1、SimplicityBoku,Inc.Annual Report and Accounts for the year ended 31 December 2021Boku,Inc.Annual Report and Accounts for the year ended 31 December 2021ContentsGovernanceBoard of Directors.26Senior Management.28Corporate Governance Report.30Audit Committee Report.38Remuneration Report.41Environmenta
2、l,Social and Governance Report(ESG).47Directors Report.52Directors Responsibilities Statement.54FinancialsIndependent Auditors Report.55Consolidated Statement of Comprehensive Income.62Consolidated Statement of Financial Position.63Consolidated Statement of Changes In Equity.64Consolidated Statement
3、 of Cash Flows.65Notes to the Consolidated Financial Statements.66Strategic ReportChairmans Statement.3Chief Executive Officers Report.10Chief Financial Officers Report.14Principal Risks and Uncertainties.20Our customersBoku provides a global mobile payments network,M1ST (mobile-first),which reaches
4、 over 7 billion consumer payment accounts in more than 90 countries worldwide.In 2020,mobile payments overtook card payments for eCommerce purchases globally.For billions of consumers,especially those younger and in emerging markets,paying with a plastic card is outdated,inconvenient,or out of reach
5、.Boku integrates and processes mobile payments for 500+merchant customers,including six of the seven most valuable companies in the world.Bokus M1ST Payments Network enables merchants to accept over 340 payment methods,including eWallets,Real-Time Payments,and Direct Carrier Billing,through a single
6、 integration.Boku empowers its merchants to grow their businesses in every corner of the globe,with payments that reach mobile-first consumers,targeted marketing programs that attract,engage,and retain digital subscription users,and merchant services that ease the complexities of global settlement,c
7、ompliance,tax,and fraud mitigation.To learn more about Boku,as well as obtain the latest information of interest to investors and stakeholders,please visit our website at .1Stock code:BOKUBoku Inc Annual Report and Accounts for the year ended 31 December 2021HighlightsRevenue($USD millions)Payments
8、Identity8070605040302010302520151050(5)(10)(15)EBITDA($USD millions)20172018201920202021201720182019202020212.52.01.51.00.5Average Daily Active Users(millions)+30%0.350.731.101.572.04987654321TPV($USD billions)+18%1.73.65.06.98.220172018201920202021+31%+23%201720182019202020212Boku Inc Annual Report
9、 and Accounts for the year ended 31 December 3Stock code:BOKUBoku,Inc.Annual Report and Accounts for the year ended 31 December 2021Chairmans StatementI am pleased to report on another highly successful year of record revenues and Adjusted EBITDA for Boku in 2021.Having founded Boku in 2009 and serv
10、ed as Chairman since 2014,I believe now is the right time to step down from the Chair to become a Non Executive Director at the forthcoming Annual General Meeting.The Chair will be in fine hands with Richard Hargreaves stepping up from Senior Independent Non-Executive Director(SID)to become Chairman
11、 with Stewart Roberts becoming the new SID.Such moments of transition are times to take stock and reflect.There are many successful companies listed on public markets,but they represent only a fraction of those that started out,like us,with an idea and bucketloads of hope,energy and resilience.Most
12、new companies fail or are taken over,rare it is to make it to the public markets.And,in Boku,we were able to stay true to our initial vision:to build a global payment mechanism out of connecting the mobile network operators of the world.Our plan was to connect directly to their billing systems(Direc
13、t Carrier Billing or DCB)to come up with a platform equivalent to the payment networks built by the card schemes.With the growth in mobile and digital entertainment,Boku has been able to develop ways not only to monetise users but also to simplify their recruitment.This insight allowed us to transfo
14、rm the way we worked,progressively persuading digital entertainment companies to hire us to help them grow.It didnt come in a straight line.There were near death experiences,but by 2017 we were established and ready for life as a public company.Since then weve been able to grow substantially:The val
15、ue processed through the system increased nearly five fold from$1.7 billion in 2017 to$8.2 billion in 2021.Monthly Active users have quadrupled from eight million to more than 32 million.Revenues have grown from$17 million in 2017 to just under$70 million in 2021 and we moved from EBITDA losses of$2
16、.3 million in 2017 to 2021s EBITDA profit figure of$20.0 million.But I believe Bokus best days lie in front of it.In 2021 we launched our Mobile First(“M1ST”)Payment Network,which gives our merchants the opportunity to reach seven billion end user accounts.Four billion of those are Direct Carrier Bi
17、lling connections,the remaining three billion are from other payment methods like eWallets and Real-Time Payments.It is these latter ones which represent the future.While DCB is growing steadily,these new payment products are more popular and are used to buy a wider variety of merchandise.It is righ
18、t that we have sold the Identity business despite its improving performance,so as to focus the attention on the opportunities that these new local payment methods offer.They will be the motor that drives the Company to new heights.It has been my honour to serve as Chairman and to help steer the Comp
19、any.As I step back to become a Non Executive Director and hand over the reins to Richard Hargreaves,I will continue to contribute to the Company as it writes a new chapter over the next few years which,I have every confidence,will be even more exciting than the last decade.Mark BrittoNon-Executive C
20、hairman28 March 20224Boku,Inc.Annual Report and Accounts for the year ended 31 December SimplicityIn 2017 when Boku listed its shares on AIM,we referred to ourselves as a direct carrier billing(DBC)company,expanding more broadly into carrier commerce.We understood that the value in our company was n
21、ot so much in the code on our platform,but rather in the network that we assembled.Harnessing the collective capabilities of the worlds mobile network operators is hard.Each uses its own non-standardised technology and connecting for a merchant one-by-one would be complex,time-consuming and,for all
22、practical purposes,commercially unsustainable.Imposing a single standard across this global network of non-standardised carrier billing payments connections was simply too complex and never going to happen.Our mission therefore was to simplify;to provide a solution in which merchants would integrate
23、 once and gain access to many mobile operators.We developed and refined our ability to engage with mobile network operators and make them seem like regular payment methods to our large merchants.We simplified.But,more than that,we took things down to their essence.We became successful because we foc
24、used on the merchants requirements.We didnt simply take the capabilities that the mobile network operators offered.Instead,we worked closely with our merchants,developing the standards they required from payment methods.We worked tirelessly with our mobile operator partners to ensure that they met t
25、he needs of merchants,not the other way around.Simplifying is not simple.BOKU STRATEGIC REPORTIn the BeginningSteve Jobs famously understood the value of making complex things simple.He is quoted as saying:“Thats been one of my mantrasfocus and simplicity.Simple can be harder than complex:You have t
26、o work hard to get your thinking clean to make it simple.But its worth it in the end because once you get there,you can move mountains.”He charged his designers to study Picassos picture of The Bull to see how the complex can be stripped down to its essentials.For him,everything had to be reduced to
27、 its essence.We can see that influence in the design of Apples consumer products.It is also a philosophy focus and simplicity that informs Bokus approach.5Stock code:BOKUBoku,Inc.Annual Report and Accounts for the year ended 31 December 2021The flywheel,the scale playerThe light bulb moment was the
28、realisation that the unique benefit of DCB was not primarily about moving money,rather it was the ability to acquire new users with a single tap on a mobile phone which then charged purchases to the phone bill.Since mobile operator partners already knew the phone numbers of billions of their subscri
29、bers,we could uniquely streamline customer onboarding.To merchants,the value of DCB is as a highly effective customer acquisition tool.Once Boku had proven the unique value and capabilities of carrier billing,a flywheel started to spin.Our payments network grew as operators wanted to accept payments
30、 on behalf of our merchants,and our growing payments network began to attract more and larger global merchants.And so the flywheel turned.The more it turned,the network effects we had created made it more difficult for others to compete with Boku,and within a few years,we had become the scale player
31、 in carrier billing as most of the worlds largest digital merchants used Boku for DCB,largely on an exclusive basis.In platform businesses,the scale player has considerable advantages.With the incremental cost of processing a transaction essentially zero,the platform with the largest transaction vol
32、umes can simultaneously be the lowest-cost player,whilst carrying the expense base that allows them to develop features that their competitors are not able to replicate.Boku has established itself as the worlds leading DCB company.We process,mostly on an exclusive basis,mobile payments for all of th
33、e worlds largest digital entertainment companies:Amazon,Apple,Epic Games,Meta Platforms(Facebook),Microsoft,Google,Sony,Spotify,Netflix,Tencent,Activision Blizzard.However,we havent stopped there.“Growth is the only evidence of life”-Cardinal NewmanWe had a good runway of growth in front of us.Due t
34、o the complexity of deploying sophisticated carrier billing connections,it had not proved possible to immediately switch on all networks for all merchants.Rather,this must be scheduled with both the carrier and merchant.A steady roll out has delivered double digit revenue growth rates and much faste
35、r EBITDA growth for the past five years and,with the average merchant using only 10%of the network,there is plenty of growth still to come.But on the horizon,there was a cloud no bigger than a mans hand.Its an unavoidable reality that direct carrier billing is a niche payment instrument.An unparalle
36、led user acquisition tool DCB may be,but the majority of people who buy digital entertainment products and services are not going to charge it to their phone bill.Saturation for carrier billing as a payment method comes,it seems,at about 15%:the other 85%is paid for by other means.Moreover while,DCB
37、 works well in the digital entertainment industry,it is ill suited to other sectors.Consumers dont really want to charge types of product or service to their phone bill.Digital entertainment is a big and growing market,but it only accounts for about 5%of online spending.Our Total Addressable Market
38、was limited.If we wanted to grow faster,we needed to find new markets.It was not enough for us to be the big fish in a small pond.We wanted to swim in the Big Pond.6Boku,Inc.Annual Report and Accounts for the year ended 31 December In the Beginning.Which pond?We contemplated two approaches.We could
39、either utilise our carrier network and find new uses for our carrier connections,or we could find new payment products to grab a larger share of our existing merchants sales.So double down on our suppliers or our customers?That was the choice.In fact,as we drew up our plans,we realised that we didnt
40、 have to choose;we could do both.Carrier CommerceBoku Identity resulted from a desire to address a large and growing market the verification of mobile transactions,using mobile network operator capabilities.Very often when undertaking a mobile transaction,the provider will want to know the phone num
41、ber of the device with which they are interacting or its registered owner.Who better to ask than mobile network operators themselves?In 2019,Boku bought Danal for$25.1million to kick start our entry into this industry,renaming it Boku Identity.Despite setbacks in 2020 when we suffered an interruptio
42、n to our carrier connectivity in the critical US market,we stuck to our guns,built out new connections in Europe and Asia,and added new customers.The business bounced back in 2021,posting revenue growth of 37%.We had found a formula,but to develop things further needed significantly more investment.
43、New Payment Methods for our MerchantsThe second strand of our growth plan was to integrate new payment methods into our network,selling them to our existing merchants.One route for growth was from expansion in the direct carrier billing segment.In 2020,we acquired Fortumo,cementing our position as t
44、he DCB market leader.But theres only so much consolidation that can be done in DCB.Bokus core competence has been in simplifying the complex.In taking the disparate set of different mobile network operator platforms and integrating them in such a way that a merchant can connect to us once and get ac
45、cess to the whole suite of them,without having to worry about the underlying differences.In the world of payment cards,standardisation has been around for years,driven by the card schemes.There is in fact an international standard ISO 8583 which defines how card payments are processed.Switching cost
46、s are low,leading to the emergence of super high-volume commoditised processors,competing on price.We ran a mile from this part of the payment processing business.Therefore,in order to grow faster,we sought out other payment types that were similarly unstandardised,yet which were popular-and in eWal
47、lets we found them.Payments are in a period of significant change.Whilst in the West,credit and debit cards have long been the dominant means of payment,in the newly developed markets of Asia,the Middle East,Africa and Latin America,the card habit tended to be confined to old money.In those places,s
48、pending with cards was not the reflex for most merchants or consumers.For sure,as they got richer,people got bank accounts,but when it came to buying online,entrepreneurial companies sprang up to provide them with modern tools based around the mobile phone.This mobile device knows where you are,can
49、see,can authenticate you,and provide simple ways of displaying and analysing your spending.It was a no-brainer.Freed from the constraints of a rectangular piece of plastic,eWallets provide better ways of paying and have become enormously popular,particularly in Asia,to the extent that most of the wo
50、rlds eCommerce now takes place using them(albeit with a significant skew to China).Boku started integrating eWallets in Indonesia and started to sell them to our customers.We found that the uptake was good,which encouraged us to invest further.Merchants who had previously just used us as a specialis
51、t Direct Carrier Billing company were prepared to see us as a Local Payment Method(LPM)company.Bokus core competence has been in simplifying the complex.7Stock code:BOKUBoku,Inc.Annual Report and Accounts for the year ended 31 December 2021Boku has continued to invest in growing its network,now styl
52、ed as our Mobile-First Payment Network,or M1ST,to such an extent,that it now reaches seven billion end-user accounts in 91 countries.Approximately 3 billion of these end-user accounts are from the new payment methods.eWallets and Real-Time Payments are no longer a minor part of Bokus business more t
53、han 1.1 million monthly active users paid with eWallets or Real-Time Payments in December 2021 a figure that grew nine-fold during the year.The Big Pond is a lot bigger:According to eMarketer,global eCommerce in 2021 totaled$4.89 trillion.This compares with estimates of the digital entertainment ind
54、ustry,for which DCB is best suited,of approximately$300 billion.Bokus competitive strengthsGiven its size,its not surprising that the Big Pond is full of big fish.Generalist payment processors like Worldpay and Adyen along with specialist players like dLocal and Rapyd.Companies with valuations many
55、times Bokus.Companies with larger headcounts.So how does Boku compete?Its the same formula.Build a good product,focus on the customer,help them to improve their business and you can grow.Its not the big that beat the small,its the fast that beat the slow.Boku focuses on building out wider coverage a
56、nd stronger product features to compete,and this takes investment.We also continuously improve our platform:with an immediate focus on settlement capabilities,resellers,and improving the onboarding experience.We need to expand and support our network of licences Boku has already extended its capabil
57、ities to process regulated payments into 50 countries,with licences in the UK,Ireland(passported across the EEA),Singapore,Hong Kong,and with applications and partnerships in several other countries.8Boku,Inc.Annual Report and Accounts for the year ended 31 December In the Beginning.Sale of Identity
58、 and focus on PaymentsDuring 2021 it became clear that both of our new business lines needed investment.We had a winning formula in Identity,but we needed more coverage to help us grow.We had a winning formula in Payments,but that part of the business too needed investment.Back in 2019 we didnt have
59、 to choose.Now we do.We chose to focus all our efforts on the Payments business,where we have a proven track record and are aiming at a larger total addressable market.While there was no committed plan to sell in 2021,we sold our Identity business to Twilio after the period close in February 2022 de
60、tails of this transaction are described elsewhere in the report.Twilio will be able to give Boku Identity the investment and attention that it needs.Boku,therefore,enters 2022 as a pure-play payments business.We will focus on Boku and Fortumo as one integrated,cohesive,payments unit ready to grow it
61、s business in mainstream payment methods.The main planks of our strategy are as follows.We will expand the M1ST network to encompass the leading Local Payment Methods like eWallets in the countries where the new middle class resides.We will build the highest quality connections enabling merchants to
62、 sell more stuff.Our products will be expanded beyond the requirements of the digital entertainment industry,also to embrace other merchant sectors,including digital advertising,software,travel,and general ecommerce.We will enhance our regulated payment and settlement capability to allow us to help
63、our merchants not only to process transactions,but also get settled in the currency of their choice with the frequency and speed they wish.Our competitive advantage stems from three areas1.We will maintain our reputation amongst the worlds largest merchants for flawless execution and merchant-centri
64、c solutions.There are practically no other companies on earth who have been able to simultaneously support Amazon,Apple,Google,Microsoft,Netflix,Spotify,Facebook,and Tencent amongst others.This reputation is hard-won and will be defended.Looking after our customers helps us get more of their busines
65、s and helps us win more customers too.2.As well as supporting the biggest Local Payment Methods,we will also ensure that we have unique capabilities.This might be licenses that none of our competitors have,or connectors giving us more coverage,but we will ensure that there are some things that you c
66、an get from Boku that you wont be able to get from anyone else.3.We will differentiate our product by producing features that help our merchant sell more.Most payment companies are interested in processing more and more volume,we obsess about helping our customers to acquire and retain users.This le
67、ads us to develop features that are more to do with marketing optimisation of the enrolment process,prompts to users to renew if a payment fails,integrations directly into our merchants and suppliers marketing,and point of sale systems to allow bundled offers between the two to drive growth.Other pa
68、yment companies dont do this.Our bundling product drives new user adoption for digital subscription services,from music and video streaming to dating apps and beyond.The future for Boku is exciting.A future where we continue the transition from being the leading player of a niche payment method,DCB,
69、to providing mainstream payments to mainstream merchants.A future where we swim in the Big Pond.A pure-play payments business9Stock code:BOKUBoku,Inc.Annual Report and Accounts for the year ended 31 December 202110Boku,Inc.Annual Report and Accounts for the year ended 31 December How can a new payme
70、nt method help a merchant make more sales?It can unlock access to new users who simply cant pay with traditional payment methods like credit and debit cards(particularly relevant given the dominant payment method in much of Asia is now eWallets and not cards).It has a better user experience,enabling
71、 greater conversion on microtransactions(whereas higher friction methods will lead to higher rates of abandonment).It increases purchase values by offering credit,or buy now,pay later functionality.It increases purchase frequency due to a loyalty scheme.In all of these cases,it is the prospect of ex
72、tra sales that impels the merchant to make the effort of deploying a new payment method.In the case of Boku,we enable our merchants to sell more by helping them to more easily and cost effectively acquire new users.Our Direct Carrier Billing(DCB)service acquires new users through reach more people h
73、ave phones than bank accounts,and also through simplicity its easier to make a purchase with a single tap,than having to laboriously type in your card details.Our local payment method business provides the same benefits.It allows users to pay with their preferred method.Many of the emergent middle c
74、lasses of Asia,the Middle East,Africa and Latin America dont have payment cards(even though,in the main,they do have bank accounts).Having previously made their purchases in cash,as they acquired mobile devices,they use mobile native payment methods,like eWallets,to buy things online.If you want to
75、sell to these people,you have to support the payment methods that they actually use.It is for this reason that the New User metric that stands front and centre for Boku.As far as I know,we are the only payment company that focuses on this metric.Others brag about the value that they process or the n
76、umber of transactions that flow through their systems.Our focus is on the things that matter to our customers.The second year of the pandemicChief Executive Officers ReportDespite being in the second year of the pandemic,it was another year of significant progress for Boku as we navigated choppy wat
77、ers to continue our record of growth,in spite of continuing distortions to normal life and trading patterns.Our Group revenues grew by 23%to exceed$69 million.Profitability,measured through the Adjusted EBITDA measure,increased by 31%to$20 million.We battled some currency headwinds in the year the J
78、apanese Yen and Korean Won were both down by more than 10%against the US Dollar had exchange rates stayed constant our results would have been better yet.Boku PaymentsThe Payments division performed well in 2021.In December 2021,32.3 million users made one or more transactions on our platform,up fro
79、m 28.8 million a year earlier.Taking the year as a whole,on average,every day more than 2 million users were making purchases on Bokus platform.The spending of these users translated into revenues up 21%to$62.1 million as we saw total processed value(TPV)increase 18%to over$8.2 billion(2020:$6.9 bil
80、lion)and Payments EBITDA grow to$22.9 million(37%EBITDA margin)in 2021.Merchant FocusIts quite deliberate that I started the review of Bokus Payments division by reference to the number of new users that wed helped our merchants to acquire.Any chief executive will tell you that the key to their succ
81、ess comes from focusing on their customers needs.Its become a platitude.Key to Bokus success is a focus not just on the nuts and bolts of payments although that is important it is that we try to look through the what to the why.Why would a merchant want to give their users more ways to pay?When you
82、boil it down,there is one overriding reason why merchants are driven to support a new payment method.Its not because its more secure,or even because its cheaper than the alternative price can be negotiated.The real reason why a new method gets established is due to its ability to help the merchant s
83、ell more.11Stock code:BOKUBoku,Inc.Annual Report and Accounts for the year ended 31 December 2021Subscriptions driving change in PaymentsWhat do the following have in common?Toothbrushes,music,toilet roll,snacks,cosmetics,random vegetables and video?You can buy them on subscription services.One-off
84、purchases are being superseded by subscriptions because of the benefits to both buyers and sellers.Buyers get the latest products conveniently;sellers get predictable revenue streams.To meet this changing pattern of commerce,payment methods also have to adapt:new features need to help in customer ac
85、quisition,simplify repeat purchases,and boost customer retention.This is one of the things that differentiates Boku.Our products are optimised for the age of subscriptions.Our bundling products support co-marketing between brands,our customer onboarding technology allows consumers to sign up with a
86、single tap,and our messaging capabilities can prompt users whose renewals have failed.Direct Carrier BillingBoku has established itself as the leading Direct Carrier Billing company in the world.Our solutions are proven with worlds largest digital companies:Amazon,Apple,Google,Sony,Microsoft,Meta Pl
87、atforms(Facebook),Netflix,Spotify,Tencent,Activision,Epic Games and DAZN all use our carrier billing or bundling services,many on an exclusive basis.Growth in the DCB business can be driven by the expansion of Bokus network of mobile network operators and,more importantly by the expansion of the mer
88、chants usage of that network.With the average merchant connected to 10%of the carriers in the network,there is 90%still to go for.Plenty of room to grow.Larger Market with Local Payment MethodsThe Company will carry on benefiting from growth in DCB,but the Total Addressable Market(TAM)from deploying
89、 local payment methods such as eWallets and Real-Time Payments could be fifty times larger.Direct Carrier Billing helps grow digital entertainment,but is ill-suited to other types of merchants,such as consumer durables,transportation or foodstuffs.Its also a supplementary method,with an effective ce
90、iling:In practice no more than around 15%of even a digital merchants sales will be charged to the phone bill.The larger TAM comes from supporting the payment methods that consumers and businesses use for all of their daily purchases.In the West,that daily payment method is generally a credit or debi
91、t card,but in most of the rest of the world,consumers instead rely on eWallets and Real-Time Payments to buy things online.12Boku,Inc.Annual Report and Accounts for the year ended 31 December Launch of M1ST2021 was the year in which Bokus efforts to expand beyond DCB into these mainstream methods of
92、 payments eWallets and Real-Time Payments-started to bear fruit.We launched M1ST,our mobile-first payment network,and recently expanded its reach to over seven billion accounts in more than 90 countries.Four billion are connections to mobile phone accounts,and,impressively,three billion are for othe
93、r mainstream local payment methods.These mainstream payment methods are regulated:we have also put significant effort into expanding our ability to process regulated payments,ending the year with a network spanning 50 countries.Boku is now regulated as a payment provider in Hong Kong,allowing us to
94、process in China;in Singapore,where we have a Major Payment Institution Licence;we have a specific authorisation from the Reserve Bank of India allowing us to provide services to foreign merchants and a network of other authorisations and partners allows us to undertake regulated payments in 50 coun
95、tries.These are capabilities which will help fuel our growth in future years.By the end of the year,the number of monthly active users on these mainstream methods was more than 1.1 million.In absolute terms,this is a significant milestone,but when set against the groups total of more than 32 million
96、,it was still relatively small.Looking only at new users,non-DCB was more significant with 2.7 million new users making their first-ever transaction with Boku at some stage during the year,compared to the annual new user total of 28 million(9.6%).Non-DCB users(eWallets adnd Real-Time Payments)grew n
97、ine-fold during the year and it is this rate of growth that is encouraging.We have been able to win significant new deals against much larger companies.Boku has been selected to provide local payment services to the worlds leading digital advertising platforms,console games providers,video and music
98、 streaming services,as well as several gaming companies.Were winning those deals because we typically have wider coverage of relevant payment methods and a wider list of features that matter to our merchants,including support for subscriptions.13Stock code:BOKUBoku,Inc.Annual Report and Accounts for
99、 the year ended 31 December 2021Sale of Boku IdentityBoku acquired Danal Inc.,a US-based provider,in 2019 for total consideration of$25.1 million and renamed it Boku Identity.As mobile commerce grew,there was increasing demand for a service that could easily identify phone numbers and phone owners.W
100、ith our network of mobile operators,we felt we were well placed to build a global business.The division posted improved results in 2021 as the strategy of building a global network started to pay off.Revenues were up 31%to exceed$7 million and losses fell to below$3 million.However this success also
101、 posed a dilemma:further growth would require further investment,at precisely the moment when our Local Payment Methods were gaining traction and required investment.Ultimately we resolved the dilemma by selling Boku identity to Twilio for a transaction value of$32.3 million in February 2022.I want
102、to place on record my thanks for the work of the Boku Identity team and management.Twilio will be a good owner of the business,one that can provide it with the investment and support that it needs to grow faster.At the same time,it allows Boku to concentrate on its Payments offering.Board ChangesAt
103、this years Annual General Meeting,our Chairman,Mark Britto,who founded the Company and served as its first CEO,has decided to relinquish the Chair,though he will remain on the Board as a Non-Executive Director.I want to place on the record my thanks for his wise counsel and leadership.Under his stew
104、ardship,the Company has grown considerably,and I am very grateful to have continued access to his experience and input.I am also indeed fortunate that the Company has a worthy successor in Richard Hargreaves.Richard has served on the Board since 2016 and knows the Company well,having also served on
105、the Audit Committee and as Chairman of the Remuneration Committee.I am delighted to welcome him to his new position.Ukraine situationRussias attack on Ukraine is a tragedy for the people of that country.Although we have no employees or operations in Ukraine,we have a number of Ukrainian employees.Th
106、eir families are uppermost in my thoughts.Boku has made a donation to support relief efforts;employees have also responded generously.Boku will further match their donations.Commercially,we have no Russian merchants,nor assets in Russia.Nor do we have Belarussian or Ukrainian ones.We do have connect
107、ions to Russian carriers as we have connections in 90 other countries and,before the war,used them to process transactions for 24 merchants.Almost all of them have stopped processing.Revenues from Russia,Belarus and Ukraine are not material.Given the fluid situation,the precise impact is difficult t
108、o estimate with certainty,but the worst case is approximately 2%of revenues in 2022.Summary and OutlookWe are pleased with our performance in 2021.Going forward,2022 will see the emergence of Boku as a pureplay payments company,with the leading position in Direct Carrier Billing and rapid growth in
109、other local payment methods,such as eWallets and Real-Time Payments.We will invest further in building out our network and systems.This year we will broaden our M1ST network,grow existing merchants,recruit more new merchants who do not use us for DCB and expand into new territories.Non DCB payments
110、will,for the first time,be a material part of our growth.Trading so far this year has started well with growth on eWallets and Real-Time Payments to the fore.MAUs on these methods exceeded 1.4m in February-ten times the figure a year before.Our cash balances are strong and I look forward to the rema
111、inder of 2022 and beyond with considerable confidence.Jon PrideauxChief Executive Officer28 March 202214Boku,Inc.Annual Report and Accounts for the year ended 31 December Group results2021 was another year of significant progress and achievement for Boku,despite continued challenging circumstances g
112、iven the coronavirus pandemic and significant currency headwinds affecting the Payments division.Good revenue growth in both Payments and Identity saw Group revenues increase 23%to$69.2 million which in turn drove an increase of 31%in group Adjusted EBITDA*to$20.0 million(2020:$15.3 million*)and a n
113、et Profit before tax of$4.4 million(2020:$17.3 million loss).After the year end an agreement was reached with Twilio,Inc.(“Twilio”),the leading cloud communications platform,to acquire Bokus Identity division comprising its wholly-owned subsidiary Boku Identity,Inc.,as announced on 19 January 2022,f
114、or a maximum consideration of$32.3 million payable in cash and the transaction was closed on 28 February 2022.This enables Boku to focus on its core Payments business and building out the M1ST payments network.Group Revenue and Gross MarginsGroup revenues for the year increased by 23%to$69.2 million
115、(2020:$56.4 million)as the Company saw good growth in both its Payments and Identity businesses,while blended gross margins for the group increased slightly to 91.7%(2020:91.3%)Group Operating ExpenditureAdjusted Operating Expenditure(Operating Expenditure adjusted for depreciation,amortisation,fore
116、ign exchange,stock option expense,exceptional items,goodwill impairment and restructuring costs)increased to$43.3 million(2020:$36.2 million),partly driven by the full year effect of the Groups acquisition of Fortumo in July 2020 but also due to investment into building out Bokus mobile first Paymen
117、ts network(M1ST)adding capabilities in eWallets and Real-Time Payments in the second half as flagged previously.Chief Financial Officers ReportStrong Revenue and Adjusted EBITDA growthThe Payments divisions adjusted operating expenditure increased to$37.6 million(2020:$27.6 million)due to a number o
118、f factors including the full year effect of the acquisition of Estonian based Fortumo in July 2020,payroll increases,and some costs incurred in completing the migration of Bokus Payments platform into a cloud based environment(AWS).Identity adjusted operating expenditure remained stable at$5.8 milli
119、on(2020:$5.8 million).Both divisions benefited from continued material savings in travel and entertainment due to the impact of COVID-19 which reduced operating expenditure and increased Adjusted EBITDA,but it is expected that this expenditure will return to previous levels as it becomes possible to
120、 travel freely again.15Stock code:BOKUBoku,Inc.Annual Report and Accounts for the year ended 31 December 2021Highlights Group financial highlights Group revenues increased by 23%to$69.2 million(2020:$56.4 million*).Group Adjusted EBITDA*up 31%to$20.0 million(2020:$15.3 million).Net Profit before tax
121、 of$4.4 million(2020:$17.3 million loss).Closing cash balances were$62.4 million at 31 December 2021(including restricted cash balances of$5.8 million)up from$48.6 million on 30 June 2021.Monthly average cash balances,which smooth the impact of intra-month flows of both carrier and merchant payments
122、,were$50.8 million in December 2021 up from$38.0 million in June 2021.Cash generated from Operations before working capital changes during the year was$19.5 million(2020:$11.5 million).Payment division highlights Payments division revenues up 21%to$62.1 million(2020:$51.2 million*).Payments division
123、 Adjusted EBITDA of$22.9 million(2020:$19.2 million).Monthly Active Users grew by 3.5 million to 32.3 million in December 2021(December 2020:28.8 million).Total Payment Volume(TPV)*up 18%to$8.2 billion in 2021 compared to$6.9 billion in 2020.Continued progress in building out Bokus mobile first paym
124、ents network M1ST which now reaches over seven billion end user accounts.Four billion of those are Direct Carrier Billing connections,three billion are from other payment methods like eWallets and Real-Time Payments.Identity division highlights Identity business sold to Twilio after year end for up
125、to$32.3 million on 28th February 2022.Cash receipts of$26.2 million received with balance due in 2023,contingent on the delivery of certain performance terms.Group term loan paid down in full from proceeds.Identity revenues up 37%to$7.1 million and reduced EBITDA loss of$2.9 million(2020:$3.9 millio
126、n EBITDA loss).*Adjusted EBITDA:Earnings before interest,tax,depreciation and amortisation,impairment of goodwill,non-recurring other income,stock option expenses,Forex gains/losses and Exceptional items*TPV is the US$value of transactions processed by the Boku platform*2020 comparatives include six
127、 months of revenues and costs from Fortumo acquired 1 July 202016Boku,Inc.Annual Report and Accounts for the year ended 31 December Payments divisionBoku Payments and Fortumo Payments(acquired 1 July 2020)together form the Payments division and in 2021 the businesses were combined for both reporting
128、 and operational purposes.Bokus Payments business was founded on Direct Carrier Billing(“DCB”)which enables end user customers of Bokus merchants to charge payments to their phone bills,but its product suite has now expanded to offer connections to eWallets and Real-Time Payments(RTP)through its mob
129、ile first M1ST payments platform.These services are provided to the worlds largest digital merchants including Apple,Netflix,Facebook,Google,Amazon,Spotify and Sony,mainly on an exclusive basis.In 2021 the Payments division again performed strongly,with revenues increasing 21%to$62.1 million(2020:$5
130、1.2 million*)which in turn delivered increased Adjusted EBITDA*of$22.9 million(2020:$19.2 million)demonstrating the powerful operational leverage of our payments platform as additional incremental transaction revenues largely drop through to Adjusted EBITDA.This growth was despite considerable excha
131、nge rate headwinds without which revenues and EBITDA would have been higher.We also saw typical seasonal patterns distorted by COVID-19 lockdowns particularly in Q1 as gaming merchants saw increased sales which were later offset by slower second half performance.We expect more normal seasonal patter
132、ns to resume in 2022.Growth comes from both from the existing merchant base and also from adding new carrier and eWallet connections to new and existing merchants.Total Payments Volume(“TPV”)for the Payments division increased by 18%to$8.2 billion(2020:$6.9 billion)while Monthly Active Users grew by
133、 3.5 million to 32.3 million (2020:28.8 million).The blended average take rate was broadly stable at 0.75%as we saw good growth from higher take rate settlement merchants.Gross margins for the Payments division remained stable at 97%in the year.Adjusted operating expenditure for the Payments divisio
134、n increased to$37.6 million(2020:$27.6 million)due to a number of factors including the full year effect of the acquisition of Estonian based Fortumo in July 2020,payroll increases,some costs incurred in completing the migration of Bokus Payments platform into a cloud based environment but also due
135、to investment in the second half,mainly in headcount,into building out Bokus mobile first M1ST payments network,adding capabilities in eWallets and Real-Time Payments as well as building out our sales and marketing engine as we seek to sign new merchants outside of our traditional DCB base.As flagge
136、d in our interim statement,this will increase adjusted opex in 2022,however this is a one time investment to exploit the opportunity in eWallets and RTP and we expect the drop through of additional revenues to EBITDA to increase again in FY23 and beyond.We continued to invest in the Boku Payments pl
137、atform and in 2021 completed the migration of our payments platform into a cloud-based infrastructure(AWS)from two physical colocation facilities in the U.S.which were then decommissioned.Although the total running costs are similar in the cloud,the pay as you go nature of the cloud services means t
138、hat we are able to capitalise less of the cost and so adjusted operating expense increased as a result.The Boku Payments Platform has the capacity to process volumes considerably in excess of todays peak message rates.Fortumo earnoutBoku acquired Estonia based carrier billing payments company Fortum
139、o Holdings Inc(Fortumo)on 1 July 2020,consolidating Bokus leading position in the global DCB payments market.An initial payment of$39.6 million was made in 2020 with a further$5.4 million put into an escrow account,subject to Fortumo meeting challenging earnout targets.The final earnout payment,base
140、d on Fortumo Adjusted EBITDA*performance for the 12 month earnout period ended 30 June 2021,was$2.16 million,which was paid to Fortumos former shareholders in October 2021,with the balance of$3.24 million returned to Boku.The excess amount repayable to Boku over the fair value on the Balance Sheet a
141、t 31 December 2020 of$1.08 million has been shown as Other Income in the Income Statement.It has been excluded from Adjusted EBITDA*as a non-trading,non-recurring item.The total consideration for Fortumo was therefore$41.76 million which included$4.0m of working capital resulting in an enterprise va
142、lue of$37.76 million for the acquisition.Chief Financial Officers Report17Stock code:BOKUBoku,Inc.Annual Report and Accounts for the year ended 31 December 2021Identity divisionBokus Identity division was formed in 2019 following the acquisition of Danal Inc on 1 January 2019 for$25.1 million.Identi
143、ty revenues recovered strongly in 2021 growing 37%to$7.1 million(2020:$5.2 million)as we saw strong growth from key existing customers complemented by a ramp up in transaction volumes from new mobile wallet customers in new geographies such as Indonesia.We continued to build out Identity supply with
144、 new connections added in Germany,Spain,Italy and Indonesia.Adjusted operating expenditure for Identity remained low in 2021 due to continued low travel and marketing spend as a result of the COVID-19 pandemic.The strong revenue growth and low-cost base resulted in a further reduced Adjusted EBITDA*
145、loss of$2.9 million(2020:$3.9 million Adjusted EBITDA loss).Although at year end no decision had been taken to sell,an agreement was reached,after year end,with Twilio Inc.(“Twilio”),the leading cloud communications platform,to acquire Bokus Identity division comprising its wholly-owned subsidiary B
146、oku Identity,Inc.,for a maximum consideration of$32.3 million payable in cash and the transaction was completed on 28 February 2022.This enables Boku to focus on its Payments business and in building out the M1ST payments network.Group Adjusted EBITDA*and Operating ProfitGroup Adjusted EBITDA*increa
147、sed by more than 30%to$20.0 million(2020:$15.3 million)illustrating the powerful operational gearing in the payments business.Adjusted EBITDA is earnings before interest,tax,depreciation and amortisation,adjusted for stock option expenses,forex gains/losses and exceptional items.Reported Operating P
148、rofit for 2021 of$5.1 million was an increase of$21.8 million(2020:$16.7 million loss,primarily due to the goodwill impairment of the Identity division of$20.8 million).The Operating Profit can be broken down as follows:Other income of$1.08 million relates to the excess receipts from the Fortumo ear
149、nout escrow over fair value.Gross margin increased to$63.4 million(2020:$51.5 million).Depreciation and Amortisation charges increased to$7.5 million(2020:$5.9 million)which included a full year of Fortumo charges in 2021(acquired 1 July 2020).Foreign Exchange movements resulted in a small loss of$0
150、.1 million(2020:$1.0 million gain).Stock Option Expenses increased to$7.4 million(2020:$4.9 million)as we included awards to Fortumo staff following the acquisition in 2020 and added headcount in the year.Boku has a policy of issuing RSUs to all staff annually.RSU charges are spread over three years
151、 from date of grant based on the Black Scholes method.Of the$7.4 million booked in 2021,$0.7 million was paid out cash(via employers NI),the remainder was non-cash and expensed.Impairment of goodwill there was no impairment in 2021(2020 impairment of$20.8 million which related to the write down of t
152、he carrying value of the Identity division).Exceptional Items of$1.0 million mainly related to the 2021 costs of the disposal of Boku Identity(2020:$1.4 million mainly costs relating to the acquisition of Fortumo on 1 July 2020).Net financing expenses were$0.7 million in 2021(2020:$0.6 million).Thes
153、e costs relate to Interest on leases and bank loans/overdraft.Tax credit of$1.9m(2020:$1.5m charge)relates primarily to recognition of an additional defered tax asset of$2.4 million in the year(see Balance sheet section below and note 8)which was partly offset by a tax charge of$0.5 million.Net Prof
154、it after TaxThe Company reported a net profit before tax of$4.4 million(2020:$17.3 million loss primarily due to the goodwill impairment for Identity division of$20.8 million)and a net profit after tax for the year of$6.3 million(2020:$18.8 million loss).18Boku,Inc.Annual Report and Accounts for the
155、 year ended 31 December Balance Sheet and Cashflow Closing cash balances were$62.4 million at the end of 2021(including restricted cash balances of$5.8 million)(December 2020:$62.7 million)up from$48.6 million on 30 June 2021(unaudited).Monthly average cash balances,which smooth the impact of intra-
156、month flows of both carrier and merchant payments,were$50.8 million in December 2021(December 2020:$46.7 million)up from$38.0 million in June 2021(unaudited).Cash generated from Operations before working capital changes during the year was$19.5 million(2020:$11.5 million).To part finance the acquisi
157、tion of Fortumo in July 2020,the Group took on$20 million of debt with Citibank,comprising a 3 year term loan of$10.0 million and a Revolving Credit Facility(“RCF”)of$10.0 million.At year end the RCF had been paid down in full and the term loan had been paid down by$1.9 million to$8.1 million.After
158、year end the balance of the term loan was repaid in full in February 2022 from the sale proceeds of Boku Identity.Deferred tax assets of$3.1 million were recognised at 31 December 2021(compared to$0.5 million at 31 December 2020).This reflects a re-appraisal of the usability of certain tax losses an
159、d future transaction volumes through its US and UK incorporated entities.From a working capital perspective,Current Assets exceeded Current Liabilities at 31 December 2021 by$22.8 million compared with$15.6 million at the 2020 year end.Intangible Assets were$63.1 million as at 31 December 2021,compa
160、red to$65.6 million at 31 December 2020 due to amortization of certain intangibles.Following the disposal of Bokus Identity business which was completed on 28 February 2022 and as noted in PBSE(note 26)we have assessed the Identity CGU intangibles and determined that as the fair value less cost of d
161、isposal is greater than the value of the intangibles in the groups balance sheet and therefore these intangibles are not impaired.The Payments CGU was assessed using discount cashflows and again no impairment was needed.We assessed our other intangibles and goodwill for impairment and deemed that no
162、 impairment exists at 31 December 2021.Chief Financial Officers ReportGoing concern (including consideration of COVID-19)In carrying out the going concern assessment,the Directors considered a number of scenarios,taking account of the possible continued impact of the COVID-19 pandemic in relation to
163、 revenue forecasts for the next 12 months from March 2022.Given current pandemic and macro-economic uncertainties,it is not yet fully clear when the global economic activity will fully return to pre pandemic levels,therefore,we continue to prepare the business for varying levels of performance.To th
164、at end,we have continued to model the effects of differing levels of sales performance along with the measures we can take to ensure that the Group remains within its available working capital.In reaching their going concern assessment,the Directors have considered the foreseeable future,a period ex
165、tending at least 12 months from the date of approval of this interim financial report.This assessment has included the year end cash balances in excess of$62 million at year end and the expected net proceeds from the disposal of Boku Identity in February 2022,consideration of the forecast performanc
166、e of the business and the financing facilities available to the Group.Considering this analysis,the Directors are satisfied that the Group has sufficient working capital resources over the period of at least 12 months from the date of approval of the consolidated financial statements.As such,the con
167、solidated financial statements have been prepared on a going concern basis.Impact of Russia/Ukraine conflictBoku is an international company providing payments services to global digital merchants such as Apple,Sony,Spotify,Google,Netflix and Amazon in over 90 countries.In 2021,total revenues from R
168、ussia/Ukraine/Belarus were approximately 1%of Payments revenues.19Stock code:BOKUBoku,Inc.Annual Report and Accounts for the year ended 31 December 2021Boku helps its merchants accept payments from consumers for their services in Russia and Ukraine,however:Boku does not have any relationships with m
169、erchants domiciled in Russia,Belarus or the Ukraine.Boku does not send any money to Russia nor has any active bank accounts domiciled in Russia.Boku does not have any employees or infrastructure in in Russia,Belarus or the Ukraine and has not seen any disruptions to its operations as a result of the
170、 conflict.Boku does have connections to Russian carriers almost all of which have stopped processing and are unlikely to resume in 2022.Assuming that is the case the revenue impact for the remainder of 2022 is not expected to be more than$1.5 million.Looking AheadThe divestment of our Identity busin
171、ess will enable Boku to focus on its core Payments business and to invest to fully exploit the Big Pond opportunity by continuing to build out the Boku mobile first(M1ST)payments network.As flagged in our interim report,we expect Adjusted operational expenditure in the Payments division to increase
172、more quickly in 2022 as we invest in sales and marketing as well as technology and operational headcount but we also expect this to flatten again in FY23 and beyond after this one-time investment.We are pleased with the 2021 financial results and believe the company is well positioned for 2022 as a
173、pure play payments company to exploit the substantial opportunities it has.Keith ButcherChief Financial Officer 28 March 2022*Adjusted EBITDA:Earnings before interest,tax,depreciation and amortisation,non recurring other income,impairment of goodwill,stock option expenses,forex gains/losses and exce
174、ptional items*TPV is the US$value of transactions processed by the Boku platform*2020 comparatives include six months of revenues and costs from Fortumo acquired 1 July 202020Boku,Inc.Annual Report and Accounts for the year ended 31 December Principal Risks and UncertaintiesRisk management in our bu
175、siness Effective risk management is critical to achieving the Groups objectives.Boku operates a Group-wide risk management framework across all its lines of business and covering all departments,ensuring the strategic and operational risks are identified,evaluated,mitigated,monitored and reported in
176、 a consistent way.This framework allows us to take a holistic approach to risk management and to make meaningful analysis and comparisons of the risks we face and how we manage them across our footprint,which is essential to achieve our strategic objectives.It is an evolving framework as we continuo
177、usly seek to improve and enhance our risk management processes.ResponsibilityRisk management at Boku is reviewed and approved at Board level but delegated to the Audit Committee for ongoing review through the year.The Board has oversight responsibility for the effective management of all major risks
178、 affecting the Group.In each area,the Board is supported by members of the Senior Management team and other managers with key functional responsibilities to ensure that an effective risk management is embedded,considering both opportunities and threats,throughout the organisation.The Audit Committee
179、 continually monitors and promotes the highest standards of integrity,financial reporting,risk management and internal control.Identifying and managing our risks Our risk identification process is a combination of a“top down”approach(driven by the Audit Committee and the Board)and a“bottom up”proces
180、s(originating from the business operations).Risks are classified on two dimensions risk level and risk tolerance.The former is classified High/Medium/Low and relates to the potential impact,the latter is classified as Red/Amber/Green and relates to the likelihood of the risk occurring.The risk champ
181、ion of each department shares their most significant risks after having considered a set of external factors from the various jurisdictions in which Boku operates to the internal ways of operating.All risks are then consolidated into a Group-wide register which is then presented to our Senior Manage
182、ment and the Board which in turn will perform their own review and add further input on the risks before agreeing the Principal Risks.21Stock code:BOKUBoku,Inc.Annual Report and Accounts for the year ended 31 December 2021RiskMitigationCompetitive and rapidly changing environment The Group operates
183、in rapidly evolving payments markets where service provision is subject to rapid technological change and use is dependent on user behavior.The impact of changes to the structure of the app store payment market,competition,pricing pressure,DCB market shrink,could result in a material loss of revenue
184、 and profit for the Group.Risk level:High Risk tolerance:AmberRisk movement from last year:Unchanged Investing in new products,markets and technologies and improving relationships with key merchants and carriers.Launching new payment products and developing the Groups offerings to meet changing clie
185、nt demands and market preferences.Develop the necessary expertise and experience to sell and deliver new products and technologies to new and existing clients.Analysis of the external environment to understand where the market is heading.Attending tech fairs,discussion groups etc.to be up to date wi
186、th recent technology,find new sources of ideas to create new products addressing customers needs.Experienced sales team that builds close relationships with our merchants to better understand their needs.Engage with merchants potentially impacted by any possible app store market changes.Fail to evol
187、ve the organisations systems and tools to be fit for today/future goals As Boku is growing and continuously evolving,systems and mainly production,should be able to keep up with scaling demand.Failing to keep up with the growth,could cause transaction processing failures that could lead to loss of r
188、evenue and even loss of merchants.Risk level:High Risk tolerance:AmberRisk movement from last year:Unchanged Identify current and future needs of new systems(production,etc.).Identify current and future needs of tools to increase efficiencies.Investing significantly in 2021 and 2022 in Technology,bo
189、th in Product and Platform(AWS).Further team optimisation plans.22Boku,Inc.Annual Report and Accounts for the year ended 31 December RiskMitigationAdverse changes to the regulatory environmentFrequent changes in the regulatory arena could have adverse effects on Groups existing processes and provisi
190、on of services.Examples can be:-Some EU markets introducing changes to the treatment of DCB(additional requirements to comply with).-Privacy/Data residency(Privacy shield invalidity in EU,data residency requirements in India and other regions.-AML and customer due diligence(stricter requirements fro
191、m Central Banks&non-financially regulated bodies introducing new requirements to DCB).Risk level:High Risk tolerance:AmberRisk movement from last year:Unchanged Diversifying the range of services available to all types of customers to mitigate the impact of any single regulatory change.Continuing to
192、 invest in solutions that improve the Groups ability to manage risks and ensure compliance with regulations.Attending industry events and associations member meetings to stay current with any significant changes relevant to our business.Applied for and granted a Payment Institution license in Irelan
193、d to operate Local Payment Methods(LPMs)and explore other wider opportunities.Applied for and granted a Major Payment Institution license in Singapore to support typically global merchants that head their APAC operations from Singapore registered companies.Applied for and granted authorisation as a
194、Money Service Operator in Hong Kong to support processing payments from e-wallets,in particular Chinese wallets.Applied for and granted Payment Agent license in India to operate LPMs.Continue applying for Payment Institution licenses and setting up local companies in other jurisdictions(i.e.Malaysia
195、,Thailand,Philippines)to support the already existing regulated payment solutions in 45 countries.Follow European Commissions template of Standard Contractual Clauses(SCC)and external expert advice.Failure of carriers/intermediaries to pay the amount due to merchants The company is reliant on third
196、parties,including MNOs,SMS aggregators,Local Payment Methods(LPMs)to pay significant amounts due from them in a timely manner as specified under contract.A large-scale failure to do so may have an impact on the Groups financial condition or operating results.Risk level:Low Risk tolerance:GreenRisk m
197、ovement from last year:Reduced Developing strong relationships with MNOs,aggregators and Local Payment Methods(LPMs).Effective credit control and management of receivables.Creating direct relationships with fewer intermediaries.Use Creditsafe tool for a credit check during onboarding of new customer
198、s.Our merchant contracts limit the liability to Boku for non payment by carriers or intermediaries.Principal Risks and Uncertainties23Stock code:BOKUBoku,Inc.Annual Report and Accounts for the year ended 31 December 2021RiskMitigationSignificant fraud events or social engineering attackA large fraud
199、 incident or social engineering attack could lead to reputational damage,losses in revenue,costs of dealing with the fraud,and potential loss of merchant confidence.Risk level:Medium Risk tolerance:AmberRisk movement from last year:Unchanged Regularly review risk rules to ensure they are effectively
200、 monitoring customer behavior.Recruiting specialised,experienced fraud prevention staff.Review investment opportunities in solutions that improve the Groups ability to manage risk.Developed comprehensive internal policies and procedures.Threats from weak Cyber Security and Data ProtectionThe Group I
201、T environments may be subject to hacking,data theft or other cyber security threats which may harm customer relationships and the market perception of the effectiveness and resilience of the Groups products and services.Such an attack may also have a material adverse effect on the Groups financial p
202、osition.Risk level:High Risk tolerance:AmberRisk movement from last year:Increased Ensuring there are systems and experienced staff in place to defend against potential cyber security threats.Building resilience within the Platform to mitigate the impact of an attack in the event of a successful pen
203、etration.Continuous testing and assurance activities(internally and externally).Continuous education on and raising awareness of cyber threats and data theft for staff.Broaden existing ISO 27001 certification to cover all Boku business lines.Fail to effectively integrate newly acquired businessHavin
204、g acquired Danal Inc in 2019 and Fortumo Holdings,Inc.in 2020,the period following the merger of two companies required in-depth analysis and planning around integration,finding the synergies and ensuring an effective operational model is in place,and focusing on how the working cultures and values
205、are integrated.Risk level:Medium Risk tolerance:AmberRisk movement from last year:Increased Being a global company that is growing rapidly,an international environment where we respect our similarities and differences,is in the core of our values.Form working groups to execute the plans following th
206、e synergies identified.Align polices and best practices to be followed by all employees.Review costs and duplication of activities for better utilisation of resources.Create a consolidated product roadmap with aligned engineering investment.Put in place integrated teams and management with common ob
207、jectives.24Boku,Inc.Annual Report and Accounts for the year ended 31 December RiskMitigationDifficulty in attracting and retaining the best talent The Groups success depends on its ability to attract and retain key management and skilled technical employees.If the Group is unable to identify,attract
208、,develop,motivate,adequately compensate and retain well-qualified and engaged personnel,this could have a material effect on the Groups reputation,business,operations and financial performance.Risk level:LowRisk tolerance:Green Risk movement from last year:Decreased Developing the skills and capabil
209、ities of staff as part of talent management.Creating opportunities within the Group for personal development and career enhancement.Recruiting experienced HR staff and working with specialized recruitment agencies.Simplified our recruitment approach to attract and provide a better experience for pot
210、ential candidates.Flexible working provides more opportunities of attracting and hiring employees from new locations,outside of the main office locations.Ensuring that all Employees have equity in the company through our RSU programme.Unforeseen disasters and other Black Swan eventsBoku is a global
211、company,operating in a number of jurisdictions.Because of that global scale and the current post pandemic world,we face a number of uncertainties where an unforeseen disaster(Black Swan)might impact us significantly and in an immediate way,or emerging risks may potentially impact us in the longer te
212、rm.Risk level:MediumRisk tolerance:Amber Risk movement from last year:NewThere might be cases where we have insufficient information to understand the likely scale or impact the risk could have in our business and people.We also might not be able to fully define a mitigation plan until we have a bet
213、ter understanding of the threat.However,currently we are doing the below:We have also created a“risk universe”which is a much wider list of risks which we monitor regularly for changes in priority We have created a watchlist of those emerging risks which we review on a regular basis so that future s
214、trategies take into account future technological,environmental,regulatory or political changes.We have created a Business Continuity Program and developed disaster recovery plans to respond to events as necessary.The Russia/Ukraine conflict that started in 2022 is an example of a Black Swan event.Bo
215、ku operates in 91 countries globally and therefore its revenues are well spread.Connections to carriers in Russia have been impacted as detailed in the CEO and CFO reports but the overall revenue impact in 2022 is expected to be relatively small.Environmental impactGiven the nature of Bokus online b
216、usiness servicing only digital merchants,our environmental impact is relatively low.However,Boku is committed to finding ways to operate the business in a more energy efficient and environmentally advantageous manner,for example moving its servers into a cloud based environment in 2021 Further,regul
217、atory changes are reviewed regularly to ensure Boku acts on all relevant local and international requirements accordingly.Principal Risks and Uncertainties25Stock code:BOKUBoku,Inc.Annual Report and Accounts for the year ended 31 December 202126Boku,Inc.Annual Report and Accounts for the year ended
218、31 December Board of DirectorsMark BrittoNon-Executive ChairmanWith over 20 years as an entrepreneur,sales and financial services executive,Mark Britto is currently the Chief Revenue Officer at PayPal.He also serves as Bokus Non-Executive Chairman.Mark founded Boku after six years as the CEO of Inge
219、nio,a service marketplace and performance advertising company,which he led to a 2007 acquisition by Jon PrideauxChief Executive OfficerJon has more than 25 years of payments experience.He was an early Visa Europe employee and a key contributor to its growth,leaving in 2006 as EVP Marketing.He starte
220、d Visa Europes eCommerce division,was the lead executive on the introduction of Chip and PIN technology,and oversaw product launches such as Visa Electron and V PAY.Keith Butcher Chief Financial OfficerKeith has had considerable experience as a listed company CFO and of online payments businesses.Hi
221、s experience includes six years as CFO of AIM listed online payments company DataCash Group plc during its period of rapid growth and ultimate sale to MasterCard.More recently,he was CFO of LSE listed payments company Paysafe Group plc(formerly Optimal Payments plc),which AT&T.Prior to Ingenio,Mark
222、spent 4 years as SVP of worldwide services and sales at A.Marks first start-up,A,was bought by A in 1999 and served as the primary backbone of Amazons global payments platform.Mark began his career in senior credit and risk management roles at leading national banks FirstUSA and Bank of America.He s
223、erved on the Board of EMVCo,was the Chairman of the Compliance Committee,and was a member of Visas Global Product and Brand Councils.Since leaving Visa in 2006,Jon served as Deputy CEO for SecureTrading,where he doubled transaction numbers and quadrupled profitability.He then led a management buy-in
224、 at Shopcreator,the ecommerce software platform.Jon joined Boku in 2012,becoming CEO in 2014 and led the companys IPO in 2017grew its market capitalisation from 40 million to 2 billion during his tenure through a combination of organic growth and a number of acquisitions including the 1.1 billion ac
225、quisition of Skrill.Keith became CFO of Boku in 2019,having originally joined the Board as a non executive Director on Bokus admission to AIM in 2017,where he was audit committee chairman.Keith was awarded Finance Director of the Year at the Quoted Company Alliance Awards(QCA)2014.27Stock code:BOKUB
226、oku,Inc.Annual Report and Accounts for the year ended 31 December 2021Dr.Richard Lawrence HargreavesIndependent Non-Executive DirectorRichard Hargreaves began his career at ICFC(now 3i plc),which was then the principal source of equity for UK unquoted companies.He next started Baronsmead plc,which h
227、e developed until its sale.He was actively involved in the growth of the venture capital industry through the British Private Equity&Venture Capital Association(BVCA),where he became chairman.He was involved with their tax incentive lobbying,which saw the birth of the Venture Capital Trust,and Baron
228、smeads name is still on several of the best performing VCTs.Stewart RobertsIndependent Non-Executive DirectorStewart has over 30 years of experience in payments,banking and technology,across both start-ups and institutional employers and is a recognised payments industry expert in both the tradition
229、al and emerging payments space,as well as the mobile application sector.Stewart had previous roles as Global Director of Innovation for Barclaycard Charlotta GinmanIndependent Non-Executive DirectorCharlotta began her career at Ernst&Young,where she qualified as a Chartered Accountant.She was then a
230、ppointed to a series of senior roles in investment banking with UBS,Deutsche Bank and JP Morgan both in London and Singapore,where she gained considerable M&A transactional experience.Charlotta has also held senior roles within Nokia Corporation,including acting as CFO of its luxury mobile phone div
231、ision Vertu Corporation Limited.More recently,he co-founded Endeavour Ventures Ltd,which invests in young technology companies for its client base of high-net-worth individuals.He retired from Endeavour in 2018 to focus on being a professional business angel.Richard has nearly 50 years experience in
232、vesting in young technology companies and helping them to grow.He is a very experienced non-executive director with significant understanding of the US market.He is a graduate of the University of Cambridge and has an MSc and PhD from Imperial College,London.and Head of International Merchant Servic
233、es for the Royal Bank of Scotland Group.More recently,Stewart was CFO and then Executive Vice President of iZettle AB and was a key member of the team that agreed the sale of iZettle to PayPal in May 2018 for US$2.2 billion.Mr.Roberts is the Chairman of Bokus Audit Committee and is also Chairman at
234、HappyOrNot AYCharlotta is a Non-Executive Director and Chair of the Audit Committee of two investment trusts,Polar Capital Technology Trust PLC and Pacific Asset Trust PLC,as well as AIM listed Keywords Studios plc and Gamma Communicatios plc.She is also a Non-Executive Director of Unicorn AIM VCT P
235、LC,a Venture Capital Trust.As three of Charlottas roles are with investment companies that have only 4-5 meetings a year and the others are all AIM listed,with less regulatory burden than a premium listing,Charlotta has sufficient time to devote to each of her roles.28Boku,Inc.Annual Report and Acco
236、unts for the year ended 31 December Senior ManagementAdam LeeChief Product OfficerAdam has been developing new products and services for startup ventures for over 20 years.At Boku,Adam leads product,design,and marketing,charged with finding innovative new applications for the 7B+consumer payment acc
237、ounts connected to Bokus M1ST Payments Network.Before joining Boku,Adam was at Intuit where he launched the worlds first consumer medical wallet used to understand,manage,and pay for healthcare expenses,distributed by two of the largest US healthcare networks,UnitedHealthcare and CIGNA.Prior to Intu
238、it,Adam had also worked for two major industry backed B2B platform companies,Neoforma and more notably GlobalNetXchange where he developed technology and services to drive better supply chain performance between companies around the world including Carrefour,Sears,Sainsburys,Metro AG,Karstadt Quelle
239、,Unilever,Proctor&Gamble,and Diageo.Chris Newton-SmithChief Operating OfficerChris has more than 20 years of experience in B2B software,working in mobile,digital,and hospitality businesses.At Boku,Chris leads the Technology,Operations,and People Operations teams.Prior to Boku,Chris was CEO of iRiS S
240、oftware Systems,the leading guest experience SaaS platform serving the hospitality industry.Chris led the roll-out of its innovative digital food&beverage(F&B)ordering solution to global hotel groups including Marriott International and Four Seasons Hotels&Resorts.Previously,Chris was General Manage
241、r,Europe,Middle East,and Africa(EMEA)and Chief Product&Marketing Officer at Redknee Solutions as the company grew from a Canadian start-up to a global leader in monetization software for telecoms,with more than 200 carrier customers in 100 countries.Chris has also held product management and busines
242、s development roles at LogicaCMG Telecoms and BlackBerry.He has been a mentor for METRO Accelerator by Techstars and was Chair of the Board of Trustees and a Trustee at Emmaus Hertfordshire.He has a Bachelor of Engineering and Management degree from McMaster University in Canada.Mark Stannard Chief
243、Business OfficerMark has over 20 years experience in mobile,digital,and fintech services and is a leading member of the team that has brought the biggest digital brands to carrier billing:Apple,Facebook,Spotify,Sony PlayStation,Google,Netflix and Microsoft.He played a critical role in building Bokus
244、 market-leading carrier billing network of nearly 200 carriers,and as Chief Business Officer Payments,has direct responsibility for Bokus Worldwide mobile payments business.This includes the deployment of new mobile Alternative Payment Types onto the Boku platform,such as digital eWallets and mobile
245、 banking Apps.Previously,Mark held positions at Deutsche Telekom&Buongiorno-Vitaminic(now part of NTT-DOCOMO)where he managed BD,and led marketing&licensing for music and digital entertainment services.He launched Europes first mobile music service in 2001,signing deals with all five major record la
246、bels,and later brought leading film,TV&toy brands to mobile,including Spider-Man,Pink Panther and Transformers.30Boku,Inc.Annual Report and Accounts for the year ended 31 December Corporate Governance ReportChairmans IntroductionDear Shareholder,Part of my role as Chairman is to ensure that the high
247、est levels of corporate governance are maintained throughout the Company and also at Board level.I recognise the importance of,and we as a Board are committed to,high standards of corporate governance,aligned with the needs of the Company and the interests of all our stakeholders.My fellow directors
248、 and I fully appreciate the importance of sound governance in the efficient running of the company,and in particular in the effectiveness and independence of the Board.The following report sets out how we do this.It also covers how the Board and its committees operated in 2021 and how we have contin
249、ued to comply with the principles of the QCA Corporate Governance Code(the“QCA Code”).Information of Bokus compliance with the principles of the QCA Code can also be found on our website at:https:/ BrittoNon-Executive Chairman28 March 2022Statement of Compliance Application of the QCA Corporate Gove
250、rnance Code Principle Application/EvidenceDeliver Growth1.Establish a strategy and business model which promote long-term value for shareholdersOne of the Boards principal roles is to provide effective leadership of the company and to establish and align Bokus purpose,strategy,values and culture acr
251、oss its business.In 2021,Bokus management team established its first formal set of objectives and key results(“OKRs”)for the business.The OKRs create a framework for the setting,and achieving,of goals within each team at Boku.The aim is to create a business model in which all teams work towards the
252、same goal of promoting the success of Boku.This aim is further supported through monthly business reviews and“all-hands”calls which provide all Bokus employees with updates on the business performance,upcoming changes and other pertinent issues.An explanation of the Companys business model and strat
253、egy,including key challenges in their execution(and how those will be addressed)is included on pages 4 to 19.31Stock code:BOKUBoku,Inc.Annual Report and Accounts for the year ended 31 December 2021Principle Application/EvidenceDeliver Growth2.Seek to understand and meet shareholder needs and expecta
254、tionsCommunication between Boku and its shareholders is an essential element of Bokus governance framework.The main day-to-day engagement with shareholders and prospective investors is carried out by the Chief Executive Officer and Chief Financial Officer.During the year,meetings with analysts and i
255、nstitutional shareholders take place immediately after the results announcements,supplemented by ad hoc meetings and calls at other times.Regular market reports are prepared by Companys Nominated Advisor,Peel Hunt,which are then forwarded to the Board to ensure the Directors have a good understandin
256、g of shareholders views.The Group has a dedicated investors section on its website,https:/ with a wide range of Bokus reports,results and shareholders documents.The Board engages with shareholders via a variety of channels and activities during the year including the annual general meeting,updates t
257、o shareholders via its reporting and the regulatory news services,institutional and retail investor presentations and investor roadshows,all of which provide an opportunity for shareholders to engage directly with senior management and the Board.The Board engages with shareholders via a variety of c
258、hannels and activities during the year including the annual general meeting,updates to shareholders via its reporting and the regulatory news services,institutional and retail investor presentations and investor roadshows,all of which provide an opportunity for shareholders to engage directly with s
259、enior management and the Board.3.Take into account wider stakeholder and social responsibilities and their implications for long term successBoku focuses on building strong and sustainable relationships with a range of different stakeholders in order to support its long-term success.The Board regula
260、rly considers the key stakeholder relationships which give the Company its competitive advantage and thereby contribute to its long-term success.The key stakeholders are the skilled people employed by the Company but also its merchant and carrier relationships together with other service providers,a
261、re central to the success of Boku and its strategy.These relationships are regularly monitored by the Board.Bokus culture is very open and this includes reaching out and seeking feedback on a regular basis through employee opinion surveys.The results of which are analysed,presented to the Board and
262、kept under review.Boku established a Diversity,Equity and Inclusion(“DEI”)Committee in the period with the objective of improving social mobility and inclusion of one its key stakeholders,its employees.The Committee conducted its first DEI survey in April 2021,the results of which are summarised on
263、pages 48 to 51.4.Embed effective risk management,considering both opportunities and threats,throughout the organizationThe Board retains overall responsibility for identifying the major business risks faced by the Group by setting both the framework and risk appetite of the Group,in line with best p
264、ractice.Our risk management framework and approach to risk is summarised pages 20 and 24.32Boku,Inc.Annual Report and Accounts for the year ended 31 December Principle Application/EvidenceMaintain a Dynamic Management Framework5.Maintain the Board as a well-functioning,balanced team led by the chair
265、The QCA Code requires that boards have an appropriate balance between executive and non-executive directors and that each board should have at least two independent directors.The Board is currently made up of a Non-executive Chairman(Mark Britto),two Executive Directors:the Chief Executive Officer(J
266、on Prideaux)and the Chief Financial Officer(Keith Butcher)and three Non-executive Directors(Richard Hargreaves,Stewart Roberts and Charlotta Ginman).All three of these directors are considered independent.The Board is supported by an appropriate committee structure,comprising of separate Audit and R
267、emuneration Committees that have the necessary skills and knowledge to discharge their duties and responsibilities effectively.In order to develop their skills and keep up to date with market developments,the directors receive regular training on the AIM Rules and other key rules and regulations rel
268、evant to AIM-listed companies,conducted by Peel Hunt.Further details of the current directors and a note of those who are considered to be independent are set out page 26.6.Ensure that between them the directors have the necessary up-to-date experience,skills and capabilitiesThe Board is satisfied t
269、hat its directors have an effective and appropriate balance of skills and experience,and that there is a suitable balance between independence of character and judgement,and knowledge of the Company,to enable it to discharge its duties and responsibilities effectively.All directors are encouraged to
270、 use their independent judgement and to constructively challenge all matters,whether strategic or operational.The current directors,their background and experience are described on pages 26 to 27.Collectively,our team has all the necessary skills and experience,to carry out the Groups strategy and b
271、usiness model effectively.Richard Hargreaves is the senior independent director and he is available to speak with shareholders concerning the corporate governance of the Company or indeed anything else.Richard Hargreaves will be taking over as Chairman with effect from the conclusion of the Annual G
272、eneral Meeting on 1st June 2022,at which point Stewart Roberts will become the senior independent director.The Company Secretary,Deepa Kalikiri is responsible for advising the Board on governance matters and ensuring that decisions of the Board in relation to governance matters are implemented.Follo
273、wing the latest review of Board effectiveness,various changes were made in the structure of the Board meeting,in particular to include a non executive session at each meeting as well as to more clearly set out a calendar of events and reviews.Corporate Governance Report33Stock code:BOKUBoku,Inc.Annu
274、al Report and Accounts for the year ended 31 December 2021Principle Application/EvidenceMaintain a Dynamic Management Framework7.Evaluate Board performance based on clear and relevant objectives,seeking continuous improvementThe Board has undertaken a formal annual evaluation of its own performance,
275、including of the Companys committees.The evaluation demonstrated overall positive results of the performance of the Board and committees,by recognising the strengths and addressing ways of improvement where appropriate.Appropriate training is also available to all directors to develop their knowledg
276、e and ensure they stay up to date on matters for which they have responsibility as a Board member.Following feedback from the Directors,the Board reviewed the structure of its bi-monthly Board meetings.The meetings were subsequently streamlined to consist of Directors only“executive”session and then
277、 a wider strategy session,in which other members of the Companys management team are invited to report to the Board.At the end of each Board session,there is a non-executive session to provide an opportunity for the non-executive Directors to meet privately and discuss certain topics if necessary.8.
278、Promote a corporate culture that is based on ethical values and behavioursThe Companys culture is guided by many different activities,which include regular senior management meetings and feedback following the employee surveys.Such surveys provide an insight to the views of the workforce on the Comp
279、any.The Companys policies set out its zero-tolerance approach towards any form of discrimination or unethical behaviour relating to bribery,corruption or business conduct in all jurisdictions in which it operates.A recruitment policy,used consistently across the business is in place,which together w
280、ith training and policies on whistleblowing and anti-bribery assist in embedding a culture of ethical behaviour for all employees.An outline of the corporate culture promoted by the Board is set out in the About Us section of the Companys website headed Our Values.34Boku,Inc.Annual Report and Accoun
281、ts for the year ended 31 December Principle Application/EvidenceMaintain a Dynamic Management Framework9.Maintain governance structures and processes that are fit for purpose and support good decision-making by the BoardFormal Board meetings are held every two months to review strategy,management an
282、d performance of the group.Additional meetings between those dates are convened as necessary.We have two Board committees:the Audit Committee and the Remuneration Committee.The terms of reference of both these committees have been revised to reflect the principles of the QCA Code.The terms of refere
283、nce can be viewed at https:/ to the current size of the Company,the Board still considers a Nominations Committee is not appropriate,any decisions relating to appointments to the Board will be a matter for the consideration of the whole Board.From time to time,separate committees may be set up by th
284、e Board to consider specific issues when the need arises.The roles and responsibilities of the Chairman,Chief Executive and any other directors who have specific individual responsibilities or remits(e.g.for engagement with shareholders or other stakeholder groups)are set out on page 26.The principa
285、l responsibilities of Board members are as set out below:Amongst other things the Chairman is responsible for:Promoting the highest standards of corporate governance and ethical leadership;Developing effective working relationships with the Executive Directors;Promoting effective relationships betwe
286、en all Board members;Setting the agenda for Board meetings and ensuring that sufficient time is devoted to the consideration of agenda items and that each director can express their views on matters;Ensuring that the Board monitors and determines the nature of the significant risks the Company embra
287、ces in the implementation of its strategy;Ensuring the Company maintains effective communications with shareholders and other stakeholders and that the Board as a whole is made aware of shareholder and stakeholder issues and concerns.The Chief Executive is responsible for the following matters among
288、st others:Developing and implementing strategy following approval by the Board;Reporting on a regular basis to the Board of progress in respect of strategy,Company performance and business matters;Developing the senior management teams and creating the appropriate organisational environment to deliv
289、er the strategy;Acting as the principal spokesman for the Company.Corporate Governance Report35Stock code:BOKUBoku,Inc.Annual Report and Accounts for the year ended 31 December 2021Principle Application/EvidenceMaintain a Dynamic Management Framework9.Maintain governance structures and processes tha
290、t are fit for purpose and support good decision-making by the BoardcontinuedThe Chief Financial Officer is primarily responsible for the delivery of high quality information to the Board on the financial position of the Company.The Non-executive Directors are responsible for providing a challenge to
291、 the Executives where required and to make the Board aware of their views on matters before Board decisions are made.They must be able to devote sufficient time to develop their knowledge and skills to be able to make a positive contribution to the Board.The Board has a schedule of matters reserved
292、for the Board which requires the following key matters to considered and approved by the Board:Strategy and overall management of the Group;Financial reporting and controls;Ensuring a sound system of internal controls;Approval of major capital projects and contractors;Communication with shareholders
293、;Board membership and appointments;The Remuneration Policy;Delegated authorities;Corporate governance matters;Approval of key policies.The Board and its committees receive appropriate and timely information before each meeting,a formal agenda is produced for each meeting,and Board and committee pape
294、rs are distributed several days before meetings take place allowing all Board members to contribute even if they cannot attend.Any director can challenge proposals,and decisions are taken democratically after discussion.Any director who feels that any concern remains unresolved after discussion may
295、ask for that concern to be noted in the minutes of the meeting,which are then circulated to all directors.Specific actions arising from such meetings are agreed by the Board or relevant committee and then followed up by management.The Boards Remuneration Committee is supported by a remuneration cons
296、ultant who provides the Committee,from time to time,with advice on remuneration structures and market updates and sentiments.The Board established the General Management Committee(“GMC”)and two sub-committes,Payments Management Committee and Identity Management Committee,in the period.The two sub-co
297、mmittees reported on matters relating to each line of the business into the GMC.The GMC is responsible for the day-to-day running of the business.The GMC reports into the Board on all aspects of the business,providing useful and important business oversight.The Board continues to receive departmenta
298、l deep dives during the Board meetings,which has strengthened the Boards exposure to the executive committee and other senior management.Following the improvements made in the course of the year,the Board is satisfied that the governance arrangements for the business remain appropriate and that the
299、delegations in place are effective and with strong oversight and controls.This is,of course,subject to regular Board and managerial oversight and review.36Boku,Inc.Annual Report and Accounts for the year ended 31 December Principle Application/EvidenceBuild Trust10.Communicate how the company is gov
300、erned and is performing by maintaining a dialogue with shareholders and other relevant stakeholdersReports on the work of the Board and its committees are set out as follows:Board:pages 26 Audit Committee:pages 38 Remuneration Committee:pages 41The Groups approach to investor and shareholder engagem
301、ent is described under Principle 2 above.Annual Reports,Annual General Meeting notices,regulatory announcements,trading updates and other governance related materials for 2021 and retrospective years are available from the Companys website.The Board Composition and ResponsibilitiesThe Board currentl
302、y consists of a non-executive Chairman,the Chief Executive Officer,the Chief Financial Officer and three non-executive Directors.There is a clear division of responsibilities between the Chairman and the executive officers and the Board considers three of the non-executive directors to be independen
303、t.The composition of the Board ensures that no single individual or group of individuals is able to dominate the decision-making process.By rotation,Directors are subject to reappointment by a shareholder vote at the Companys Annual General Meeting.Mr Roberts and Mr Hargreaves are up for re-election
304、 at the Annual General Meeting scheduled for 1st June 2022.The directors evaluate the balance of skills,knowledge and experience of the Board when defining the role and capabilities required for new appointments.The Board is responsible for setting the strategic direction and policies for the busine
305、ss.The Board meets regularly to attend to any issues which require its attention and oversees the financial position of the Company,monitoring performance on behalf of the shareholders,to whom the Directors are accountable.The primary duty of the Board is to act in the best interests of the Company
306、at all times.The Board also addresses issues relating to internal controls and the Companys approach to risk management.The day-to-day management of the Companys business is delegated to the Chief Executive Officer and the senior executives.Corporate Governance ReportDirectors Duties As a US incorpo
307、rated company,Boku is subject to the laws of the State of Delaware such that our Directors are not obliged to comply with the principles of the Companies Act 2006.The Directors nonetheless take pride in following a general set of director duties throughout their engagements.In particular,the Directo
308、rs act in good faith and in the way that they consider will be most likely to promote the success of the Company for the benefit of its shareholders as a whole.The Directors also act with reasonable care,skill and diligence,taking steps to ensure that they exercise independent judgement at all times
309、 and that processes are in place to enable robust decision-making,especially when there are more difficult decisions to be made.Boku recognises the importance and responsibility that lays in continuous engagement with stakeholders and in continuously acting in members best interests,Directors have r
310、egard(amongst other matters)to:Board Composition33%66%executivenon-executiveBoard Tenure33%33%33%3-6 years6+years0-3 years37Stock code:BOKUBoku,Inc.Annual Report and Accounts for the year ended 31 December 2021 the likely consequences of any decisions in the long term;the interests of the Companys e
311、mployees;the need to foster the Companys business relationships with suppliers,customers and others;the impact of the Companys operations on the community and environment;the desirability of the Company maintaining a reputation for high standards of business conduct;and the need to act fairly as bet
312、ween shareholders of the Company.Management TeamThe Board meets at least once every two months and Board meetings are attended by all directors either in person or over the phone.The Board formulates and approves the Companys strategy,budgets,corporate actions and monitors the Companys progress towa
313、rds its goals.It has established an audit committee and a remuneration committee with formally delegated duties and responsibilities and with written terms of reference.From time to time,separate committees may be set up by the Board to consider specific issues when the need arises.Due to the size o
314、f the Company,the directors have decided that issues concerning the nomination of directors will be dealt with by the Board rather than by a committee.Audit committeeThe Audit Committee is chaired by Stewart Roberts and its other members are Richard Hargreaves and Charlotta Ginman,all of whom are in
315、dependent non-executive Directors.The Audit Committee meets formally at least three times a year and otherwise as required.It has the responsibility of ensuring that the financial performance of the Company is properly reported and reviewed and its role includes monitoring the integrity of the finan
316、cial statements of the Company(including annual and interim accounts and results announcements),reviewing internal controls and risk management systems,reviewing any changes to accounting policies,reviewing and monitoring the extent of the non-audit services undertaken by external auditors,and advis
317、ing on the appointment of external auditors.A full report of the Audit Committee can be found on page 38.Remuneration committeeThe Remuneration Committee is chaired by Richard Hargreaves and its other members are Charlotta Ginman and Stewart Roberts,all of whom are independent non-executive director
318、s.The Remuneration Committee meets at least twice a year and at such other times as required.It has responsibility for determining,within the agreed terms of reference,the Companys policy on the remuneration packages of the Companys Chief Executive,Chairman,and the executive directors and such other
319、 members of the executive management as it is designated to consider.The remuneration of non-executive directors will be a matter for the Chairman and executive directors of the Board.No director or manager is allowed to partake in any discussions relating to their own remuneration.In addition,the R
320、emuneration Committee engages with a remuneration consultant from time to time in order to obtain independent advice to provide the committee with thorough and effective oversight on remuneration topics such as executive and management compensation and share market trends.The Remuneration Committee
321、has the responsibility for reviewing the structure,size and composition(including the skills,knowledge and experience)of the Board and succession planning.It also has responsibility for recommending new appointments to the Board.A full report of the Remuneration Committee can be found on page 41.Sha
322、re Dealing codeThe Company has adopted a dealing code for the directors and all employees,which is appropriate for a company whose stock is admitted to trading on AIM.The Company takes all reasonable steps to ensure compliance by the Directors and employees with the terms of that dealing code by pro
323、viding regular training and making the share dealing code and associated documents readily available at all times.ShareholdersThe Board is committed to regular,open and effective communication with shareholders to ensure that the Companys strategy and performance are clearly understood.The Company p
324、rovides annual and interim statutory financial reports,investor and analyst presentations,regular trading and business updates.At the Annual General Meeting all shareholders have the opportunity to meet and ask questions of the Board of Directors.The next Annual General Meeting is scheduled for 1 Ju
325、ne 2022.38Boku,Inc.Annual Report and Accounts for the year ended 31 December Audit Committee ReportCommittee Chairman IntroductionDear Shareholders,I am pleased to introduce the Audit Committee report for the year ended 31 December 2021.In the report below we explain how the committee discharged its
326、 responsibilities during the year,including the significant issues that we considered in relation to the financial statements and how we safeguarded the independence and objectivity of the external auditors.Our external auditors are BDO LLP who were appointed in 2017.Taking account of the Auditing P
327、ractice Boards Ethical Standard 3 the exiting senior statutory auditor who has been our Partner for the past five years will be stepping down and a new senior statutory auditor will be appointed for our next audit period.Composition of the committeeThe Audit Committee comprises Stewart Roberts(who s
328、erves as chair),Richard Hargreaves and Charlotta Ginman,who have all served on the Board and the audit committee throughout the full financial year.All members of the committee are non-executive directors and are independent of management.Both Mr Roberts and Mrs Ginman have significant accounting,au
329、diting and other related financial management expertise and the Board considers that the Audit Committee as a whole has competence relative to the sector in which the Company operates.Executive directors and senior executives(the Group Financial Controller and Company Secretary)attend meetings by in
330、vitation as required,but do not do so as of right.Representatives of BDO LLP(external auditor)also attend the committee meetings and meet privately with committee members,in the absence of executive management,prior to each committee meeting.The committee is required to meet a minimum of three times
331、 during each financial year but chose to meet four times during 2021.The Role and the responsibilities of the committeeThe Audit Committee Terms of Reference are published on our website but for clarity,the committees principal responsibilities are to:monitor the integrity of the financial statement
332、s of the Company and any formal announcements relating to the Companys financial performance,reviewing significant financial reporting judgements contained in them.The committee also reviews the Groups Annual Report and Accounts and Interim Report prior to submission to the full board for approval.m
333、onitor the Groups accounting policies and review the Companys internal financial controls and financial reporting procedures and,on behalf of the board,the Companys internal control and risk management systems.monitor the adequacy and effectiveness of the Companys internal controls and internal financial controls,risk management systems and insurance arrangements.make recommendations to the board,
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