accordancewith normal practice, the Directors will
be authorised to determine the auditor’s
remuneration.
Approved by the Board of Directors andsigned on behalf of the Board.

Going concern review
The Board has considered the going
concern position of the Group, which
is discussed further in note 3 to thefinancial statements.

Haywood Chapman
Chief Financial Officer
and Company Secretary

Post-balance sheet events

22 March 2021

On 29 December 2020, the Group enteredinto an agreement to sell its shares in
Abyssinian Topco Limited during January
2021 for a consideration of £2.5 million.
Full payment was received in January 2021
and the sale completed.

IQGeo Group plc
Registered number: 05589712

There are no other post‑balance sheet
events to report.

IQGeo Group plc Annual Report 2020

Corporate governanceDirectors’ responsibilities statement
The Directors are responsible forpreparing the Annual Report and thefinancial statements in accordance withapplicable law and regulations.
Company law requires the Directors
to prepare financial statements foreach financial year. Under that law
the Directors are required to prepare
the consolidated financial statementsin accordance with international
accounting standards in conformity withthe requirements of the Companies Act
2006 and have elected to prepare theparent company financial statementsin accordance with United Kingdom
Generally Accepted Accounting Practice(United Kingdom Accounting Standards
and applicable law, including FRS 102‘The Financial Reporting Standard’applicable in the UK and Republicof Ireland). Under company law the
Directors must not approve the financial
statements unless they give a true andfair view of the state of affairs and profit
or loss of the Company and Group forthat period. In preparing these financial
statements, the Directors are required to:• Select suitable accounting policies
and then apply them consistently• Make judgements and estimates thatare reasonable and prudent• State whether applicableinternational accounting standards inconformity with the requirements of
the Companies Act 2006 have been
followed, subject to any material
departures disclosed and explained in
the consolidated financial statements

The Directors are responsible for keeping
adequate accounting records thatare sufficient to show and explain the
Company’s transactions and disclosewith reasonable accuracy at any time thefinancial position of the Company andenable them to ensure that the financial
statements comply with the Companies
Act 2006. They are also responsible forsafeguarding the assets of the 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 informationof which the Company's auditor isunaware• The Directors have taken all the steps
they ought to have taken as Directors
in order to make themselves aware of
any relevant audit information and toestablish that the Company’s auditor
is aware of that information
The Directors are responsible forthe maintenance and integrity of thecorporate and financial information
included on the Company’s website.
Legislation in the United Kingdom
governing the preparation anddissemination of financial statements
may differ from legislation in otherjurisdictions.

• State whether applicable UK
Accounting Standards have been
followed, subject to any material
departures disclosed and explainedin the Company financial statements• Prepare the financial statements on
the going concern basis unless it isinappropriate to presume that theCompany will continue in business

IQGeo Group plc Annual Report 202055

Independent auditor’s reportto the members of IQGeo Group plc
OpinionOur opinion on the financial
statements is unmodified
We have audited the financial
statements of IQGeo Group plc(the ‘parent company’) and its
subsidiaries (the ‘group’) for theyear ended 31 December 2020,
which comprise the Consolidated income
statement, the Consolidated statement ofcomprehensive income, the Consolidated
statement of changes in equity, theConsolidated statement of financial
position, the Consolidated statement ofcash flows, the Company balance sheet,
the Company statement of changes
in equity and notes to the financial
statements, including a summaryof significant accounting policies.
The financial reporting framework thathas been applied in the preparation ofgroup financial statements is applicablelaw and international accounting
standards in conformity with therequirements of the Companies Act
2006. The financial reporting frameworkthat has been applied in the preparationof the parent company financial
statements is applicable law andUnited Kingdom Accounting Standards,
including Financial Reporting Standard
102 ‘The Financial Reporting Standard
applicable in the UK and Republic of
Ireland’ (United Kingdom Generally
Accepted Accounting Practice).

56

In our opinion:• the financial statements give a trueand fair view of the state of thegroup’s and of the parent company’s
affairs as at 31 December 2020 andof the group’s loss for the year thenended;• the group financial statements
have been properly prepared inaccordance with international
accounting standards in conformity
with the requirements of theCompanies Act 2006;• the parent company financial
statements have been properly
prepared in accordance with United
Kingdom Generally Accepted
Accounting Practice; and• the financial statements have been
prepared in accordance with therequirements of the Companies Act
2006.

Basis for opinion
We conducted our audit in accordancewith International Standards on
Auditing (UK) (ISAs (UK)) and applicablelaw. Our responsibilities under thosestandards are further described in the‘Auditor’s responsibilities for the auditof the financial statements’ section of ourreport. We are independent of the groupand the parent company in accordancewith the ethical requirements that are
relevant to our audit of the financial
statements in the UK, including the
FRC’s Ethical Standard as applied tolisted entities, and we have fulfilled
our other ethical responsibilities inaccordance with these requirements.
We believe that the audit evidence
we have obtained is sufficient andappropriate to provide a basis forour opinion.

Conclusions relating togoing concern
We are responsible for concluding on
the appropriateness of the directors’ useof the going concern basis of accounting
and, based on the audit evidence
obtained, whether a material uncertainty
exists related to events or conditions
that may cast significant doubt on thegroup’s and the parent company’s ability
to continue as a going concern. If weconclude that a material uncertainty
exists, we are required to draw attention
in our report to the related disclosuresin the financial statements or, if suchdisclosures are inadequate, to modify
the auditor’s opinion. Our conclusions
are based on the audit evidence
obtained up to the date of our report.
However, future events or conditions may
cause the group or the parent company
to cease to continue as a going concern.
A description of our evaluation ofmanagement’s assessment of theability to continue to adopt the going
concern basis of accounting, and the key
observations arising with respect to that
evaluation is included in the Key Audit
Matters section of our report.
Based on the work we have performed,
we have not identified any material
uncertainties relating to events
or conditions that, individually orcollectively, may cast significant doubt
on the group’s and 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.
In auditing the financial statements,
we have concluded that the directors’
use of the going concern basis ofaccounting in the preparation of thefinancial statements is appropriate.
The responsibilities of the directors withrespect to going concern are describedin the ‘Responsibilities of directors forthe financial statements’ section ofthis report.

IQGeo Group plc Annual Report 2020

Financial statements

Our approach to the audit

Overview of our audit approach
Overall materiality:
Group: £216,000, which represents approximately 5% of the group’s loss before taxation as assessedat planning stage.

Materiality

Parent company: £162,000, which is 0.5% of the parent company’s total assets capped at its
component materiality, being 75% of group materiality.

Key audit
matters

Key audit matters were identified as• improper recognition of revenue due to fraud (same as previous year); and• capitalisation of intangible development costs may not be appropriate (same as previous year);andScoping• carrying value of capitalised development costs may not be appropriate (same as previousyear);• valuation of acquired intangible assets (new);• going concern basis of accounting (new); and• recoverable value of amounts due from subsidiary undertakings (same as previous year)
All of the key audit matters that were identified in our auditor’s report for the year 31 December 2019
have been reported as key audit matters in our current year’s report except for the carrying value ofinvestment in subsidiary undertakings which was a key audit matter in 2019 and is not considered to
be in 2020.
We performed:• an audit of the financial information of the parent company IQGeo Group plc, IQGeo America
Inc. and IQGeo UK Limited using component materiality;• specific audit procedures on the financial statements were performed for IQGeo Solutions
Canada Inc and OSPInsight International Inc.; and• analytical procedures for all other components of the Group.

Key audit matters

Audit
Description
response
KAM
Disclosures

Key audit matters are those matters that, in our professional judgement, were of most significancein our audit of the financial statements of the current period and include the most significant
assessed risks of material misstatement (whether or not due to fraud) that we identified. These
matters included those that had the greatest effect on: the overall audit strategy; the allocationof resources in the audit; and directing the efforts of the engagement team. These matters wereaddressed 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.

Our results

In the graph below, we have presented the key audit matters, significant risks and other risks relevant to the audit.

High

Potential financial
statement impact

Revenuerecognition

Valuation of
acquiredintangible
assets

Key audit matter
Significant risk
Other risk

Capitalisation ofdevelopment costs may
not be appropriate

Carrying value ofcapitalised development
may not be appropriate

Trade
receivablesTradepayablesRecoverable valueof amounts due fromsubsidiary undertakings(parent company only)

Going
concern
Deferred andAccrued income

Management
override ofcontrols

Shareincentives

Low

Low

IQGeo Group plc Annual Report 2020

Extent of management judgement

High

57

Independent auditor’s report continued
to the members of IQGeo Group plc

Key audit matters continued
Key Audit Matter – GroupHow our scope addressed the matter – Group

Risk 1 Improper recognition of revenue due to fraud

In responding to the key audit matter we performed following
audit procedures:

We identified improper recognition of revenue as one of the mostsignificant assessed risks of material misstatement due to fraud.
Under International Standard on Auditing (UK) 240 ‘The Auditor’s
Responsibilities Relating to Fraud in an Audit of Financial
Statements’, there is a rebuttable presumed risk that revenue
may be misstated due to the improper recognition of revenue
due to fraud. There is a risk with regard to occurrence of revenue
recognised during the year and revenue not being recognised inaccordance with the group’s accounting policies.
The group has recognised revenues of £9.2m (2019: £7.8m).
The nature of the Group’s revenue includes sales of software,
maintenance and support, software subscription, labour andinstallation services.
IQGeo Group plc has continued its transition to a recurring software
subscription revenue model to increase its recurring revenue
streams. This has increased the amount of assessment required ofeach contract due to the different terms agreed and so increases theaudit risk. Subscription contracts are structured as a term software
licence sold together with maintenance and support. Each contract
requires assessment to ensure that each stream within the contract
is being recognised in accordance with IFRS 15.
The group’s revenue is material to the financial statements andcomprises multiple distinct performance obligations which adds
complexity to how revenue is recognised. Revenue recognition
is dependent upon identifying the relevant distinct performanceobligations, ensuring the revenue allocated to the performanceobligation is based on standalone pricing and appropriate
allocation of discount to ensure the correct revenue is recognised.

Relevant disclosures in the Annual Reportand Accounts 2020
The Group’s accounting policy on revenue recognition is set out innote 3 to the financial statements, critical accounting judgements
and key sources of estimation uncertainty are included in note 4
and related disclosures are included in note 5 Business information.

Risk 2 - Capitalisation of intangible development
costs may not be appropriate
We identified capitalisation of intangible development costs as oneof the most significant assessed risks of material misstatement due
to error.
During the year, the group capitalised £1.3m (2019: £1.1m) of
development costs in relation to various projects. In capitalisingthese costs, management makes judgments and assumptions
when assessing each project according to IAS 38 ‘Intangible Assets’recognition criteria. Judgement is required to determine whether
the recognition criteria are met, in particular, in respect of the
future economic benefit that will be generated and the intentionof the group to complete development. The level of judgement
involved leads to a risk that development costs may be capitalised
inappropriately.

Relevant disclosures in the Annual Reportand Accounts 2020
The Group’s accounting policy on research and development
expenditure is set out in note 3 to the financial statements, criticalaccounting judgements and key sources of estimation uncertainty
are included in note 4 and related disclosures are included in note 13
Intangible assets.

58•

assessing revenue recognition policies for consistency andcompliance with IFRS 15 ‘Revenue from Contracts with Customers’;•

performing analytical procedures, disaggregated by revenue
stream, entity and month, by identifying key movements andsignificant transactions which have occurred in the year andthen obtaining explanations and corroborating evidence forkey movements and significant transactions identified;•understanding the basis for pricing of revenue streams within
contracts and considering performance obligations to assess
whether revenue is being recognised in accordance with IFRS 15
and the contracts obtained and the allocation of discounts acrossperformance obligations;•for software revenue, agreeing a sample of revenue to either
customer confirmation of receipt of access to new licences,or purchase orders for renewal of licences;•

for maintenance and support revenue, obtaining a sample ofpurchase orders, recalculating revenue recognised and checking
to contract periods;•

for labour and installation services revenue, agreeing a sample
of revenue to signed contracts or purchase orders and tracing asample of time booked to revenue to timesheets, subcontractor
invoices or other supporting documentation;•

for subscription contracts, evaluating the standalone pricing
and recalculating the allocation of discounts across the distinct
performance obligations for a sample of revenue; and•for a sample of deferred and accrued income balances across all
revenue streams, recalculating revenue recognised and checking
to invoices and other supporting documentation.

Our results
Based on our audit work, we have not identified any material
misstatements in the occurrence of revenue recognised during theyear or any instances of revenue not being recognised in accordancewith stated accounting policies.

In responding to the key audit matter we performed the following
audit procedures:•assessing product development activities alongside thequalifying nature of the projects, including obtaining an
understanding from management of the details of projects
capitalised and challenging whether they relate to additional
functionality, enhancements or new product development, toensure that capitalisation is in accordance with the recognition
criteria under IAS 38;•

assessing managements’ intention to complete new projects
and the availability of resources to do this and corroborated
this to future revenue and cost forecasts;•

recalculating the mathematical accuracy of capitalisedamounts; and•agreeing amounts capitalised to supporting evidence
including timesheets.

Our results
Based on our audit work, we are satisfied that the judgements madeby management to capitalise development costs are appropriate.

IQGeo Group plc Annual Report 2020

Financial statements

Key Audit Matter – GroupHow our scope addressed the matter – Group

Risk 3 - Carrying value of capitalised development
costs may not be appropriate

In responding to the key audit matter we performed the following
audit procedures:

We identified the carrying value of capitalised development
costs as one of the most significant assessed risks of material
misstatement due to error.
There is a risk, given fast-moving technology, that developed
products could become obsolete and will not be supported by
future cash flows and hence capitalised development assets
may become impaired.
The net book value of capitalised development costs at theyear‑end amounted to £1.8m (2019: £1.5m), including amortisation
charged on capitalised development costs of £1.0m (2018: £0.8m).
Capitalised development costs are amortised by the group to
ensure the capitalised cost reflects the anticipated benefit of thedevelopment project to the Group over time. In accordance with
IAS 36 ‘Impairment of Assets’ the Group is required to assess at theend of each reporting period whether there are any indications that
assets may be impaired.
In order to assess whether there are any such indicators of
impairment, management have identified the contracted andrenewal revenues associated with each identifiable capitalised
project over a three-year forecast period.
There is an inherent uncertainty involved in forecastingand discounting future cash flows

Relevant disclosures in the Annual Reportand Accounts 2020•

assessing the amortisation policy applied to capitalised
development costs for, consistency with the approach appliedin the prior year and challenging the determination of the useful
economic life;•

comparing projects against which amounts are capitalised to netpresent value calculations prepared by management, based oncontractual and expected renewal revenue;•

assessing forecast income by agreeing amounts to subscription
agreements or maintenance and support renewal terms;•

challenging managements assumptions regarding future
revenue generation;•

performing additional sensitivity analysis relating to thevaluation of intangible assets, specifically around the discountrate; and•evaluating information in the net present value models including
forecasts and management product development intentions
to ensure it is consistent with our knowledge of the businessobtained through discussions with management.

Our results
Based on our audit work, we are satisfied that the assumptions
used in management’s assessment of the carrying value ofcapitalised development costs were appropriate.

The Group’s accounting policy on capitalised development valuationis set out in note 3 to the financial statements, critical accounting
judgements and key sources of estimation uncertainty are included
in note 4 and related disclosures are included in the Intangible
assets note.

Risk 4 – Valuation of acquired intangible assets
We identified valuation of acquired intangible assets as one of themost significant assessed risks of material misstatement due to error.
There is a risk that the fair value of intangible assets recognised aspart of the acquisition of OSPInsight International Inc. are misstatedas there is significant judgement and complexity in performing suchvaluations which are reliant on management forecasts of future
cash flows which are inherently subjective.
The separable intangibles recognition on acquisition are acquired
customer relationship of £2.1m, software of £0.5m and brands of£0.06m.

Relevant disclosures in the Annual Reportand Accounts 2020
The Group’s accounting policy on valuation of acquired intangibles
is set out in note 3 to the financial statements, critical accounting
judgements and key sources of estimation uncertainty are included
in note 4 and related disclosures are included in note 6 Acquisitions
and note 13 Intangible assets.

IQGeo Group plc Annual Report 2020

In responding to the key audit matter we performed the following
audit procedures:•

obtaining the valuation report prepared by management’s
expert supporting the recognition of intangible assets andagreeing to the disclosure in the financial statements;•

consulting with our internal valuation experts on the basis
and methodology adopted for the valuation models provided;•

checking the appropriateness of discount rates and growth rates
and source of management forecasts; and•assessing whether the disclosures made are in accordancewith IFRS 3.

Our results
Based on our audit work, we are satisfied that the assumptions
made in management’s valuation of separable intangibles arisingon the business combination are appropriate.

59Independent auditor’s report continued
to the members of IQGeo Group plc

Key audit matters continued
Key Audit Matter – GroupHow our scope addressed the matter – Group

Risk 5 - Going concern basis of accounting

In responding to the key audit matter we performed the following
audit procedures:

We identified the going concern basis of accounting as one of themost significant assessed risks of material misstatement due to fraud
and error as a result of the judgement required to conclude whether
there is material uncertainty related to going concern.
Covid-19 is amongst the most significant events currently faced on a
global basis, and at the date of this report, its effects are continuing
to have unprecedented levels of economic uncertainty which could
adversely impact the future trading performance of the group. This
global economic uncertainty increases the extent of judgement andestimation uncertainty associated with management’s assessment
to support the going concern basis of accounting in the preparationof the financial statements.

Relevant disclosures in the Annual Reportand Accounts 2020
The financial statements explain in note 3 the directors assessmentthat it is appropriate to adopt the going concern basis of accounting
in preparing the Group financial statements.

•

discussing with management their assessment of the going
concern basis of accounting, identifying key assumptions andevaluating supporting information, including budgets and cash
flow forecasts;•

challenging key assumptions in the forecasts, such as growth
rates and the scope of scenario planning and sensitivity analysis
performed by management given current economic conditions;•obtaining an understanding of financing agreements in place,management’s assessment of their adequacy and plans tomanage these;•

evaluating the stress testing performed to determine whencash would run out under management’s worse case scenario
modelling and also what conditions would have to arise for cash
to run out by March 2022; and•checking the disclosures concerning the basis of preparation of
the financial statements on a going concern basis for consistency
with the work undertaken and conclusions reached.

Our results
Based on our audit work, we are satisfied that the assumptions
made in management’s assessment of the use of the going concern
basis in preparation of financial statements were appropriate.

Key Audit Matter – Parent company

How our scope addressed the matter– Parent company

Risk 1 – Recoverable value of amounts due fromsubsidiary undertakings

In responding to the key audit matter we performed the following
audit procedures:

We identified the recoverable value of amounts due fromsubsidiary undertakings as one of the most significant assessed risks
of material misstatement due to error as a result of the management
judgement necessary to conclude whether a provision is required.

•obtaining an understanding of how management have evaluatedthe recoverable amounts of intercompany debtors through cash
settlement and net present value calculations;•challenging assumptions and inputs used in the models including
forecasts, growth rates and discount rates; and•assessing whether information included in the impairment
models is consistent with our knowledge of the business andother audit information obtained.

IQGeo Group plc has £24.7m (2019: £19.0m) due from subsidiary
undertakings. The subsidiaries are not all profit and cash generatingin the current year. There is a risk that amounts due from subsidiary
undertakings may not be recoverable.

Relevant disclosures in the Annual Reportand Accounts 2020
The parent company’s accounting policy for considering therecoverable value of amounts due from subsidiary undertakings
is set out in note 1 of the parent company financial statements aswell as the judgements and estimation uncertainty. and related
disclosures are in the note 6 Debtors of the parent company
financial statements.

60

Our results
Based on our audit work, we are satisfied that management’s
assessment of the recoverable value of amounts due from subsidiary
undertakings was appropriate.

IQGeo Group plc Annual Report 2020

Financial statements

Our application of materiality
We apply the concept of materiality both in planning and performing the audit, and in evaluating the effect of identified
misstatements on the audit and of uncorrected misstatements, if any, on the financial statements and in forming the opinion in theauditor’s report.
Materiality was determined as follows:

Materiality measure

Group

Materiality for financial
statements as a whole

We define materiality as the magnitude of misstatement in the financial statements that,
individually or in the aggregate, could reasonably be expected to influence the economic
decisions of the users of these financial statements. We use materiality in determining thenature, timing and extent of our audit work.

Materiality threshold£216,000 which is approximately 5% of thegroup’s loss before tax (’LBT’) as assessedat the planning stage of the audit fieldwork.

£162,000 which is 0.5% of the parent
company’s total assets capped at its
component materiality, being 75% ofgroup materiality.

Significant judgements made by auditor
in determining the materiality

In determining materiality, we madethe following significant judgements:

In determining materiality, we made thefollowing significant judgements:

The Group is a commercially focusedorganisation but generating an operatingloss. In the prior year we used loss before
tax as the underlying benchmark. LBT isalso a key performance measure forthe company and is therefore of mostinterest to stakeholders. We used 5% as
an appropriate benchmark percentage
as the group had only limited debt and thebusiness environment in which it operates
is relatively stable.

The parent company does not generate
trading revenues and holds investments
in subsidiaries. On this basis total
assets was considered to be themost appropriate benchmark.

Parent company

Materiality for the current year is lower
than the level that we determined for theyear ended 31 December 2020 to reflect thegroup’s lower levels of trading losses.

Materiality for the current year is lower
than the level that we determined for theyear ended 31 December 2020 to reflect thegroup’s lower levels of trading losses.

Significant revisions of materiality
threshold that were made as theaudit progressed

IQGeo Group plc Annual Report 2020

Our preliminary assessment of overallmateriality was based on the initial
31 December 2020 financial resultsreceived at the planning stage. We did
not revise materiality as actual financial
results were not substantially different fromthe initial period end financial results thatwere used initially to determine materiality
for the financial statements as a whole.
We concluded that it remained appropriate
to use materiality as determined in our risk
assessment at planning stage.

Our preliminary assessment of overallmateriality was based on the initial
31 December 2020 financial resultsreceived at the planning stage.
The materiality applied by the parent
company has been restricted to groupperformance materiality. We did not revise
materiality as actual financial results were
not substantially different from the initialperiod end financial results that wereused initially to determine materiality
for the financial statements as a whole.
We concluded that it remained appropriate
to use materiality as determined in our risk
assessment at planning stage.

61

Independent auditor’s report continued
to the members of IQGeo Group plc

Our application of materiality continued
Materiality measureGroup

Performance materiality used
to drive the extent of our testing

We set performance materiality at an amount less than materiality for the financial
statements as a whole to reduce to an appropriately low level the probability that theaggregate of uncorrected and undetected misstatements exceeds materiality for thefinancial statements as a whole.

Performance materiality threshold£162,000 which is 75% of financial
statement materiality.

£122,000 which is 75% of financial
statement materiality.

Significant judgements made by auditor in
determining the performance materiality

In determining materiality, significant
judgements applied included our previous
experience from auditing the financial
statements of the group – we noted few
misstatements in the prior year.

In determining materiality, significant
judgements included our previous
experience from auditing the financial
statements of the company – we noted
no misstatements in the prior year.

Specific materiality

We determine specific materiality for one or more particular classes of transactions, accountbalances or disclosures for which misstatements of lesser amounts than materiality for thefinancial statements as a whole could reasonably be expected to influence the economic
decisions of users taken on the basis of the financial statements.

Specific materiality

We determined a lower level of specificmateriality for directors' remuneration
and related party transactions due to theinherent sensitivity of these transactions
and related disclosures.

Communication of misstatements
to the audit committee

We determine a threshold for reporting unadjusted differences to the audit committee.

Threshold for communication£10,800 and misstatements below thatthreshold that, in our view, warrant
reporting on qualitative grounds.

62

Parent company

We determined a lower level of specificmateriality for directors' remuneration
and related party transactions due to theinherent sensitivity of these transactions
and related disclosures.

£8,100 and misstatements below thatthreshold that, in our view, warrant
reporting on qualitative grounds.

IQGeo Group plc Annual Report 2020

Financial statements

The graph below illustrates how performance materiality interacts with our overall materiality and the tolerance for potential
uncorrected misstatements.

Overall materiality – Group

Loss before tax at
the planning stage£4,321,000
Final loss before tax£4,426,000

Overall materiality – Parent company
PM£162,000
75%

Total assets at theplanning stage£36,056,000

FSM£216,000
5%FSM£162,0005% (capped
at 75% ofGroupmateriality)

Final total assets£36,348,000PM£122,000
75%

TFPUM£40,500
25%

TFPUM£53,750
25%
FSM: Financial statements materiality, PM: Performance materiality, TFPUM: Tolerance for potential uncorrected misstatements

An overview of the scope of ouraudit
We performed a risk-based audit that
requires an understanding of the group’s
and the parent company’s business andin particular matters related to:Understanding the Group,
its components, and theirenvironments, including group-wide
controls• The engagement team obtained anunderstanding of the Group and its
environment, including group-wide
controls, and assessed the risks ofmaterial misstatement at the grouplevel.
• IQGeo Group plc has centralised
processes and controls over the
key areas of audit focus. Groupmanagement are responsible forall judgemental processes andsignificant risk areas.

Identifying significant components• In assessing the risk of material
misstatement to the group financial
statements we assessed thesignificance of each component
and determined the planned audit
response based on a measureof materiality. Significance wasdetermined with regard to the group's
total assets, revenues and earnings
before taxation.

IQGeo Group plc Annual Report 2020

Type of work to be performed on
financial information of parent andother components• We performed an audit of the parent
company IQGeo Group plc focussing
on the key audit matter using parent
company materiality• We performed audits of the financial
information of the component
using component materiality were
performed on the following entities
in the Group: IQGeo UK Limited and
IQGeo America Inc;
• Specified audit procedures
were performed on the financial
information of the following
components: IQGeo Solutions Canada
Inc and OSPInsight International Inc;
• Analytical procedures were
performed for all other components
including IQGeo Germany GmbH and
IQGeo Japan K.K;
• The total percentage coverage offull-scope audit and specified audit
procedures over the Group’s revenue
was 100%;• The total percentage coverage offull scope audit and specified audit
procedures over the Group’s total
assets was 96%; and• Our audit approach in the current
year is consistent with the audit
approach adopted for the year ended
31 December 2019 being substantive
in nature.

Other information
The directors are responsible for theother information. The other information
comprises the information included in theannual report, other than the financial
statements and our auditor’s report
thereon. Our opinion on the financial
statements does not cover the otherinformation and, except to the extent
otherwise explicitly stated in our report,
we do not express any form of assurance
conclusion thereon.
In connection with our audit of thefinancial statements, our responsibility
is to read the other information and, in
doing so, consider whether the otherinformation is materially inconsistent
with the financial statements or our
knowledge obtained in the audit orotherwise appears to be materially
misstated. If we identify such materialinconsistencies or apparent material
misstatements, we are required todetermine whether there is a material
misstatement in the financial statements
or a material misstatement of the otherinformation. If, based on the work wehave performed, we conclude that there
is a material misstatement of this otherinformation, we are required to reportthat fact.
We have nothing to report in this regard.

63

Independent auditor’s report continued
to the members of IQGeo Group plc

Our opinion on other mattersprescribed by the Companies
Act 2006 is unmodified
In our opinion, based on the work
undertaken in the course of the audit:• the information given in the strategic
report and the directors’ reportfor the financial year for which thefinancial statements are preparedis consistent with the financial
statements; and• the strategic report and the
directors’ report have been preparedin accordance with applicable legal
requirements.

Matter on which we are required
to report under the Companies
Act 2006
In the light of the knowledge andunderstanding of the group and theparent company and its environment
obtained in the course of the audit,
we have not identified material
misstatements in the strategic reportor the directors’ report.

Matters on which we are required
to report by exception
We have nothing to report in respect of
the following matters in relation to which
the Companies Act 2006 requires us toreport to you if, in our opinion:• adequate accounting records
have not been kept by the parent
company, or returns adequate forour audit have not been received frombranches not visited by us; or• the parent company financial
statements are not in agreementwith the accounting records andreturns; or• certain disclosures of directors’
remuneration specified by law
are not made; or• we have not received all theinformation and explanations
we require for our audit.

64

Responsibilities of directors forthe financial statements
As explained more fully in the directors’
responsibilities statement, the directors
are responsible for the preparation of
the financial statements and for being
satisfied that they give a true and fairview, and for such internal control as
the directors determine is necessary
to enable the preparation of financial
statements that are free from material
misstatement, whether due to fraud
or error.
In preparing the financial statements,
the directors are responsible forassessing the group’s and the parent
company’s ability to continue as agoing concern, disclosing, as applicable,
matters related to going concern
and using the going concern basis ofaccounting unless the directors either
intend to liquidate the group or the parent
company or to cease operations, or haveno realistic alternative but to do so.

Auditor’s responsibilities for theaudit of the financial statements
Our objectives are to obtain reasonableassurance about whether the financial
statements as a whole are free frommaterial misstatement, whether due tofraud or error, and to issue an auditor’sreport that includes our opinion.
Reasonable assurance is a high levelof assurance but is not a guaranteethat an audit conducted in accordancewith ISAs (UK) will always detect amaterial 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 decisionsof users taken on the basis of thesefinancial statements.
A further description of our
responsibilities for the audit of thefinancial statements is located on the
Financial Reporting Council’s website at:www.frc.org.uk/auditorsresponsibilities.
This description forms part of ourauditor’s report.

Explanation as to what extent
the audit was considered capableof detecting irregularities,
including fraud
Irregularities, including fraud, areinstances of non-compliance with laws
and regulations. We design proceduresin line with our responsibilities, outlined
above, to detect material misstatements
in respect of irregularities, including
fraud. Owing to the inherent limitationsof an audit, there is an unavoidable
risk that material misstatements inthe financial statements may not be
detected, even though the audit isproperly planned and performed inaccordance with the ISAs (UK).
The extent to which our procedures
are capable of detecting irregularities,
including fraud is detailed below:• We obtained an understanding of thelegal and regulatory frameworks thatare applicable to the Company anddetermined that the most significant
are those that relate to the reporting
frameworks (IFRS, Companies Act
2006 and AIM rules) and the relevant
tax compliance regulations in thejurisdictions in which the company
operates. We did not identify any
matters relating to non-compliancewith laws and regulations or relating
to fraud.
• We made enquiries of management
and the audit committee concerning
the Group’s policies and procedures
relating to:• the identification, evaluationand compliance with laws andregulations;• the detection and response to therisks of fraud; and• the establishment of internal
controls to mitigate risks related to
fraud or non-compliance with laws
and regulations.
We corroborated our inquiries
through our reading of board meeting
minutes;

IQGeo Group plc Annual Report 2020

Financial statements• We assessed the susceptibility of
the group’s financial statements tomaterial misstatement, including
how fraud might occur, by evaluating
management’s incentives andopportunities for manipulation of thefinancial statements. This included theevaluation of the risk of management
override of controls. We determinedthat the principal risks were in
relation to:• journal entries that increased
revenues or that reclassified costs
from the income statement to thebalance sheet; and• potential management bias indetermining accounting estimates,
especially in relation to valuationof acquired intangibles.
• Our audit procedures involved:• gaining an understanding of theentity’s operations, including thenature of its revenue sources,
products and services and of
its objectives and strategies
to understand the classes oftransactions, account balances,
expected financial statement
disclosures and business risks
that may result in risks of material
misstatement;• assessing the design effectivenessof controls management has inplace to prevent and detect fraud
and the adequacy of procedures
for authorisation of transactions
and internal review procedures;• challenging assumptions
and judgements made bymanagement where significant
accounting estimates;• In addition, we completed audit
procedures to conclude on thecompliance of disclosures in theannual report and accounts withapplicable financial reporting
requirements;• These audit procedures were
designed to provide reasonableassurance that the financial
statements were free fromfraud or error. However, detecting
irregularities that result fromfraud is inherently more difficult
than detecting those that result
from error, as those irregularities
that result from fraud may
involve collusion, deliberateconcealment, forgery or intention
misrepresentations. Also, the further
removed non-compliance with laws
and regulations is from events andtransactions reflected in the financial
statements, the less likely we would
become aware of it;• Assessment of the appropriatenessof the collective competence andcapabilities of the engagement
team included consideration of
the engagement team’s

Use of our report
This report is made solely to thecompany’s members, as a body, in
accordance with Chapter 3 of Part 16of the Companies Act 2006. Our audit
work has been undertaken so that wemight state to the company’s members
those matters we are required to state
to them in an auditor’s report and forno other purpose. To the fullest extent
permitted by law, we do not accept orassume responsibility to anyone otherthan the company and the company’s
members as a body, for our audit work,for this report, or for the opinions wehave formed.

Alison Seekings
Senior Statutory Auditor
for and on behalf of Grant Thornton
UK LLP
Statutory Auditor, Chartered Accountants
Cambridge
22 March 2021

• understanding of, andpractical experience withaudit engagements of a similar
nature and complexity throughappropriate training andparticipation;• knowledge of the industry inwhich the client operates; and• understanding the legal andregulatory requirements specificto the entity.

• utilising a valuation specialist to
assist in the audit of management’s
valuation of acquired intangibles;and• journal entry testing, with a focus
on material manual journals,
including those with unusual
account combinations.

IQGeo Group plc Annual Report 202065

Consolidated income statement
for the year ended 31 December 2020								2020							
Notes
£’000

Revenue							
5

2019
£’000

9,155

7,806

Cost of revenues								(4,409)(4,563)Gross profit								
4,746

3,243

Operating expenses								(9,074)(9,539)Operating loss								(4,328)(6,296)

Analysed as:		Gross profit								
4,746

3,243

Other operating expenses								(7,241)(8,091)

Adjusted EBITDA								(2,495)(4,848)

(369)

(285)

(1,002)(815)

Share option expense								
(130)

(102)

Depreciation							14,15Amortisation of other intangible assets							

13Unrealised foreign exchange losses on intercompany trading balances					

(43)

(110)

Non-recurring items							
10

(289)

(136)

Operating loss								(4,328)(6,296)

Finance income							
9

7

72

Finance costs							
9

(105)

(10)

Loss before tax								(4,426)(6,234)315

64

Loss from continuing operations								(4,111)(6,170)

Income tax 							11Profit from discontinued operations							7Loss for the year—403							
(4,111)(5,767)

Loss per share - continuing operations		
Basic							12(8.2p)(9.4p)

Diluted							12(8.2p)(9.4p)

66

IQGeo Group plc Annual Report 2020

Financial statements

Consolidated statement of comprehensive income
for the year ended 31 December 2020								2020								
£’000

2019
£’000

Loss from continued operations								(4,111)(6,170)

Profit from discontinued operations								—

403Loss for the year								(4,111)(5,767)

Other comprehensive income:		
Items that may be reclassified subsequently to profit and loss		
Exchange difference on retranslation of net assets and results of overseas
subsidiaries from continuing operations								
80

5Items that will not be reclassified to profit and loss		
500—

Total comprehensive loss for the year								(3,531)(5,762)

Changes in the fair value of equity investments at fair value through other comprehensive income			

IQGeo Group plc Annual Report 202067

Consolidated statement of changes in equity
for the year ended 31 December 2020

				Share				 based
Capital
		
Share
Share
payment redemption
		 capital
premium
reserve
reserve		£’000
£’000
£’000
£’000

Balance at 1 January 2019

Mergerreliefreserve£’000

Translation
reserve£’000

Retainedearnings
£’000

Total
£’000

1,462

46,375717——(1,871)(14,411)32,272

Loss for the year		—

—

—

—

—

—

(5,767)(5,767)—

Exchange difference on retranslation of net
assets and results of overseas subsidiaries		

—

—

—

—

5

—

5

Total comprehensive loss for the year

—

—

—		—

5

(5,767)(5,762)

Capital reduction		—(28,948)

—

—

—

—

28,948—

Repurchase and cancellation of shares		

(476)

—

—

476

—

—

(10,950)(10,950)

Exercise of share options		

4

27

(6)

—

—

—

6

31

Lapse of share options		—

—

(60)

—

—

—

60

—

Reserve debit for equity-settled
share-based payment		—

—

(19)

—

—

—

—

(19)

Transactions with owners		

(472)(28,921)

(85)

476

—

—

18,064(10,938)

Balance at 31 December 2019		

990

17,454

632

476

—

(1,866)(2,114)

15,572

Loss for the year		—

—

—

—

—

—

(4,111)(4,111)

Exchange difference on retranslation of net
assets and results of overseas subsidiaries		

—

—

—

—

80

—

80

—

Other comprehensive income		—

—

—

—

—

—

500

500

Total comprehensive loss for the year		—

—

—

—

—

80

(3,611)(3,531)

5,030

—

—

—

—

—

5,166

Issue of shares – fundraise, net of costs		

136

Issue of shares – acquisition		

18

—

—

—

739

—

—

757

Exercise of share options		

2

10

(3)

—

—

—

3

12

Lapse of share options		—

—

(569)

—

—

—

569

—

Equity-settled share-based payment		—

—

130

—

—

—

—

130

Transactions with owners		

156

5,040

(442)

—

739

—

572

6,065

Balance at 31 December 2020		

1,146

22,494

190

476

739

(1,786)(5,153)

18,10668

IQGeo Group plc Annual Report 2020

Financial statements

Consolidated statement of financial position
for the year ended 31 December 2020								2020							
Notes
£’000

2019
£’000

Assets			Intangible assets							
13

8,902

1,596
86

14

167

Right‑of‑use assets							
15

1,567

73

Investments							
16

—

2,000

Total non-current assets								10,636

3,755

Property, plant and equipment							Current assets			
2,850

2,353

Corporation tax receivable								
413

16Trade and other receivables							

17Asset held for sale							

16

2,500

—

Cash and cash equivalents							

1811,07813,053

Total current assets								16,841

15,422

Total assets 								27,477

19,177

Liabilities 			Current liabilities			19(5,828)(3,241)

Bank loans payable							
20

(167)

—

Lease obligation							
21

(208)

(79)

Total current liabilities								(6,203)(3,320)Trade and other payables							Non-current liabilities			Deferred income tax liabilities 							

11

(351)

(285)

Trade and other payables							

6

(746)

—

Bank loans							
20

(433)

—

Lease obligation							
21(1,638)—

Total non-current liabilities								(3,168)(285)

Total liabilities								(9,371)(3,605)

Net assets								18,106

15,572Equity attributable to owners of the Company			Ordinary share capital							
22

1,146

990

Share premium 							
2222,494

17,454

Share‑based payment reserve								
190

632

Capital redemption reserve								
476

476

Merger relief reserve								739

—Translation reserve								(1,786)(1,866)

Retained earnings								(5,153)(2,114)Equity attributable to shareholders of the Company							18,106

15,572

The financial statements were approved and authorised for issue by the Board of Directors on 22 March 2021 and signed on its
behalf by:

Richard Petti		

Haywood Chapman

Chief Executive Officer

Chief Financial Officer

IQGeo Group plc
Registered Number: 05589712

IQGeo Group plc Annual Report 202069

Consolidated statement of cash flows
for the year ended 31 December 2020								2020							
Notes
£’000

2019
£’000

Operating activities			
Loss before tax from continuing operations 							(4,426)

Gain/(loss) before tax from discontinued operations							

—

161Loss before tax								(4,426)(6,073)(6,234)

Adjustments for:			
Depreciation							
14,15

369

285

Amortisation							
13

1,002

815

Unrealised foreign exchange losses on intercompany trading balances					

43

110

Share-based payment charge								
130

(19)

Finance income							
9

(7)

(72)

Finance costs							
9

105

10

Operating cash flows before working capital movement						(2,784)(4,944)

Change in receivables								
190

388

Change in payables								
295

(10)

(2,299)(4,566)

Cash generated from operations before tax							Net income taxes received/(paid)								
(17)

(124)

Net cash flows from operating activities								(2,316)(4,690)Cash flows from investing activities

		
(165)

(56)

Expenditure on intangible assets								(1,307)(1,176)

Purchases of property, plant and equipment							Cash received on sale of the RTLS SmartSpace business unit						

—

1,060

Disposal costs in relation to the RTLS SmartSpace business unit						

—(1,839)Acquisition of subsidiaries, net of cash acquired							(3,990)—Interest received								7

72Net cash flows from investing activities								(5,455)(1,939)Cash flows from financing activities									

662—

Interest paid							

—

(2)Payment of lease liability								
(78)

(238)

Repurchase of ordinary share capital								

—(10,950)

Proceeds from the issue of ordinary share capital							

5,178

31

Net cash flows from financing activities								5,762(11,159)

Net increase in cash and cash equivalents							(2,009)(17,788)

Cash and cash equivalents at start of period							13,05330,915

Exchange differences on cash and cash equivalents							

34

(74)

Cash and cash equivalents at end of period						
1811,07813,053

Borrowings

70

IQGeo Group plc Annual Report 2020

Financial statements

Notes to the consolidated financial statements
for the year ended 31 December 2020
1 General information

2 New accounting standards

IQGeo Group plc (“the Company”)
and its subsidiaries (together, “theGroup”) delivers geospatial software
solutions that integrate data from any
source – geographic, real-time asset,
GPS, location, corporate and external
cloud‑based sources – into a live
geospatial common operating picture,empowering all users in the customer’sorganisation to access, input and analyse
operational intelligence to proactively
manage their networks, respond quickly
to emergency events and effectively
manage day-to-day operations.

The consolidated financial statements
are prepared in accordance withinternational accounting standards inconformity with the requirements of theCompanies Act 2006.

The Company is a public limited
company which is listed on the
Alternative Investment Market (“AIM”)
of the London Stock Exchange (IQG)
and is incorporated and domiciledin the United Kingdom. The value of
IQGeo Group plc shares, as quoted
on the London Stock Exchange at
31 December 2020, was 96.0 pence pershare (31 December 2019: 57.5 pence).

The accounting policies used are thesame as set out in detail in the Annual
Report and Accounts 2019 and havebeen applied consistently to all periods
presented in the financial statements.
There were no new standards oramendments or interpretations toexisting standards that became
effective during the year that werematerial to the Group.
No new standards, amendments orinterpretations to existing standards
having an impact on the financial
statements that have been publishedand that are mandatory for the Group’s
accounting periods beginning on or
before 1 January 2021, or later periods,
have been adopted early.

The Company was incorporated
as Ubisense Trading Limited on
11 October 2005 and changed its nameto Ubisense Group plc on 31 May 2011ahead of its initial public offering andlisting on AIM on 22 June 2011. Following
the sale of its RTLS SmartSpace business
unit the Company changed its name to
IQGeo Group plc on 2 January 2019 with
its subsidiaries also changing name to
IQGeo. The address of its registeredoffice is Nine Hills Road, Cambridge,
United Kingdom, CB2 1GE.

Standards and interpretations not
yet applied by the GroupThe Group has its operations in the UK,
USA, Canada, Germany and Japan, andsells its products and services in North
America, Japan, UK and Europe. The
Group legally consists of six subsidiarycompanies headed by IQGeo Group plc.

• References to the Conceptual
Framework

The consolidated financial statements
have been approved for issue by the
Board of Directors on 22 March 2021.

The following new Standards andInterpretations, which are yet to become
mandatory and have not been applied in
the Group’s financial statements, are notexpected to have a material impact on
the Group’s financial statements.
• IFRS17 Insurance contracts• Amendments to IFRS 17 Insurance
Contracts (Amendments to IFRS 17
and IFRS 4)• Proceeds before Intended Use(Amendments to IAS 16)• Onerous Contracts – Cost of Fulfillinga Contract (Amendments to IAS 37)• Annual Improvements to IFRSStandards 2018-2020 Cycle(Amendments to IFRS 1, IFRS 9,IFRS 16, IAS 41)• Classification of Liabilities as Current
or Non-current (Amendments to IAS 1)
These amendments are not expected tohave a significant impact on the financial
statements in the period of initial
application and therefore the disclosures
have not been made.

IQGeo Group plc Annual Report 2020

3 Summary of significant
accounting policies
The principal accounting policies appliedin the preparation of the consolidated
financial statements are set out below.
These policies have been consistently
applied to all the years presented, unlessotherwise stated.

Basis of preparation
The consolidated financial statementsof IQGeo Group plc are preparedin accordance with international
accounting standards in conformity
with the requirements of the Companies
Act 2006 (‘IFRS’). The consolidated
financial statements have been prepared
under the historical cost convention.
The consolidated financial statements
are presented in GBP and all values arerounded to the nearest thousand pounds(£’000) except when otherwise indicated.
The preparation of these financial
statements in conformity with IFRS
requires the Directors to make certain
critical accounting estimates andjudgements that affect the amounts
reported in the financial statements andaccompanying notes. The areas involving
a higher degree of judgement orcomplexity, or areas where assumptions
and estimates are significant to theconsolidated financial statements,
are disclosed in note 4.

Going concern basis
In determining the basis for preparing
the consolidated financial statements,
the Directors are required to consider
whether the Company can continue
in operational existence for theforeseeable future, being a period of
not less than twelve months from thedate of the approval of the consolidated
financial statements.
Management prepares detailed cash
flow forecasts which are reviewed by the
Board on a regular basis. The forecasts
include assumptions regarding theopportunity funnel from both existingand new clients, growth plans, risks
and mitigating actions. In particular,
operating cash flow and profitability
are highly sensitive to revenue mix andthe positive contribution of continuing
growth in software sales whether on aperpetual licence or subscription basis.

71Notes to the consolidated financial statements continued

for the year ended 31 December 2020
3 Summary of significant
accounting policies continued
Going concern basis continued

Foreign currencies
a. Functional and presentation
currency

In reaching their going concern
conclusion, the Directors haveconsidered that the Group had cash of£11.1 million, with £0.6 million bank debt
as at 31 December 2020 and sufficientworking capital to continue operations.
Additionally, in January 2021, IQGeo
received an additional £2.5 million on
disposal of its rollover investment of the
Ubisense business.

The functional currency of each Group
entity is the currency of the primaryeconomic environment in which each
entity operates. The consolidated
financial statements are presented
in GBP.

The Group’s forecasts and projections,taking account of reasonably possible
changes in trading performance, support
the conclusion that there is a reasonable
expectation that the Company and theGroup have adequate resources tocontinue in operational existence forthe foreseeable future, a period of notless than twelve months from the dateof this report. The Group, therefore,
continues to adopt the going concern
basis in preparing the consolidated
financial statements.

Consolidation
The Group financial statements include
the results, financial position and cash
flows of the Company and all of its
subsidiary undertakings. Subsidiary
undertakings are those entities controlled
directly or indirectly by the Company.
Control arises when the Company has
the power to govern the financial andoperating policies of an entity, uses thispower to affect the returns from that
entity and has exposure to variable
returns from its investment in the entity.
Financial statements of the subsidiaries
are prepared for the same reporting
year as the Company, using consistentaccounting policies. Businesses acquiredor disposed during the year are
accounted for using acquisition method
principles from, or up to, the date
control passed. Intra-group transactions
and balances are eliminated on
consolidation. All subsidiaries use
uniform accounting policies for liketransactions and other events andsimilar circumstances.
Non-controlling interests in the net
assets of consolidated subsidiaries are
identified separately from the Group’s
equity therein. Non-controlling interests
consist of the amount of those interests
at the date of the original businesscombination and the non-controllinginterest’s share of changes in equity
since the date of combination.

72

b. Transactions and balances
Foreign currency transactions
are translated into the functional
currency of each Group entity using
the exchange rates prevailing at thedates of transactions. Monetary assets
and liabilities denominated in foreign
currencies are translated at rates
ruling at the period end date. Suchexchange differences are included in the
consolidated income statement within“operating expenses”. Non-monetary
items that are measured in terms ofhistorical cost in a foreign currency aretranslated using the exchange rates as at
the dates of the initial transactions.

c. Consolidation
For the purpose of presenting
consolidated financial statements, theresults and financial position of all theGroup entities (none of which have thecurrency of a hyperinflationary economy)
that have a functional currency
other than GBP are translated into
GBP as follows:• assets and liabilities for eachstatement of financial position aretranslated at the exchange rate at
the period end date;• income and expenses for each
income statement are translated
at the exchange rate ruling at thetime of each period the transaction
occurred; and• all resulting exchange differences
are recognised in othercomprehensive income.

Business reporting

The internal management accounting
information is prepared on an IFRS basis
but has non-GAAP “Adjusted EBITDA” as
the primary measure of profit and this isreported on the face of the consolidated
income statement.

Revenue recognition
Revenue represents the fair value ofconsideration received or receivablefor the sales of goods and services netof discounts and sales taxes. Revenue
is recognised based on the distinct
performance obligations under the
relevant customer contract as set out
below. Where goods and/or services are
sold in a bundled transaction or on a
subscription basis, the Group allocates thetotal consideration under the contract tothe different individual elements based on
actual amounts charged by the Group ona standalone basis.

Software
Revenue earned from software sales
under perpetual licence agreements withmaintenance and support is recognised
when the software is made available tothe customer for use.
If contracts include performanceobligations which result in software
being customised or altered, thesoftware cannot be considered distinct
from the labour service. Revenue
recognition is dependent on the contract
terms and assessment of whether the
performance obligation is satisfied
over time. If the conditions of IFRS15 torecognise revenue over time are notsatisfied, revenue is deferred until thesoftware is available for customer use.

Maintenance and support
Maintenance and support isrecognised on a straight-line basis
over the term of the contract, which
is typically one year. Revenue notrecognised in the consolidated income
statement is classified as deferred
revenue on the consolidated statementof financial position.

IFRS 8 requires a “management
approach” under which information in
the financial statements is presented on
the same basis as that used for internalmanagement reporting purposes.
The Group is organised on a global basis.
The Directors believe that the Chief
Operating Decision Maker (CODM) is
the Chief Executive Officer of the Group.
The CODM and the rest of the Board
are provided with information as asingle business unit to assess its financial
performance.

IQGeo Group plc Annual Report 2020

Financial statements

Subscription
Software sold on a non perpetual basis
consists of two performance obligations:a licence obligation for the temporary
right to use the software and a postcontract customer support obligation
for the right to receive updates,
enhancements, error corrections andsupport throughout the contracted
term. The customer obtains the rightto use the software once the licencehas been delivered and the licence
period starts. Revenue for the licenceobligation is recognised at the point
in time when the licence is delivered,
whereas the maintenance and support
obligation is satisfied over time andthe associated revenue recognised ona straight-line basis over the term of
the contract. Revenue not recognisedin the consolidated income statement
is classified as deferred revenue
in the consolidated statement offinancial position.

Services
Services revenue includes consultancy
and training. Services revenue from timeand materials contracts is recognised in
the period that the services are provided
on the basis of time worked at agreed
contractual rates and as direct expenses
are incurred.
Revenue from fixed price, long-term
customer specific contracts is recognisedover time following assessment of thestage of completion of each assignment
at the period end date comparedto the total estimated service to beprovided over the entire contract
where the outcome can be estimatedreliably. If a contract outcome cannot
be estimated reliably, revenues arerecognised equal to costs incurred,to the extent that costs are expected
to be recovered. An expected loss on
a contract is recognised immediately
in the consolidated income statement.

Timing of payment
Maintenance and support income andsubscription income is invoiced annuallyin advance at the commencement of
the contract period. Other revenue isinvoiced based on the contract termsin accordance with performanceobligations. Amounts recoverable incontracts (contract assets) relate to ourconditional right to consideration forcompleted performance obligations
under the contract prior to invoicing.
Deferred income (contract liabilities)
relates to amounts invoiced in advanceof services performed under thecontract.

IQGeo Group plc Annual Report 2020

Employee benefits
a. Retirement benefits
The Group operates various defined
contribution pension arrangements for
its employees.
For defined contribution pension
arrangements, the amount charged
to the consolidated income statement
represents the contributions payablein the period. Differences between
contributions payable in the period
and contributions actually paid
are shown as either accruals or
prepayments in the consolidated
statement of financial position.

b. Share-based payments
The Group issues equity-settled
share-based payments to certain
employees. Vesting conditions arecontinuing employment and can include,for senior employees, a diluted EPS
performance target or share pricetarget. Equity‑settled share-based
payments are measured at fair value atthe date of grant using an appropriate
pricing model. The fair value is expensed
on a straight-line basis over the vesting
period, together with a corresponding
increase in equity in the share-based
payment reserve. Non market vesting
conditions include assumptions about the
number of options expected to vest.

Non-recurring items
Non-recurring items are disclosed
separately in the financial statements
where it is necessary to do so to provide
further understanding of the financial
performance of the Group. They arematerial one-off items of income
or expense that have been shown
separately due to the significanceof their nature or amount and do
not reflect the ongoing cost base orrevenue‑generating ability of the Group.

Interest income and expense
Interest income and expense is includedin the consolidated income statement on
a time basis, using the effective interest
method by reference to the principal
outstanding.

Tax
The tax charge or credit comprises
current tax payable and deferred tax:

a. Current tax
The current tax charge represents anestimate of the amounts payable orreceivable to or from tax authorities inrespect of the Group’s taxable profits
and is based on an interpretation ofexisting tax laws. Taxable profit differsfrom profit before tax as reported in the
consolidated income statement because
it excludes certain items of income andexpense that are taxable or deductible
in other years or are never taxable
or deductible. Taxation received isrecognised only when it is probable that
the Group is entitled to the asset.

b. Deferred tax
Deferred income taxes are calculatedusing the liability method on temporary
differences. This involves the comparisonof the carrying amounts of assets andliabilities in the consolidated financial
statements with their respective tax
bases. In addition, tax losses available
to be carried forward as well as otherincome tax credits to the Group areassessed for recognition as deferred
tax assets. However, deferred tax is notprovided on the initial recognition of
goodwill, nor on the initial recognitionof an asset or liability, unless the relatedtransaction is a business combination oraffects tax or accounting profit.
Deferred tax liabilities are always
provided in full. Deferred tax assets
are recognised to the extent that it isprobable that the underlying deductible
temporary differences will be able to
be offset against future taxable income.
Deferred tax assets and liabilities arecalculated, without discounting, at tax
rates that are expected to apply to theirrespective period of realisation, provided
they are enacted or substantively
enacted at the reporting date. Deferred
tax is recognised as a component oftax expense in the consolidated income
statement, except where it relates toitems charged or credited directly
to other comprehensive income orequity when it is recognised in othercomprehensive income or equity.

73Notes to the consolidated financial statements continued

for the year ended 31 December 2020
3 Summary of significant
accounting policies continued
Business combinations
The Group applies the acquisition method
to account for business combinations.
The consideration transferred for theacquisition of a subsidiary is the fairvalues of the assets transferred, theliabilities incurred to the former ownersof the acquiree and the equity interests
issued by the Group. The considerationtransferred includes the fair value of
any asset or liability resulting from acontingent consideration arrangement.
Identifiable assets acquired andliabilities and contingent liabilities
assumed in a business combination aremeasured initially at their provisional
fair values at the acquisition date.
Fair values are reassessed during themeasurement period and updated if
required. The Group recognises any
non‑controlling interest in the acquiree onan acquisition‑by-acquisition basis, either
at fair value or at the non-controllinginterest’s proportionate share of therecognised amounts of the acquiree’s
identifiable net assets.
If the business combination is achievedin stages, the acquisition date fair valueof the acquirer’s previously held equity
interest in the acquiree is remeasured tofair value at the acquisition date throughprofit or loss.
Any contingent consideration to betransferred by the Group is recognised
at fair value at the acquisition date.
Subsequent changes to the fair valueof the contingent consideration thatis deemed to be an asset or liability isrecognised in accordance with IFRS 9
in the consolidated income statement.
Contingent consideration that is classified
as equity is not remeasured and its
subsequent settlement is accounted forwithin equity.

Goodwill
Goodwill is initially measured as
the excess of the aggregate of theconsideration transferred and the fairvalue of non-controlling interest overthe net identifiable assets acquired andliabilities assumed. If this consideration islower than the fair value of the net assetsof the subsidiary acquired, the difference
is recognised in profit or loss.
Goodwill arising on an acquisition of abusiness is the difference between the fairvalue of the consideration paid and the
net fair value of the assets and liabilities
acquired. Goodwill is carried at cost lessaccumulated impairment losses.

74

Research and development
Expenditure on research activities isrecognised as an expense in the period inwhich it is incurred.
Development activities involve a planor design for the production of new or
substantially improved products andprocesses. Development expenditureis only capitalised if all of the following
conditions are met:
• completion of the intangible asset istechnically feasible so that it will beavailable for use or sale;• the Group intends to complete theintangible asset and use or sell it;• the Group has the ability to use or sell
the intangible asset;• the intangible asset will generate
probable future economic benefits.
Among other things, this requiresthat there is a market for the output
from the intangible asset or for theintangible asset itself, or, if it is to be
used internally, the asset will be used ingenerating such benefits;• there are adequate technical, financial
and other resources to complete thedevelopment and to use or sell theintangible asset; and• the expenditure attributable tothe intangible asset during its
development can be measured
reliably.
Internally generated intangible assets,consisting mainly of direct labour costs,
are amortised on a straight‑line basis overtheir useful economic lives. Amortisationis shown within administrative expenses
in the consolidated income statement.
The estimated useful lives of current
development projects are three years.
Upon completion the assets are subject
to impairment testing if impairment
triggers are identified, based on
expected future sales.
Where no internally generated intangible
asset can be recognised, development
expenditure is recognised as an expensein the period in which it is incurred.

Other intangible assets
Intangible assets that are purchased
separately, such as software licencesthat do not form an integral part ofrelated hardware, are capitalised atcost and amortised on a straight-line
basis over their useful economic life
which is typically 3 years.
Customer relationships acquired following
a business combination are amortised
on a straight-line basis over their useful
economic life which is 10 years.

Brands acquired following a businesscombination are amortised on astraight‑line basis over their useful
economic life which is 2 years.
Acquired software recognised following
a business combination is amortised ona straight-line basis over their useful
economic life which is 3 years.

Property, plant and equipment
Property, plant and equipment are statedat cost less accumulated depreciation
and any recognised impairment
loss. Depreciation is charged to theconsolidated income statement so as
to write off the cost or valuation lessestimated residual values over their
expected useful lives on a straight-line
basis over the following periods:• Fixtures and fittings: three to ten years,
or period of the lease if shorter• Computer equipment: three years
Residual values and useful economic lives
are assessed annually. The gain or loss on
the disposal or retirement of an asset isdetermined as the difference between thesales proceeds and the carrying amountof the asset and is recognised in operating
expenses.

Leased assets
The Group as a lessee
For any new contracts entered into, theGroup considers whether a contract is,or contains, a lease. A lease is definedas ‘a contract, or part of a contract, thatconveys the right to use an asset (theunderlying asset) for a period of time inexchange for consideration’. To apply thisdefinition the Group assesses whether
the contract meets three key evaluations
which are whether:• the contract contains an identified
asset, which is either explicitly
identified in the contract or implicitly
specified by being identified at thetime the asset is made available to
the Group• the Group has the right to obtain
substantially all of the economic
benefits from use of the identified
asset throughout the period of use,considering its rights within the defined
scope of the contract• the Group has the right to direct theuse of the identified asset throughout
the period of use. The Group assesses
whether it has the right to direct ‘how
and for what purpose’ the asset is usedthroughout the period of use

IQGeo Group plc Annual Report 2020

Financial statements

Measurement and recognition ofleases as a lessee
At lease commencement date, theGroup recognises a right-of-use asset
and a lease liability on the consolidated
statement of financial position.
The right‑of-use asset is measured
at cost, which is made up of the initial
measurement of the lease liability, any
initial direct costs incurred by the Group,
an estimate of any costs to dismantle
and remove the asset at the end of thelease, and any lease payments made inadvance of the lease commencement
date (net of any incentives received).
The Group depreciates the right-of‑use
assets on a straight-line basis fromthe lease commencement date to theearlier of the end of the useful life of
the right-of-use asset or the end of thelease term. The Group also assesses theright‑of‑use asset for impairment whensuch indicators exist.
At the commencement date, the Groupmeasures the lease liability at thepresent value of the lease payments
unpaid at that date, discounted using theinterest rate implicit in the lease if thatrate is readily available or the Group’s
incremental borrowing rate.
Lease payments included in themeasurement of the lease liability are
made up of fixed payments (including
in substance fixed), variable payments
based on an index or rate, amounts
expected to be payable under aresidual value guarantee and payments
arising from options reasonably certain
to be exercised.
Subsequent to initial measurement, theliability will be reduced for payments
made and increased for interest. It isremeasured to reflect any reassessment
or modification, or if there are changes inin-substance fixed payments.
When the lease liability is remeasured,
the corresponding adjustment isreflected in the right-of-use asset, or
profit and loss if the right-of-use asset
is already reduced to zero.
The Group has elected to accountfor short-term leases and leases of
low-value assets using the practical
expedients. Instead of recognising aright-of-use asset and lease liability,
the payments in relation to these arerecognised as an expense in profit orloss on a straight-line basis over thelease term.

IQGeo Group plc Annual Report 2020

On the consolidated statement offinancial position, right-of-use assets
have been presented as non-current
assets and lease liabilities have been
included in trade and other payables.

Impairment of non-financial assets
Assets that have an indefinite useful life
– for example, goodwill – are not subject
to amortisation and are tested at least
annually for impairment and whenever
there is an indication that the asset may
be impaired. Assets that are subject toamortisation are reviewed for impairment
whenever events or changes incircumstances indicate that the carrying
amount may not be recoverable.
An impairment loss is recognised for theamount by which the asset’s carrying
amount exceeds its recoverable amount.
The recoverable amount is the higherof an asset’s fair value less costs tosell and value in use. For the purposesof assessing impairment, assets aregrouped at the lowest levels for which
there are separately identifiable
cash flows (cash-generating units).
Impairment losses are recognised
immediately in profit or loss.
Non-financial assets other than
goodwill that suffered an impairment
are reviewed for possible reversalof the impairment at each reporting
date. Where an impairment loss isreversed, it is reversed to the extent thatthe increased carrying amount does
not exceed the carrying amount thatwould have been determined had no
impairment loss been recognised in prioryears. A reversal of an impairment loss isrecognised immediately in profit or loss.

Financial instruments
Recognition and derecognition
Financial assets and financial liabilities
are recognised when the Group becomesa party to the contractual provisions of
the financial instrument.
Financial assets are derecognised when
the contractual rights to the cash flows
from the financial asset expire, or when
the financial asset and substantially all
the risks and rewards are transferred.
A financial liability is derecognised when
it is extinguished, discharged, cancelled
or expires.

Classification and initial
measurement of financial assets
Except for those trade receivables that
do not contain a significant financing
component and are measured at thetransaction price in accordance withIFRS 15, all financial assets are initiallymeasured at fair value adjusted fortransaction costs (where applicable).
Financial assets, other than those
designated and effective as hedging
instruments, are classified into thefollowing categories:• amortised cost;• fair value through profit or loss
(FVTPL); and• fair value through othercomprehensive income (FVOCI).
The classification is determined by both:• the entity’s business model for
managing the financial asset; and• the contractual cash flow
characteristics of the financial asset.
All income and expenses relating tofinancial assets that are recognised
in profit or loss are presented within
finance costs, finance income or otherfinancial items, except for impairmentof trade receivables which is presented
within other expenses.

Subsequent measurement offinancial assets

Financial assets at amortised cost
Financial assets are measured atamortised cost if the assets meet thefollowing conditions (and are notdesignated as FVTPL):• they are held within a business model
whose objective is to hold the financial
assets and collect its contractual cash
flows; and• the contractual terms of the financial
assets give rise to cash flows thatare solely payments of principal andinterest on the principal amountoutstanding.
After initial recognition, these aremeasured at amortised cost using theeffective interest method. Discounting isomitted where the effect of discounting
is immaterial. The Group’s cash andcash equivalents, trade and most otherreceivables fall into this category offinancial instruments.

75Notes to the consolidated financial statements continued

for the year ended 31 December 2020
3 Summary of significant
accounting policies continued
Financial instruments continued
Subsequent measurement offinancial assets continued

The Group assess impairment of tradereceivables on a collective basis as they
possess shared credit risk characteristics
they have been grouped based on thedays past due.

Financial assets at fair value throughprofit or loss (FVTPL)
Financial assets that are held within adifferent business model other than ‘holdto collect’ or ‘hold to collect and sell’are categorised at fair value throughprofit and loss. Further, irrespective of
business model, financial assets whose
contractual cash flows are not solely
payments of principal and interest are
accounted for at FVTPL.

Classification and measurement offinancial liabilities

Assets in this category are measured
at fair value with gains or losses
recognised in profit or loss. The fairvalues of financial assets in this category
are determined by reference to active
market transactions or using a valuation
technique where no active market exists.

Subsequently, financial liabilities aremeasured at amortised cost using
the effective interest method except
for derivatives and financial liabilities
designated at FVTPL, which are carriedsubsequently at fair value with gains
or losses recognised in the profit orloss (other than derivative financial
instruments that are designated andeffective as hedging instruments).

Investments
As part of the sale transaction of the
RTLS business unit on 31 December
2018, the Group holds a rollover equity
investment in Abyssinian Topco Limited(registered number: 11650137) which
following the transaction, is the parent
company of the RTLS SmartSpacebusiness unit.
The Group has made the irrevocable
election to account for the investment
in Abyssinian Topco Limited at fair value
through other comprehensive income(FVOCI). In the current financial year,
the fair value was determined in linewith the requirements of IFRS 9, which
does not allow for measurement at cost.

Trade receivables
Trade receivables are amounts due from
customers for products sold or services
performed in the ordinary course ofbusiness. If collection is expected in one
year or less, they are classified as current
assets. If not, they are presented as
non‑current assets.
The Group makes use of a simplified
approach in accounting for trade andother receivables as well as contract
assets and records the loss allowanceas lifetime expected credit losses. These
are the expected shortfalls in contractual
cash flows, considering the potential for
default at any point during the life of
the financial instrument. In calculating,
the Group uses its historical experience,external indicators and forward-looking
information to calculate the expectedcredit losses using a provision matrix.

76

The Group’s financial liabilities include
borrowings, trade and other payables
and derivative financial instruments.
Financial liabilities are initially measured
at fair value, and, where applicable,
adjusted for transaction costs unless theGroup designated a financial liability atfair value through profit or loss.

Trade payables
Trade payables are obligations to
pay for goods or services that havebeen acquired in the ordinary courseof business from suppliers. Accounts
payable are classified as current
liabilities if payment is due within one
year or less. If not, they are presented as
non-current liabilities.
Trade payables are recognised initiallyat fair value and subsequently measured
at amortised cost using the effective
interest method.

Cash and cash equivalents
In the consolidated statement of cash
flows, cash and cash equivalents includes
cash in hand, deposits held at call withbanks and other short-term highly liquid
investments with original maturities ofthree months or less.

Share capital and share premium
Ordinary shares are classified as equity.
Incremental costs directly attributable
to the issue of new shares or options areshown in equity as a deduction, net oftax, from the proceeds. The nominal
value of shares issued is classified asshare capital and the amounts paid
over the nominal value in respect ofshare issues, net of related costs, isclassified as share premium.

Share-based payment reserve
The share-based payment reserve
relates to a cumulative charge madein respect of share options granted by
the Company to the Group’s employees
under its employee share option plans.

Capital redemption reserve
The capital redemption reserve relates
to the repurchase and subsequentcancellation of issued ordinary
share capital.

Merger relief reserve
The merger relief reserve relates tothe issue of shares as consideration for
acquisitions of direct or indirect 100%
owned subsidiaries within the Group.

Translation reserve
Exchange differences relating to thetranslation of the results and net assetsof the Group’s foreign operations
from their functional currencies to
the Group’s presentation currency of
GBP, are recognised directly in othercomprehensive income and accumulated
in the translation reserve.

Retained earnings
Retained earnings include all current andprior period retained profits/losses.

Borrowings
Borrowings are recognised initially at fairvalue, net of transaction costs incurred.
Borrowings are subsequently carried atamortised cost; any difference between
the proceeds (net of transaction costs)
and the redemption value is recognisedin the consolidated income statement
over the period of the borrowings using
the effective interest method.

IQGeo Group plc Annual Report 2020

Financial statements

4 Critical accounting judgements
and key sources of estimation
and uncertainty

Business combinations

Revenue recognition

When preparing the financial
statements, management makes
a number of judgements, estimatesand assumptions about the recognition
and measurement of assets, liabilities,
income and expenses.

On 21 December 2020 the Groupacquired OSPInsight International Inc.
("OSPI") for a total consideration of
up to $8.75 million. In accounting forbusiness combinations the Directors
have exercised judgement in identifying
the intangibles acquired under thebusiness combination.

Significant management judgements

Estimating uncertainty

The following are the judgements
made by management in applying theaccounting policies of the Group thathave the most significant effect on thefinancial statements.

The Group makes estimates andassumptions concerning the future.
The resulting accounting estimates
will, by definition, seldom equal the
related actual results. The estimatesand assumptions that have a significant
risk of causing a material adjustment
to the carrying amounts of assets andliabilities within the next financial year
are addressed below.

For each identified significant
performance obligation, management
are required to determine which
obligations meet the criteria torecognise revenue over time. As revenue
from fixed price services agreements
is recognised over time, the amountof revenue recognised in a reporting
period depends on the extent to which
the performance obligation has beensatisfied. This requires an estimate of
the time and value to deliver the services
to be provided, based on historicalexperience with similar contracts.
In a similar way, recognising revenue
requires the estimated number of hours
required to complete the promised work.

Capitalisation of development costs
The point at which development costs
meet the criteria for capitalisation is
critically dependent on management’s
judgement of the point at which
technical and commercial feasibility
is demonstrable. The carrying amountof capitalised development costs
at 31 December 2020 is £1.8 million(2019: £1.5 million). After capitalisation,
management monitors whether therecognition requirements continue to be
met and whether there are any indicatorsthat capitalised costs may be impaired.

Revenue recognition
Significant management judgement
is applied in determining the distinct
performance obligations included within
contracts involving multiple deliverables.

Deferred tax
A deferred tax asset is recognised where
the Group considers it probable that
future tax profits will be available against
which the tax credit will be utilised in the
future. This specifically applies to tax
losses and to outstanding vested shareoptions at the statement of financial
position date. In estimating the amountof the deferred tax asset that should
be recognised, the Directors makejudgements based on current budgets
and forecasts about the amount of futuretaxable profits and the timings of whenthese will be realised. No deferred tax
asset is currently recognised.

IQGeo Group plc Annual Report 2020

Amortisation and impairmentof development costs
Capitalised development costs areamortised over a three year period
which is management’s estimate of
the useful lives of current development
projects. In reaching this conclusion,
management have made assumptions in
respect of future customer requirements
and developments within the industry.
These estimates have a high level of
uncertainty and are matters outsideof management’s control.

Business combinations
On 21 December 2020 the Groupacquired OSPInsight International Inc.
("OSPI") for a total consideration of
up to $8.75 million. In accounting forbusiness combinations the Directors
have determined the valuation of
intangibles through estimates about
future revenues, costs and cash flowsof the Group. Additionally, the Directors
have estimated the fair value ofcontingent consideration associatedwith the OSPI acquisition.

The Group reviews capitalised
development costs for impairment
annually in accordance with theaccounting policy stated in note 3.
In performing the impairment review,
management are required to makeassumptions of the future cash flows
generated from the software products.
This includes consideration of both thecurrent business pipeline and estimations
beyond the existing pipeline. Estimation
uncertainty relates to assumptions
about future operating results and thedetermination of a suitable discount rate.

77

Notes to the consolidated financial statements continued

for the year ended 31 December 2020
5 Business information
5.1 Operating segments

Management provides information reported to the Chief Operating Decision Maker (CODM) for the purpose of assessing
performance and allocating resources. The CODM is the Chief Executive Officer.
The business delivers software solutions that integrate data from any source – geographic, real-time asset, GPS, location,
corporate and external cloud-based sources – into a live geospatial common operating picture, empowering all users in thecustomer’s organisation to access, input and analyse operational intelligence to proactively manage their networks, respondquickly to emergency events and effectively manage day-to-day operations. These geospatial operations are reported to the
CODM as a single business unit.

5.2 Revenue by typeThe following table presents the different revenue streams of the IQGeo Group.
				
Revenue by stream				

2020
£’000

% of total
revenue

2019
£’000

of totalYear on% revenue year growth

Subscription				

1,860

20%

381

5%

388%

Maintenance and support				

1,335

15%

1,251

16%

7%

Recurring IQGeo product revenue				

3,195

35%

1,632

21%

96%

Software				

299

3%

1,589

20%

(81)%

Services					
3,846

42%

2,328

30%

65%

Non-recurring IQGeo product revenue					
4,145

45%

3,917

50%

6%

Total IQGeo product revenue					
7,340

80%

5,549

71%

32%

Geospatial services from third party products				

1,815

20%

2,257

29%

(20)%

Total revenue

9,155

100%

7,806

100%

17%

			

5.3 Geographical areas of continuing operations
The Board and management team also review the revenues on a geographical basis, based around the regions where the Grouphas its significant subsidiaries or markets.
The Group’s revenue from external customers in the Group’s domicile, the UK, and its major worldwide markets have been
identified on the basis of the customers’ geographical location. Non-current assets are allocated based on their physical location.
The following table represents the Group’s continuing operational revenue and non-current assets by geographical region:
Revenue													
20202019						£’000£’000

Non-current assets
2020
£’000

2019
£’000

3,630

UK						
316

95

1,927

Europe						
146

169

—

1

USA						
5,990

5,897

8,705

121
2

Canada						
1,233

1,164

2

Japan						
1,437

461

2

1

33

20

—

—

						
9,155

7,806

10,636

3,755

Rest of World						The main country of operation of the Group is the United States of America as this is where the majority of revenue is generated.
2020 revenues include £1.1 million from income deferred at the beginning of the period (2019: £0.9 million) relating to performanceobligations satisfied overtime.
Contract liabilities arising as a result of the OSPI acquisition were £1.4 million.

5.4 Information about major customers of the continuing operations
During 2020, the Group had one customer who generated revenues of greater than 10% of total Geospatial revenue. £1.6 million
was generated from one US customer.
During 2019, the Group had one customer who generated revenues of greater than 10% of total Geospatial revenue. £1.8 million
was generated from one US customer.

78

IQGeo Group plc Annual Report 2020

Financial statements

6 Acquisitions
On 21 December 2020 the Group acquired 100% of the equity instruments of OSPInsight International Inc. ("OSPI"), a businessbased in Utah, USA, thereby obtaining control.
Details of the business combination are as follows:									£’000Fair value of the consideration transferred			Amount settled in cash									3,998Amount settled in shares									
757
746Fair value of deferred consideration									Fair value of contingent consideration									

746Total								6,247Recognised amounts of identifiable net assets			
Right‑of‑use assets									71Intangible assets									2,656Total non‑current assets									2,727Cash and cash equivalents									8Trade and other receivables									
702Total current assets									
710
(34)

Lease obligations								Total non‑current liabilities									
(34)Trade and other payables								(1,573)

Lease obligations									
(37)Total current liabilities 									(1,610)Identifiable net assets									1,793Goodwill on acquisition									4,454Consideration settled in cash									3,998Cash acquired									
(8)Net cash flow from acquisition									3,990Consideration transferred
The acquisition of OSPI was settled through cash payment of £4.0 million and through issue of 923,294 ordinary 2p shares of
IQGeo Group plc, to the sellers of OSPI.
The deferred consideration will be satisfied by cash payment of $538,000 with the balance settled through issue of shares in
IQGeo Group plc with the deferred consideration fully settled on 21 December 2021.
The purchase agreement included an additional consideration of up to $1.1 million subject to achievement of defined levels ofrecurring revenue during the year ended 31 December 2021. Management anticipate this earn out will be settled in full withamounts payable in January 2022.

Identifiable net assets
The fair value of the trade and other receivables acquired as part of the business combination amounted to £702,000, with a grosscontractual amount of £723,000. As of the acquisition date, the Group’s best estimate of the contractual cash flow not expected tobe collected amounted to £21,000.

OSPI’s contribution to the Group results
OSPI contributed £60,000 of revenue and £1,000 of profit to the consolidated income during the period 21 December 2020 to
31 December 2020.
If OSPI had been acquired on 1 Jan 2020 the Group revenues for the year would increase by £2.9 million and the loss for the year
would reduce by £0.1 million.

IQGeo Group plc Annual Report 202079

Notes to the consolidated financial statements continued

for the year ended 31 December 2020
7 Discontinued operations

On 31 December 2018, the Group disposed of its RTLS SmartSpace business unit for a consideration of up to £35.0 million with
£30.0 million paid in cash on completion (subject to adjustments for net debt and net working capital) in addition to a £2.0 million
rollover investment. The conditions required for £3.0 million of contingent consideration to become payable were not met.
The following information is attributable to the RTLS SmartSpace business unit:

7.1 Consolidated income statement for the year ended 31 December 2020								2020								
£’000

2019
£’000

Operating expenses								—

161Profit from discontinued operations prior to gain on disposal						—

161Gain on disposal of the RTLS SmartSpace business unit						—

242Profit/(loss) from discontinued operations

403						—The gain on disposal of the RTLS SmartSpace business unit discontinued operations is summarised as follows;								2020								
£’000

2019
£’000

Consideration received or receivable:		
—214

Total disposal consideration								—

214Transaction costs incurred								—

38Amounts receivable on finalisation of completion accounts						

—

(10)

Gain on disposal of the RTLS SmartSpace business unit						—

242Accrued bonuses in respect of the transaction completion						7.2 Cash flows from discontinued operations								2020								
£’000

2019
£’000

Cash received on sale of the RTLS SmartSpace business unit						

—

1,060

Disposal costs in relation to the RTLS SmartSpace business unit						

—(1,839)Total net cash inflow/(outflow) from investing activities:						

—

(779)

8 Employee information
8.1 Employee numbers
The number of people as at 31 December and the average monthly number of people employed during the year,
including Executive Directors, was:
Actual number ofpeople as at
31 December							

						
2020
By activity						NumberAverage monthly
number of people

2019
Number

2020
Number

2019
NumberTechnical consultants						
36

21

24

20

Sales & marketing						

29

23

19

24

Research & development						

20

16

15

13

Administration						
11

11

10

11

						
96

71

68

68

						
2020
By geography						Number

2019
Number

2020
Number

2019
Number17

United Kingdom						
18

17

16

Europe						2

4

3

4

North America						
72

47

46

44

Asia 						
4

3

3

3

						
96

71

68

68

80

IQGeo Group plc Annual Report 2020

Financial statements

8.2 Employee benefits
The aggregate employee benefit expense, including Executive Directors, comprised:								2020								
£’000

2019
£’000

Wages and salaries								
8,169

7,872

Social security costs								
638

523

340

355

Share-based payments								
130

102

Contributions to defined contribution pension arrangements						Total aggregate employee benefits								
9,277

8,852

								2020								
£’000

2019
£’000

7

72

					
7

72

9 Finance income and costs
Interest income from cash and cash equivalents							Finance income			Bank loan interest								
(8)

—

(97)

(10)

Finance costs								
(105)

(10)

Net finance costs								
(98)

62

Interest expense for lease arrangements								10 Loss before tax: analysis of expenses by nature
10.1 Expenses by nature of continuing operations
The following items have been charged/(credited) to the consolidated income statement in arriving at a gain before tax:								2020							
Notes
£’000

2019
£’000

Amortisation of other intangible assets							

13

1,002

815

Depreciation of owned property, plant and equipment					

14

68

57

Depreciation of right‑of‑use assets							

15

301

228

Lease rental charges – land and buildings							

21

242

221

Research & development costs expensed								

320

238

Net foreign currency gains								
(14)

(38)

Unrealised foreign exchange losses on intercompany trading balances					

43

110

Non-recurring items							
10.2

289

136

								2020								
£’000

2019
£’000

10.2 Non-recurring items
Acquisition costs								289

—Capital reduction costs								—

136Total non-recurring items								
289

136

Acquisition costs
On 21 December 2020 the Group acquired OSPInsight International Inc. Costs of acquisition have been expensed during the year.

Capital reduction
On 2 August 2019, the Company announced a proposed tender offer to repurchase up to a maximum of 28,260,869 of theCompany's Ordinary Shares at a price of 46 pence per Ordinary Share. Following approval of the tender offer by a General
Meeting of shareholders on 22 August 2019, the tender offer completed on 30 August 2019, resulting in the share capital reducing
by 23,803,690 and £10,950,000 of surplus funds being returned to shareholders in September 2019.

IQGeo Group plc Annual Report 202081

Notes to the consolidated financial statements continued

for the year ended 31 December 2020

10 Loss before tax: analysis of expenses by nature continued
10.3 Auditors’ remuneration
During the year, the Group (including its overseas subsidiaries) obtained the following services from the Company’s auditor andits associates:								2020								
£’000

2019
£’000

Fees payable to the Group’s auditor for the audit of:		
Parent Company and consolidated financial statements						

85

70Financial statements of subsidiaries, pursuant to legislation						

12

10Total audit fees								
97

80Fees payable to the Group’s auditor for other services:		
Tax advisory								
43

17Audit related assurance services								
16

21Other services								6

—Total non-audit fees								
65

38Total auditors’ remuneration								
162

118

The auditor of IQGeo Group plc is Grant Thornton UK LLP.

11 Income tax
11.1 Income tax recognised in the consolidated income statement								2020								
£’000

2019
£’000

Current tax
Corporation tax								
(399)

—

18

(118)

Adjustment in respect of prior year								Foreign tax								—

—Total current tax credit								
(381)

(118)

Deferred tax – continuing operations			
Origination and reversal of temporary differences							

66

54Total deferred tax charge								
66

54Total income tax credit for the year 								
(315)

(64)

The tax credit differs from the standard rate of corporation tax in the UK for the year of 19% (2019: 19%) for the following reasons:								2020								
£’000

2019
£’000

(4,426)(6,234)

Loss before tax – continuing operations							

—403(4,426)(5,831)(841)(1,108)318

16Additional overseas tax deduction								
(162)

(77)

Gain before tax from discontinued operations							Total gain before tax							Loss before tax multiplied by the standard rate of corporation tax in the UK of 19.0% (2019: 19%)			
Tax effects of:		
Expenses not deductible for tax purposes								

—

(24)

Unrecognised deferred tax movements								
806

1,371

18

(118)

Utilisation of previously unrecognised tax losses							Tax unprovided/(overprovided) in prior years							

(399)

—

Difference on tax treatment of share options – unrecognised						

25

19Differential on overseas tax rates								

(80)

(143)

							
(315)

(64)

Research & development tax credits – prior years						Total income tax debit/(credit)

82

IQGeo Group plc Annual Report 2020

Financial statements

11.2 Factors that may affect future tax charges
The Group has tax losses of £19.3 million (2019: £17.6 million) that are available for offset against future taxable profits of thosesubsidiary companies in which the tax losses arose. Deferred tax assets have not been recognised in respect of these losses as they
may not be used to offset taxable profits elsewhere in the Group, and they have arisen in subsidiaries whose future taxable profits
are uncertain. No deferred tax has been recognised on the unremitted earnings of overseas subsidiaries, because the earnings arecontinually reinvested by the Group and no tax is expected to be payable on them in the foreseeable future.
The deferred tax balances have been measured at 19%, based on the current UK tax rate.

11.3 Deferred tax
The movement in deferred tax in the consolidated statement of financial position during the year is as follows:
Deferred income
tax assets															
20202019						£’000£’000

Deferred income
tax liabilities
2020
£’000

2019
£’000

(285)

(231)

At 1 January						—

—Deferred tax charged to the income statement					

—

—

(66)

(54)

					
—

—

(351)

(285)

								2020								
£’000

2019
£’000

Development costs capitalised								
(351)

(285)

(351)

(285)

At 31 December

The components of deferred tax included in the consolidated statement of financial position are as follows:

Total deferred income tax liabilities								Deferred tax assets have not been recognised in respect of the following items because it is not probable that future taxable profits
will be available against which the Group can utilise the benefits:								2020								
£’000

2019
£’000

Tax losses carried forward								
3,766

3,396

Equity-settled share options temporary differences							

18

8Total unrecognised deferred tax assets								

3,784

3,404

								
2020

2019

12 Earnings per share (EPS)
Earnings attributable to Ordinary Shareholders		
Loss from continuing operations (£'000)								(4,111)(6,170)—403(4,111)(5,767)50,19565,977– Share options (’000)							

1,002

67

Weighted average number of ordinary shares for the purposes of diluted EPS (’000)				

51,19766,044

(8.2)

(9.4)

—

0.6

(8.2)

(8.7)

Gain from discontinued operations (£'000)						(Loss)/gain from continuing and discontinued operations (£'000)						Number of shares		
Weighted average number of ordinary shares for the purposes of basic EPS (’000)			
Effect of dilutive potential ordinary shares: 		Continuing operations EPS		
Basic and diluted EPS (pence) 								Discontinued operations EPS		
Basic and diluted EPS (pence)								Continuing and discontinued operations EPS		
Basic and diluted EPS (pence)								IQGeo Group plc Annual Report 202083

Notes to the consolidated financial statements continued

for the year ended 31 December 2020
12 Earnings per share (EPS) continued

Basic earnings per share is calculated by dividing profit/(loss) for the period attributable to ordinary shareholders of the Company by
the weighted average number of ordinary shares outstanding during the period. For diluted earnings per share, the weighted average
number of shares is adjusted to allow for the effects of all dilutive share options and warrants outstanding at the end of the year.
Options have no dilutive effect in loss-making years and are therefore not classified as dilutive for Discontinued and Total EPS since
their conversion to ordinary shares does not decrease earnings per share or increase loss per share from continuing operations.
The Group also presents an adjusted diluted earnings per share figure which excludes share-based payments charge, unrealised
foreign exchange gains/(losses) on intercompany trading balances and non-recurring items from the measurement of loss forthe period.
Continuing operations							
Notes

2020

2019

Continued earnings for the purposes of diluted EPS being net loss
attributable to equity holders of the parent company (£’000)						(4,111)(6,170)130

102

Adjustments: 			
Reversal of share-based payments charge (£’000)							Unrealised foreign exchange gains/(losses) on intercompany trading balances (£’000)				

43

110

Reversal of non-recurring items (£’000)							

289

136

Net adjustments (£’000)								
462

348

Adjusted earnings (£’000)								(3,649)(5,822)Adjusted diluted EPS from continuing operations (pence)						
(7.3)

(8.8)

10

The adjusted EPS information is considered to provide a fairer representation of the Group’s trading performance. Options have no
dilutive effect in loss-making years.

13 Intangible assets							Capitalised				
Acquired
Acquired		
product				
customersoftwareAcquired development
			 Goodwill relationships
products
brandscosts
			£’000
£’000
£’000
£’000
£’000

Software
£’000

Total
£’000

Cost 						At 1 January 2019			

2,970

—

—

—

6,447

22

9,439

Additions			—

—

—

—

1,074

102

1,176

At 31 December 2019			

2,970

—

—

—

7,521

124

10,615Additions			—

—

—

—

1,305

2

1,307

Additions as a result of acquisition

		
4,454

2,118

480

58

—

—

7,110

Effect of movements in exchange rates

		
(51)

At 31 December 2020			

7,373

(46)

(10)

(2)

—

—

(109)

2,072

470

56

8,826

126

18,923(8,204)

Accumulated amortisation						At 1 January 2019			

(2,970)———(5,234)—Charge for the year			

—

—

—

—

(788)

(27)

(815)

(2,970)———(6,022)(27)(9,019)At 31 December 2019		
Charge for the year			

—

—

—

—

(961)

(41)

(1,002)

At 31 December 2020			

(2,970)———(6,983)(68)(10,021)

Net book amount						At 31 December 2020			

4,403

2,072

470

56

1,843

58

8,902

At 31 December 2019			

—

—

—

—

1,499

97

1,596

On 21 December 2020, the Group acquired 100% of the equity instruments of OSPInsight International Inc. ("OSPI"), a business based in
Utah, USA, thereby obtaining control. Goodwill, acquired customer relationships, acquired software products and acquired brands havebeen recognised following the business combination. In future periods Goodwill will be subject to an annual impairment test and theacquired customer relationships, acquired software products and acquired brands will be amortised over their useful economic life.
Capitalised product development costs relate to expenditure that can be applied to a plan or design for the production of newor substantial improvements to software products. The Group is loss-making and this is an indicator for potential impairmentof development costs. Management have completed impairment reviews through estimating the future discounted cash flows to begenerated from these assets and concluded that no impairment is required as the cash flows exceeded the carrying value of the asset.
The remaining average amortisation period for capitalised product development costs is 2 years. The software assets represent assets
purchased from third parties. Goodwill, acquired customer relationships and acquired software products relate to the OSPI acquisition(see note 6).

84

IQGeo Group plc Annual Report 2020

Financial statements

14 Property, plant and equipment							Fixtures and							fittings							£’000

Computerequipment
£’000

Total
£’000

176

382

Cost 			At 1 January 2019							

206Effect of movements in exchange rates							

(7)

(4)

(11)

Additions							
7

49

56

Disposals 							
(25)

(35)

(60)

At 31 December 2019							

181

186

367

Effect of movements in exchange rates							

(5)

(4)

(9)

Additions							
147

18

165

Disposals							
(160)

(7)

(167)

At 31 December 2020							

163

193

356
(298)

Accumulated depreciation			At 1 January 2019							

(180)

(118)

Effect of movements in exchange rates							

7

7

14

Charge for the year							

(16)

(41)

(57)

Disposals							
25

35

60

At 31 December 2019							

(164)

(117)

(281)

Effect of movements in exchange rates							

(9)

2

(7)

Charge for the year							

(27)

(41)

(68)

Disposals							
160

7

167

(40)

(149)

(189)

At 31 December 2020							

123

44

167

At 31 December 2019							

17

69

86

								2020								
£’000

2019
£’000

At 31 December 2020							Net book amount			

15 Right‑of‑use assets
Details of the Group’s right‑of‑use assets and their carrying amount are as follows:

Cost			At 1 January								
492

502

(66)

(10)

1,770

—

Effect of movements in exchange rates							Additions							Lease related to acquisition								
71

—

(492)

—

Cost at 31 December								
1,775

492

Disposal							Depreciation			At 1 January							

(419)

(198)

Effect of movements in exchange rates								

20

7Charge for the year								
(301)

(228)

Disposal 								492

—Depreciation at 31 December								
(208)

(419)

Net book amount at 31 December								
1,567

73

IQGeo Group plc Annual Report 202085

Notes to the consolidated financial statements continued

for the year ended 31 December 2020
16 Investments

At 31 December 2020, the Group holds a rollover investment in Abyssinian Topco Limited as part of the consideration for the sale of
the RTLS SmartSpace business unit on 31 December 2018. Abyssinian Topco Limited is a UK registered company (company number
11650137) and is the parent company of Ubisense Limited (company number 04489603) which along with its subsidiary companies,
comprise the RTLS SmartSpace business unit.
									£’000Investment as 31 December 2019									2,000Fair value adjustment									
500Reclassification as current asset held for sale								(2,500)Investment as 31 December 2020									

—IQGeo Group plc hold 5.4% (2019: 5.3%) of the ordinary share capital of Abyssinian Topco Limited.
On 29 December 2020, the Group entered into an agreement to sell its shares in Abyssinian Topco Limited during January 2021
for a consideration of £2.5 million. As at 31 December 2020, the investment has been reclassified as a current asset held for salewithin the consolidated statement of financial position at a value of £2.5 million.

17 Trade and other receivables								2020							
Notes
£’000

2019
£’000

Trade receivables, gross								
1,888

1,365

17.1

(31)

(4)

Trade receivables, net							
17.2

1,857

1,361

Amounts recoverable on contracts								
457

336

Allowances for expected credit losses							Other receivables								
70

68Prepayments								
466

540

VAT and taxation receivable								—

48Total trade and other receivables						

		
2,850

2,353

All amounts disclosed are short term. The carrying value of trade receivables is considered a reasonable approximation offair value. Expected credit losses are not material.
The following disclosures are in respect of trade receivables that are either impaired or past due. The individually impaired
receivables mainly relate to customers who are in unexpectedly difficult economic situations and are assessed on acustomer‑by‑customer basis following detailed review of the particular circumstances. To the extent they have not been
specifically provided against, the trade receivables are considered to be of sound credit rating.

17.1 Movement in allowance for expected credit losses								2020								
£’000

2019
£’000

At 1 January								(4)

—Amounts written off in the year								

—

35Allowance acquired							

(21)

—

Allowance released								—

—Allowance made								
(6)

(39)

At 31 December(4)							
(31)

17.2 Ageing of past due but not impaired receivables								2020								
£’000

2019
£’000

1,666

1,173

0 to 90 days overdue								

191

188

More than 90 days overdue								—

—							
1,857

1,361

Neither past due nor impaired								Past due but not impaired:			

Total

86

IQGeo Group plc Annual Report 2020

Financial statements

18 Cash and cash equivalents								2020								
£’000

2019
£’000

11,07813,053

Cash and cash equivalents								11,07813,053

Cash at bank and in hand								Cash at bank earns interest at floating rates based on daily bank overnight deposit rates. Short-term cash deposits earn interest
at fixed rates for the term of the deposit.
The composition of cash and cash equivalents by currency is as follows:								2020By currency								
£’000

2019
£’000

British Pound (GBP)								8,95110,083Euro (EUR)								
23

373US Dollar (USD)								
745

1,936

Japanese Yen (JPY)								
486

392

Canadian Dollar (CAD)								
873

269

Cash and cash equivalents								11,07813,05319 Trade and other payables								2020							
Notes
£’000

2019
£’000

Deferred income								
2,833

1,118

Trade payables								74

272Trade accruals								
1,741

1,428

Other taxation and social security								

430

317

Deferred acquisition consideration							
6

746

—

Other payables								4

106Total trade and other payables

3,241							5,828

All amounts disclosed are short term. The carrying value of trade payables is considered a reasonable approximation of fair value.

20 Bank loans
In April 2020, IQGeo America Inc, a subsidiary of IQGeo Group plc, applied for and received a loan of $819,000 under the USA
CARES Act’s “Paycheck Protection Program” in order to support the USA operations during the uncertainty caused by the impactof the global Covid-19 pandemic. The loan was provided by HSBC Bank USA and will accrue interest at a rate of 1.0% p.a. The loan
is repayable in 18 monthly instalments commencing in August 2021.

21 Lease obligation
The Group has measured lease liabilities at the present value of the remaining lease payments, discounted using the Group’s
incremental borrowing rate at the date of initial application.
Details of the Group’s liability in respect of right‑of‑use assets and their carrying amount are as follows:								2020								
£’000

2019
£’000

At 1 January								79

309Effect of movements in exchange rates								

(76)

1

New leases entered into during the year								

1,753

—

Lease related to acquisition								71

—Finance costs incurred								
97

7Payments made during the year								

(78)

(238)

At 31 December							

1,846

79

Lease liability payable within 1 year								

208

79

Lease liability payable in more than 1 year							

1,638

—

At 31 December								
1,846

79

Presented as:		

IQGeo Group plc Annual Report 202087

Notes to the consolidated financial statements continued

for the year ended 31 December 2020
21 Lease obligation continued

During the year the Group commenced a 7 year lease running to February 2028 on new premises in Denver as the lease on theexisting premises in Denver ended on 30 April 2020.
The OSPI business acquired during the year operates from premises in Utah which are leased until 31 January 2023.
The lease liability consists of £2.2 million of lease payments after deduction of £0.4 million of future finance charges.

Leases as lessee
The Group maintains short-term office rental agreements within Germany, Japan and the UK. The leases entered into are 12
months or less and the Group has elected to apply the practical expedient permitted under IFRS 16 to not recognise a right‑of‑use
asset and lease liability in respect of these leases due to their short-term nature. The 2020 operating expense presented within the
consolidated income statement includes £242,000 of rent expense in respect of these leases. The future obligations for the new
short-term leases are reported within the table below.
The Group enters into these arrangements as these are a cost-efficient way of obtaining the short-term benefits of these assets.
The Group’s future aggregate minimum lease payments under non-cancellable short-term leases are as follows:								Land and								buildings								2020								
£’000Land andbuildings
2019
£’000

160

231

Total								
160

231

No later than one year								The above table reflects the committed cash payments under short-term leases, rather than the expected charge to theconsolidated income statement in the relevant periods.

22 Share capital and premium					
Number of			Merger					
ordinary
Share
Share
relief					sharescapitalpremium
reserve					of £0.02 each
£’000
£’000
£’000

Balance at 1 January 2019					73,087,904
Issued under share-based payment plans					1,46246,375

—

Total
£’000

47,837219,215

4

27

—

31

—

—

(28,948)—(28,948)

Repurchase and cancellation of shares					(23,803,690)

(476)

—

—

(476)

Change in year					(23,584,475)(472)(28,921)—(29,393)

Balance at 31 December 2019					49,503,429

990

17,454—

18,44490,657

2

10

—

12

Issued on placing to institutional investors					 6,794,872

136

5,030

—

5,166

Issued as part consideration for acquisition				923,294

18

—

739

757

				57,312,252

1,146

22,494739

24,379

Capital reduction					Issued under share-based payment plans					Balance at 31 December 2020

The Company has one class of ordinary shares which carry no right to fixed income.
Shares issued by placing during 2020 raised gross cash of £5.3 million with issue costs of £0.1 million incurred.
Where shares have been issued as part of the consideration for the acquisition of OSPI, excess proceeds over nominal value arerecognised in a merger relief reserve.

88

IQGeo Group plc Annual Report 2020

Financial statements

23 Share-based payments: options
23.1 Equity-settled share-based payment arrangements
The Group operates a number of plans to award options over shares in the Company to incentivise high performing key employeesof the Group periodically.
The options generally vest evenly over three years on the anniversary from the date of the grant or entirely on the third
anniversary from the date of grant, depending on continuing service during the vesting period. The contractual life of theoptions is ten years from the date of grant, after which they expire if unexercised.

23.2 Analysis of amounts recognised in the financial statements(a) Analysis of amounts recognised in the consolidated income statement
The allocation between continuing and discontinued operations is as follows:								2020								
£’000

2019
£’000

Share-based payments charge presented as continuing operations					

130

102

Share-based payments credit presented as discontinued operations					

—

(121)

Total share-based payments (charge/credit) recognised						
130

(19)

(b) Analysis of amounts recognised in the consolidated statement of changes in equity in the year								2020								
£’000

2019
£’000

130

(19)

								2020								
£’000

2019
£’000

190

632

Net share-based payments (debit)/credit recognised in equity						(c) Cumulative amounts included within equity in the consolidated statement of financial position
Cumulative reserve credit for share-based payments							23.3 Reconciliation of movements in equity-settled share-based payment arrangements in the year						
Awards				AwardsAwards						
outstanding
GrantedExercised
Forfeited outstanding exercisable
Award			Exercise		
at 1 Janduringduringduringat 31 Dec
at 31 Dec
date
Vests
Expires
price		2020the yearthe yearthe year
2020
2020
Arrangement
Year
Years
Year
£
Currency
NumberNumberNumberNumberNumberNumberOptions

2010

2011–13

2020

0.140

GBP

94,957—90,657

4,300

—

—

2011

2012–14

2021

1.050

GBP

28,700

—

—

4,500

24,20024,20024,0002012

2013–15

2022

2.125

GBP

28,000

—

—

4,000

24,0002013

2014–16

2023

2.055

GBP

32,750———32,75032,7502014

2015–17

2024

2.250

GBP

10,000———10,00010,0002016

2017–19

2026

0.020

GBP 3,350,000—— 3,350,000

—

—

2018

2019–21

2028

0.555

GBP

—

—

—

350,000

233,3332020

2020–23

2030

0.783

USD

— 1,390,000—— 1,390,000—

350,000

2020

2020–23

2030

0.625

GBP

—

110,000——

110,000—

2020

2020–23

2030

0.460

GBP

— 1,971,000—— 1,971,000

—

2020

2020–23

2030

0.675

GBP

—

—

—

500,000—

90,657 3,362,800 4,411,950

324,283

500,000

Total						3,894,407 3,971,000
Weighted average exercise price (£)				

0.117

0.534

0.140

0.024

0.562

0.912

Weighted average remaining contractual life			 6.8 years				 8.7 years 5.4 years

IQGeo Group plc Annual Report 202089

Notes to the consolidated financial statements continued

for the year ended 31 December 2020
23 Share-based payments: options continued
23.4 Share option scheme details
2016 granted share options

On 14 December 2016, IQGeo Group plc granted 5,600,000 options of two pence each in the Company with an exercise priceset at the nominal value. The options vested if the Company’s share price exceeds 70 pence for 60 consecutive calendar days
between the second and third anniversary of issue and the period of employment continues for over three years. Due to the
LTIP performance condition not being reached in the year to 14 December 2019, the share options have not vested. Despite theperformance condition not being met during 2019, the Remuneration Committee retained the right to extend the vesting period foranother twelve months. The Remuneration Committee did not exercise the right to extend the scheme and replaced this existing
LTIP scheme with a new one during 2020.

2020 granted share options
On 15 June 2020, IQGeo Group plc implemented a new long-term incentive share option plan with options granted to Executive
Directors and employees of the Group. IQGeo Group plc granted a total of 3,471,000 share options in the Company with varying
exercise prices as set out above. The options vest in portions of one third on the first, second and third anniversaries of grant
and have no further performance conditions other than ongoing employment on the date of vesting and of exercise. Awards will
be subject to a two-year holding period from vesting point, with participants only permitted to sell shares sufficient to cover the
exercise cost and any tax liability within this holding period.
On 2 December 2020, a further 500,000 share options in the Company were granted under the same scheme and under thesame rules.
Options under this scheme were valued using the Black‑Scholes valuation model. The expected life is the expected period from
grant to exercise based on management’s best estimate of the effects of non-transferability, exercise restrictions and behaviouralconsiderations. The risk-free return is an average yield on the zero-coupon UK Government Bond in issue at the date of grant witha similar life to the option.
Within the 2020 financial statements a charge of £110,000 has been recognised in respect of share options granted during 2020.

24 Subsidiaries
The Group consists of the parent company, IQGeo Group plc, incorporated in the UK, and a number of subsidiary companies which
operate and are incorporated around the world. Information about the composition at the end of the reporting period is as follows:				Proportion				 of ordinary				 shares held
		 Country of
Principal
by Group
Subsidiary		incorporation
activity(%)

Registered office

IQGeo UK Limited		UK Geospatial solutions
100
					

Nine Hills Road
Cambridge, CB2 1GE, UK

IQGeo Germany GmbH		 Germany Geospatial solutions
100
					

Friedrich-Ebert-Anlage 49,
60308 Frankfurt am Main, Germany

IQGeo America Inc.		
US Geospatial solutions
100
					

1670 Broadway, Suite 2215, Denver,
CO 80202, United States

IQGeo Solutions Canada Inc.		 Canada Geospatial solutions
100
					

450-505 Burrard Street,
Vancouver, V7X 1M3, Canada

IQGeo Systems Limited		
UK
Non-trading
100
					

Nine Hills Road
Cambridge, CB2 1GE, UK

IQGeo Japan K.K.		
Japan Geospatial solutions
100
					
					
					

Level 20 Marunouchi
Trust Tower – Main 1-8-3
Marunouchi Chiyoda-ku,
Tokyo, 100-005, JapanOSPInsight International Inc.		
US Geospatial solutions
100
					

3672 W South Jordan Pkway, Suite 102,South Jordan, UT 84009, United States

All subsidiaries excluding OSPInsight International Inc. are directly held by IQGeo Group plc. IQGeo America Inc. is the immediate
parent company of OSPInsight International Inc. All subsidiaries are 100% owned by the Group.
All subsidiaries prepare local statutory accounts up to 31 December each year.
On 4 February 2021 the business and operations of OSPInsight International Inc. were absorbed into IQGeo America Inc. oncompletion of a legal merger.

90

IQGeo Group plc Annual Report 2020

Financial statements

25 Related party transactions
25.1 Remuneration of key personnel
The key management have been assessed to be the Directors of the Group (Executive and Non-Executive) during the 2020 and2019 periods.
During the year, there was an average number of seven key management personnel (2019: seven) and seven key management
personnel at 31 December 2020 (2019: seven). The compensation paid or payable to key management for employee services isshown below:								2020								
£’000

2019
£’000

Short-term employee benefits		
Wages and salaries								
501

533

Social security costs								
73

87Performance payments								
125

136

Termination payment								—

19Other benefits								88								707783Post-employment benefits		
Contributions to defined contribution pension arrangements						

21

28Share-based payments		
Equity-settled share-based payments								
70

26Total key management compensation

837							798

25.2 Transactions with the Group related parties
There were no other related party transactions with Directors of the Company during 2020 or 2019 other than acquisition of shares
described within the Directors' report.

26 Financial risk management26.1 Risk management objectives and policies
The Group is exposed to various risks in relation to financial instruments. The Group’s financial assets and liabilities by
category are summarised within note 26.7. The main types of risks are market risk (including foreign currency risk), credit risk
and liquidity risk.
The Group’s risk management is co‑ordinated at its headquarters, in close co‑operation with the Board of Directors, and focuseson actively securing the Group’s short to medium-term cash flows. The Group does not actively engage in the trading of financial
assets for speculative purposes. The most significant financial risks to which the Group is exposed are described below.

26.2 Foreign currency risk management
The Group operates globally and undertakes certain transactions denominated in foreign currencies, predominantly in US Dollars(USD), Euros (EUR) and Japanese Yen (JPY), exposing the Group to foreign currency risk. The Group’s risk management policy is
to maintain natural hedges where possible, by matching foreign currency revenue and expenditure. The Group does not enter
into forward exchange contracts to mitigate the exposure to foreign currency risk as the Group’s currency transactions are notconsidered significant enough to warrant this.
Foreign currency denominated monetary assets and liabilities which expose the Group to currency risk are disclosed below.
The amounts shown are those not denominated in the functional currency of the entity, translated into GBP at the closing rate.
Japanese Yen
US Dollars
					
		
				
2020
2019
2020
2019
				
£’000
£’000
£’000
£’000

Euros
2020
£’000

2019
£’000

Assets				3

—

22

413

5

84

Liabilities				
—

(10)

—

(1)

—

—

All foreign currency financial assets and liabilities are classified as current.

IQGeo Group plc Annual Report 202091

Notes to the consolidated financial statements continued

for the year ended 31 December 2020
26 Financial risk management continued
26.3 Foreign currency sensitivity analysis

The following table illustrates the sensitivity of profit and equity in regard to the Group’s financial assets and financial liabilities
and the USD/GBP, EUR/GBP and JPY/GBP exchange rates “all other things being equal”. It assumes a +/- 5% change in the
GBP exchange rate against the relevant foreign currencies.
The sensitivity analysis includes only outstanding foreign currency denominated monetary items and adjusts their translation at
the period end. A positive number indicates an increase in profit and equity.
Japanese Yen
US Dollars
					
		
				
2020
2019
2020
2019
				
£’000
£’000
£’000
£’000

Euros
2020
£’000

2019
£’000

Effect of a 5% appreciation of the local currency: 						
—

(1)

1

22

—

4

Equity				
—

(1)

1

22

—

4

Income statement				Effect of a 5% depreciation of the local currency:					Income statement				

—

—

(1)

(20)

—

(4)

Equity			

—

—

(1)

(20)

—

(4)

Exposure to foreign currency exchange rates varies during the year, depending on the volume of transactions. Nonetheless, theanalysis above is considered to be representative of the Group’s exposure to currency risk.

26.4 Credit risk analysis
Credit risk is the risk that a counterparty fails to discharge a contractual obligation resulting in financial loss to the Group.
The Group’s maximum exposure to credit risk is limited to the carrying amount of financial assets recognised at the reporting date,as summarised in note 26.7, which are principally cash and cash equivalents and trade receivables.
Cash and cash equivalents are held at banks with good independent credit ratings in accordance with the Group Treasury
policy. The Group continuously monitors defaults of customers and other counterparties, identified either individually or by theGroup, and incorporates this information into its credit risk controls. Where available at reasonable cost, external credit ratings
and/or reports on customers and other counterparties are obtained and used. The Group’s policy is to deal only with creditworthy
counterparties.
The Group’s management considers that its financial assets that are not impaired or past due for each of the reporting dates
under review are of good credit quality. All receivables are subject to regular review to ensure that they are recoverable and any
issues identified as early as possible. In order to manage credit risk the Directors set limits for customers based on a combinationof payment history and third party credit references. Credit limits are reviewed by the credit controller on a regular basis inconjunction with debt ageing and collection history. In addition, many of the Group’s customers, and approximately 80% bybalance at any given time, are large telecom utility companies and other blue-chip companies that would be considered a low
credit risk. As a consequence management have determined that there is an immaterial expected credit loss in respect of tradereceivables at 31 December 2020.
The amount of exposure to any single counterparty or a group of counterparties having similar characteristics is subject to a limit,
which is reassessed periodically by management. At 31 December 2020, one customer individually accounted for more than 9%of the gross trade receivables balance (31 December 2019: more than 32%).
None of the Group’s financial assets are secured by collateral or other credit enhancements.
Details of certain trade receivables at 31 December 2020 that have not been settled by the contractual due date but are notconsidered to be impaired are included in note 17.2.

92

IQGeo Group plc Annual Report 2020

Financial statements

26.5 Liquidity risk analysis
Liquidity risk is the risk arising from the Group not being able to meet its obligations as they fall due. The Group seeks to manage
this risk by regularly reviewing forecast inflows and outflows due in day-to-day business and investing cash assets safely andprofitably. The data used for analysing these cash flows is consistent with that used in the contractual maturity analysis below.
Cash flow forecasting is performed at the subsidiary level and aggregated by Group finance. Rolling cash flow forecasts areused by the Group to monitor liquidity requirements to ensure it has sufficient cash to meet operational needs. The Group policy
throughout the year has been to remit surplus working capital balances at the subsidiary level to Group treasury and place on
short-term deposit or interest bearing reserve accounts and distribute funds locally when required.
The Group’s existing cash balances exceed the current cash outflow requirements.
As at 31 December 2020, the Group’s financial liabilities have contractual maturities as summarised below:
Current					 									Between						
Within6 and						
6 months
12 months						£’000£’000

As at 31 December 2020

Non-current
Between
1 and
5 years£’000

Later than
5 years
£’000

			
1,819

—

—

—

Lease obligations						
112

160

1,551

380

Bank loans						
—

167

433

—

Other payables						
—

746

746

—
—

Trade and other payables						As at 31 December 2019				
1,806

—

—

Lease obligations						79Trade and other payables						

—

—

—

Other payables						—

—

—

—

Financial assets used for managing liquidity risk
Cash flows from trade and other receivables are contractually due within three months in the majority of cases. Where surplus
cash deposits are identified these are placed in accounts with access terms of no more than three months.

26.6 Capital risk management
The Group manages its capital to ensure that entities in the Group will be able to continue as a going concern while maximising
the return to stakeholders and to maintain an optimal capital structure to reduce the long-term cost of capital. The capital
structure of the Group consists of cash and cash equivalents and capital and reserves attributable to the owners of the Company.
In order to maintain or adjust the capital structure, the Group may issue shares, take on debt, sell assets to raise cash, adjust theamount of dividends payable to shareholders or return capital to shareholders.
The capital structure is continually monitored by the Group. The Group’s strategy is to have a capital structure that allows
investment in long-term profitable growth, takes into account prevailing trading conditions and seeks to improve balance sheet
efficiency over time. The Group is not subject to externally imposed capital requirements.
The Group has £600,000 bank loan facilities at 31 December 2020 (31 December 2019: £nil).

IQGeo Group plc Annual Report 202093

Notes to the consolidated financial statements continued

for the year ended 31 December 2020
26 Financial risk management continued
26.7 Categories of financial instruments

Details of the significant accounting policies and methods adopted, including the criteria for recognition, the basis of measurement
and the basis on which income and expenses are recognised in respect of each class of financial asset, financial liability andequity instrument, are disclosed in the accounting policies in note 3. The carrying amounts presented in the consolidated statementof financial position relate to the following categories of financial instrument:								2020							
Notes
£’000

2019
£’000

Financial assets				Fair value through other comprehensive income:				
2,500

2,000

– Trade receivables							
17

1,857

1,361

– Amounts recoverable on contracts							

457

336

– Investments							16Amortised cost:				
17

70

68

11,07813,053							15,962

16,818– Other receivables							
17– Cash and cash equivalents							Total financial assets

18

Financial liabilities				Amortised cost:				
– Trade payables							
19

74

272

– Trade accruals							
19

1,741

1,428

– Other payables							
19

4

106

– Bank loans							
20

600

—

– Deferred consideration							
6

746

—

– Lease obligation							
21

1,846

79

Fair value:				
746—							
5,757

1,885

– Contingent consideration							6Total financial liabilities

27 Reconciliation of liabilities arising from financing activities								Lease							Bank loan
liability							
£’000
£’000

Total
£’000

At 1 January 2019							
—

309

309

(238)

(238)

Cash flows:			
Repayment							—Non-cash			
Effect of moving exchange rates							

—

1

1

Interest applied to principal							

—

7

7

At 31 December 2019							
—

79

79

Repayment							
—

(78)

(78)

Borrowings							
662

—

662

Cash flows:			Non-cash			
Effect of moving exchange rates							

(70)

(76)

(146)

New lease entered into							

—

1,753

1,753

Lease related to acquisition							

—

71

71

Interest applied to principal							

8

97

105

At 31 December 2020							

600

1,846

2,446

94

IQGeo Group plc Annual Report 2020

Financial statements

Company balance sheet

for the year ended 31 December 2020								2020							
Notes
£’000

2019
£’000

Fixed assets			
Investments 							
3

1,266

2,384

Current assets			
Current investments							
3

2,000

—

Debtors falling due within one year							

414,721

12,950Debtors falling due after one year							

4

9,936

6,076

Cash at bank and in hand								

8,930

9,851

								35,58728,877

Creditors – amounts falling due within one year						5

(415)

(418)

Net current assets								
35,17228,459Total assets less current liabilities								
36,43830,843

Net assets								
36,43830,843

Capital and reserves			Called-up share capital							
6

1,146

990

Share premium account							722,494

17,454

Share-based payment reserve							7

190

632

Capital redemption reserve							
7

476

476

739

—

11,393

11,291Equity shareholders’ funds								36,43830,843Merger relief reserve							7Profit and loss reserve							

7The notes on pages 97 to 99 are an integral part of the Company financial statements.
As permitted by Section 408 of the Companies Act 2006, the Company has elected not to present its own profit and loss account for
the year. IQGeo Group plc reported a loss for the financial year ended 31 December 2020 of £0.5 million (2019: £6.8 million).
The financial statements were approved and authorised for issue by the Board of Directors on 22 March 2021 and signed on its
behalf by:

Richard Petti		

Haywood Chapman

Chief Executive Officer

Chief Financial Officer

IQGeo Group plc
Registered Number: 05589712

IQGeo Group plc Annual Report 202095

Company statement of changes in equity
for the year ended 31 December 2020

Attributable to equity shareholders					
Share‑based
Capital
			
Share
Share
payment redemption
			 capital
premium
reserve
reserve			£’000
£’000
£’000
£’000

Balance at 1 January 2019			
1,462

Merger		relief
Retainedreserveearnings
Total
£’000
£’000
£’000

46,375

717

—

—

39

48,593————(6,812)(6,812)

—

—

(60)

—

—

60

—

4

27

(6)

—

—

6

31

Capital reduction			—(28,948)———

28,948—(10,950)

Total comprehensive loss for the year			—

Lapse of share options			
Exercise of share options			Repurchase and cancellation of shares			

(476)

—

—

476

—

(10,950)

Reserve credit for equity-settled share-based payment

—

—

(19)

—

—

—

(19)

Transactions with owners			

(472)(28,921)

(85)

476

—

18,064(10,938)

Balance at 31 December 2019			

990

17,454

632

476

—

11,29130,843

Total comprehensive loss for the year			

—

—

—

—

—

(470)

(470)

Exercise of share options			

2

10

(3)

—

—

3

12

Issue of shares			

136

5,030

—

—

—

—

5,166

Issue of shares – acquisition			

18

—

—

—

739	­—

757

Lapse of share options			

—

—

(569)

—

—

569

—

Reserve credit for equity-settled share-based payment

—

—

130

—

—

—

130

Transactions with owners			

156

5,040

(442)

—

739

572

6,065

Balance at 31 December 2020			

1,146

22,494

190

476

739

11,39336,438The notes on pages 97 to 99 are an integral part of the Company financial statements.

96

IQGeo Group plc Annual Report 2020

Financial statements

Notes to the Company financial statements
for the year ended 31 December 2020
1 Principal accounting policies
Basis of preparation
The financial statements of IQGeo Group plc have been prepared in compliance with United Kingdom accounting standards,
including Financial Reporting Standard 102 (FRS 102) and the Companies Act 2006. A summary of the significant accounting
policies which have been reviewed by the Board of Directors is set out below.
The financial statements are prepared under the historical cost convention.
The Company has taken advantage of the following disclosure exemptions in preparing these financial statements, as
permitted by FRS 102, as it is a qualifying entity and its financial statements are included in the consolidated financial statementsof IQGeo Group plc.
• The requirements of Section 4 Statement of Financial Position 4.12(a)(iv)• The requirements of Section 7 Statement of Cash Flows• The requirements of Section 3 Financial Statement Presentation paragraph 3• The requirements of financial instruments paragraphs 11.41(b), 11.41(c), 11.41(e), 11.41(f), 11.42, 11.44, 11.47, 11.48(a)(iii), 11.48(iv),11.48(b) and 11.48(c)• The requirements of Section 33 Related Party Disclosures paragraph 33.7

Share-based payments
The Company issues equity-settled share-based payments to certain employees of its subsidiaries. Vesting conditions arecontinuing employment and can include, for senior employees, a diluted EPS performance target or share price target.
Equity‑settled share-based payments are measured at fair value at the date of grant using an appropriate pricing model.
The share-based payment is accounted for as a capital contribution to the subsidiaries. Investments in subsidiaries are increasedby the aggregate amount of share-based payment with a corresponding increase in equity for the same amount. Information onshare options which have been granted to Directors and employees are given in note 23 to the consolidated financial statements.

Investments
Fixed asset investments are stated at historical cost less any provision for impairment.
The Group assesses investments for impairment whenever events or changes in circumstances indicate that the carrying valueof an investment may not be recoverable. If any such indication of impairment exists, the Group makes an estimate of therecoverable amount. If the recoverable amount of the cash-generating unit is less than the value of the investment, the investment
is considered to be impaired and is written down to its recoverable amount. An impairment loss is recognised immediately in the
profit and loss account.

Debtors
Short-term debtors are measured at transaction price, less impairment. Financial assets are measured subsequently at amortised
cost using the effective interest method less any impairment.

Creditors
Short-term trade creditors are measured at transaction price. Other financial liabilities, including bank loans, are measured
initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest rate.

Deferred taxation
Deferred tax is provided in full on timing differences that result in an obligation at the balance sheet date to pay more tax, or aright to pay less tax, at a future date, at rates expected to apply when they crystallise based on current tax rates and law. Timing
differences arise from the inclusion of items of income and expenditure in taxation computations in periods different from those inwhich they are included in financial statements. Deferred tax assets are recognised to the extent that it is regarded as more likely
than not that they will be recovered. Deferred tax assets and liabilities are not discounted.

Critical accounting judgements and key sources of estimation and uncertainty
The Group makes estimates and assumptions concerning the future. The resulting accounting estimates will, by definition, seldom
equal the related actual results. The estimates and assumptions that have a significant risk of causing a material adjustment tothe carrying amounts of assets and liabilities within the next financial year are addressed below.
The Group is loss making and this is an indicator that amounts due from subsidiary undertakings may not be recoverable.
In undertaking recoverable value reviews, management is required to make assumptions of the future cash flows generated
from its subsidiaries. This includes consideration of both the current business pipeline and estimations beyond the existing
pipeline, and timing of expected settlement of balances.

IQGeo Group plc Annual Report 202097

Notes to the Company financial statements continued

for the year ended 31 December 2020
2 Profit and loss account

The Company does not have any employees (2019: nil). Directors’ emoluments are disclosed within the Remuneration Committee
report on page 50 to 52 of the Corporate governance report. The Directors were not remunerated by IQGeo Group plc.
Auditor's remuneration attributable to the Company is as follows:								2020								
£’000

2019
£’000

85

70

Audit fee – statutory audit								Other services								—

—								85703 Investments							Investments 		
							inOther							subsidiaries investments
Total							
£’000
£’000
£’000

Cost and net book amount			
At 1 January 2020							

384

2,000

2,384

Shares issued for acquisition consideration						

757

—

757

Capital contribution relating to share-based payments					

125

—

125

At 31 December 2020							
1,266

2,000

3,266

Presented as
Fixed asset investments							
1,266

—

1,266

Current investments							
—

2,000

2,000

Total investments							
1,266

2,000

3,266

Capital contribution and impairment
As part of the sale transaction of the RTLS SmartSpace business unit, the Group holds a rollover investment in Abyssinian Topco
Limited. Within the Company financial statements the investment is recorded at cost. On 29 December 2020, the Group enteredinto an agreement to sell its shares in Abyssinian Topco Limited during January 2021 for a consideration of £2.5 million. As at
31 December 2020, the investment has been reclassified as a current investment.
The Company issued 923,294 ordinary 2p shares during the year as part of the consideration paid for the acquisition of OSPI by
IQGeo America Inc.
Capital contributions relating to share-based payments arise because the Company has granted share options to the employeesof its various subsidiaries.
The Group is loss making and this is an indicator for potential impairment of its investments. Management have completed
impairment reviews through estimating the future discounted cash flows to be generated from these assets and concluded thatno further impairment is required as the cash flows are expected to exceed the value of the investment.
Further information about subsidiaries is provided in note 24 of the consolidated financial statements.

4 Debtors								2020								
£’000

2019
£’000

Debtors falling due within one year:		
14,721

12,950

9,936

6,076

Total debtors								24,65719,026

Amounts owed by subsidiary undertakings								Debtors falling due after one year:		
Amounts owed by subsidiary undertakings								Interest is charged on debtors falling due after one year at a rate of 3.5% plus LIBOR on the balance owed.
Amounts owed by subsidiary undertakings are unsecured.
During 2020, a provision of £nil million was made against amounts owed by subsidiary undertakings due within one year
(2019: a provision of £6.8 million was made). The provision as at 31 December 2020 was £6.8 million (2019: £6.8 million).

98

IQGeo Group plc Annual Report 2020

Financial statements

5 Creditors: amounts falling due within one year								2020								
£’000

2019
£’000

Trade accruals								
—

3

415

415

								415418Amounts owed to subsidiary undertakings								6 Share capital			2020		
2019		
2020		2019
			
Number		
Number		
£’000		£’000

Allotted, called up and fully paid				Ordinary shares of £0.02 each			57,312,252		
49,503,429		
1,146		990Movements during the year are disclosed within note 22 to the Group accounts.

7 Reserves
Share capital and share premium
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares are shown in equity as
a deduction, net of tax, from the proceeds. The nominal value of shares issued is classified as share capital and the amounts paid
over the nominal value in respect of share issues, net of related costs, is classified as share premium.

Share-based payment reserve
The share-based payment reserve relates to a cumulative charge made in respect of share options granted by the Company to
the Group’s employees under its employee share option plans.

Capital redemption reserve
The capital redemption reserve relates to the repurchase and subsequent cancellation of ordinary share capital.

Merger relief reserve
The merger relief reserve relates to the issue of shares as consideration for acquisitions of direct or indirect 100% owned subsidiaries
within the Group.

Retained earnings
Retained earnings include all current and prior period retained profits/losses.

8 Related party transactions
The Company takes advantage of the exemption under FRS 102 for transactions with wholly owned Group companies. There wereno other related party transactions, other than the acquisition of shares described in the Directors' report.

IQGeo Group plc Annual Report 202099

Advisers
Registered office
IQGeo Group plc

AuditorGrant Thornton UK LLP

Nine Hills Road
Cambridge
CB2 1GE
Tel: +44 (0)1223 606 655
Website: www.iqgeo.com

Cambridge Office
101 Cambridge Science Park
Milton Road
Cambridge CB4 0FY

Nominated advisers and brokers
finnCap Limited
60 New Broad Street
London EC2M 1JJ

Lawyers
Mills & Reeve LLP
Cambridge OfficeBotanic House
98-100 Hills Road
Cambridge CB2 1PH

100

Registrar
Computershare Investor Services
PLC
The Pavilions
Bridgwater Road
Bristol BS99 6ZZ

BankerHSBC Bank plc
50-60 Station Road
Cambridge CB1 2JH

IQGeo Group plc Annual Report 2020

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United Kingdom
IQGeo Group plc
Nine Hills Road
Cambridge CB2 1GE

Germany
IQGeo Germany GmbHFriedrich-Ebert-Anlage 49
60308 Frankfurt am Main

Canada
IQGeo Solutions Canada Inc.
#19 - 3034 Edgemont Blvd.
North Vancouver, B.C. V7R 2NO

Denver, USA
IQGeo America Inc.
1670 Broadway, Suite 2215
Denver, CO 80202
United StatesJapan
IQGeo Japan KK
Level 20 Marunouchi Trust Tower
1-8-3 Marunouchi Chiyoda-ku Tokyo
100-0005

Salt Lake City, USA
OSPInsight – An IQGeo business
3672 W South Jordan Pkwy, Suite 102
South Jordan, UT 84009
United States

Youtube/IQGeo@IQGeo_software
LinkedIn/IQGeo

Visit us online

www.iqgeo.com