Lebara Germany Limited

Düsseldorf

Befreiender Jahresabschluss gem. §325 a HGB
zum Geschäftsjahr vom 01.01.2019 bis zum 31.12.2019

LEBARA GERMANY LIMITED

London/UK

ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2019

Company Registration Number 06830549

Table of contents

Officers and professional advisors

Strategic report

Directors' report

Statement of director's responsibilities in respect of the annual report and the financial statements

Independent auditor's report to the members of Lebara Germany Limited

Statement of comprehensive income

Statement of financial position

Statement of changes in equity

Notes to the financial statements

Officers and professional advisors For the year ended 31 December 2019

Directors	E.E Taner	(resigned 18 October 2019)
	F. J. Pearce	(appointed 28 June 2019)
	P.A. Wild	(resigned 28 June 2019)
	M.P Engelke	(resigned 11 January 2019)
Company secretary	P. A. Van Straaten	(resigned 26 March 2020)
Registered office	7th Floor,
	Import Building,
	2 Clove Crescent,
	London.
	England,
	E14 2BE
Auditor	Price Bailey LLP
	Dashwood House
	69 Old Broad Street
	London
	EC2M IQS

Strategic report For the year ended 31 December 2019

The director presents the strategic report of the Company for the year ended 31 December 2019.

Review of the business

The principal activity of Lebara Germany Limited is that of providing support services (including sales and marketing) to Lebara Limited, for which a fee (based on the amount of Lebara Limited's German turnover) is earned. Lebara Limited provides mobile telecommunication services to the predominantly ethnic migrant population in Germany and primarily targets ethnic customers through a broad range of distribution channels including national retailers, national distributors, wholesalers, ethnic retailers and the internet.

The Company is a wholly-owned subsidiary of Lebara Finance 2 B.V., incorporated in the Netherlands.

The ultimate parent company is Lithium Topco Limited, a company incorporated in Jersey. Please refer to related parties on note 15 for further details of ultimate parent company changes during 2019 and post-balance balance sheet event on note 18.

Results and performance

The results of the Company for the year show a profit on ordinary activities after tax of €0.6m (2018: €0.2m) on turnover of €12.4m (2018: €12.6m). The shareholder deficit of the Company totals €29.4m (2018: €30.0m).

Business environment

The Company's performance is dependent on how successful Lebara Limited is at generating revenue from its German customers and increasing its customer base. The German MVNO market, in which Lebara Limited operates, is extremely competitive, with a number of active MVNOs including brands offering similar price deals, giving rise to aggressive pricing structures. Geographically, Europe as a whole represents the largest MVNO market, ahead of the US. The ethnic segment, of which the Company is a part, comprises the largest MVNO segment.

The UK officially exited the European Union (EU) on 31 January 2020. By virtue of the transition period in the Withdrawal Agreement, EU law will continue to apply until the 31 December 2020. UK telecommunication providers continue to be treated the same as a Company incorporated in any EU Member State until the end of the transition period, with a possible extension for up to another two years. Uncertainty of outcomes remain as the government negotiates a new relationship with the European Union and the rest of the world. Lebara is monitoring the situation closely. However, until further clarity is known regarding terms in which the UK will exit, the Directors are not able to definitively assess the impact on Lebara or what impact the wider regulatory and legal consequence of the UK leaving the EU would be on Lebara.

Strategy

The Company will continue to assist Lebara Limited in consolidating the group's position in the German market and will concentrate its efforts on achieving maximum growth through the provision of sales, marketing and other support services.

Key performance indicators

As the Company's income is dependent on the performance of the German unit of Lebara Limited and will always be profitable in terms of the agreement with Lebara Limited, it does not have any specific key performance indicators. The key performance indicators of the German unit of Lebara Limited, which affect the results of the Company are, however, as follows:

	2019	2018
30-day customer base at the end of the year (000)	695	683
30-day churn	8.5%	10.6%
Total Data (TB)	12,821	11,183
Total minutes (millions)	1,855	2,008

	2019	2018
	£000	£000
Revenue	12,378	12,570
Operating Profit	918	928
Operating profit as a % of Revenue	7.4%	7.4%

Principal risks and uncertainties

The Director has overall responsibility for the establishment and oversight of the Company's risk management framework. The Company's risk management policies are established to identify and analyse the risks faced by the Company, to set appropriate risk limits and controls, and to monitor risks and adherence to limits. The Company has identified the following significant risk factors: market risk, operational risk, regulatory and compliance risk.

Market risk

The market in which the group operates is competitive. Competition can lead to a reduction in the rate at which Lebara Limited adds new customers and/or to a decrease in the size of Lebara Limited's German market share which, in turn, will have an impact on the Company's performance. Market risk is closely monitored by the Directors, with a focus on performance by channel, client base segment and calling corridor. The performance is measured against real time data, and corrective actions are implemented if necessary. The group's pricing and marketing teams also play key roles in monitoring competition and other dynamics.

Operational risk

Operational risks exist at a group level but nonetheless affect the Company. They predominantly arise from a network interruption causing a sub-standard service delivery manifesting from reduced service availability. Such interruptions could be internal or external. Operational risk is mitigated by ensuring that people with the right skill sets and responsibilities manage network systems, having processes in place to ensure that network performance is monitored at all times, and establishing the right partnerships and governance mechanisms with the partners who provide the company with equipment, capacity and services.

Regulatory and compliance risk

The group operates in a regulated industry and, as such, its mobile telecoms services activities are regulated. The group's in-house legal team ensures that the Company complies with all regulatory requirements.

Financial risks to which the Company is exposed are detailed in the Director's report.

The risks above are closely monitored by the director and corrective actions are implemented if necessary.

Future developments

The operational and financial outlook for the Company remained on target across all key performance indicators (KPI) during the first quarter of 2020. The Coronavirus Pandemic is expected to impact results for the second quarter of the year at the very least. Whilst it is too early to conclude on exact implications, the expected effect across different KPIs are of varying degrees between positives and negatives, thereby reducing the overall negative impact. With proactive customer communications, responsive marketing plans, and continuous investment in new products and technologies, the Company will ensure delivery of a low cost, high quality service to its customers whilst improving its competitive advantage against its direct competitors.

Business relationships

We invest heavily in innovation so that we can continue to offer customers the best propositions and customer experience. We ensure customer feedbacks on service improvements are heard and addressed.

The Company depends on a sole mobile network operator (MNO) and limited suppliers to provide equipment and services to develop and upgrade its products and operate its business. Over the years, we have built good relationship with our MNO and suppliers and will continue to maintain transparency and fair dealing in our interaction with them.

Approved on

Date: 24 April 2020

F. J. Pearce Director

Directors' report For the year ended 31 December 2019

The Director present this report and the audited financial statements of the Company for the year ended 31 December 2019.

Future developments

Likely future developments are discussed in the Strategic report.

Dividends

No dividend has been declared and none is recommended (2018: €nil).

Directors

The Directors who served the Company during the year, and subsequently, were as follows:

E.E. Taner	(resigned 18 October 2019)
F. J. Pearce	(appointed 28 June 2019)
P.A. Wild	(resigned 28 June 2019)
M.P Engelke	(resigned 11 January 2019)

The Company is a wholly-owned subsidiary of Lebara Mobile Group B.V. and the interests of the group directors are disclosed in the financial statements of the immediate parent company, Lebara Group B.V.

Disabled employees

The Company gives full consideration to applications for employment from disabled persons where the requirements of the job can be adequately fulfilled by a handicapped or disabled person. Where existing employees become disabled, it is the Company's policy wherever practicable to provide continuing employment under normal terms and conditions and to provide training and career development and promotion to disabled employees wherever appropriate.

Employee involvement

During the year, the policy of providing employees with information about the Company has been continued through internal media methods in which employees have also been encouraged to present their suggestions and views on the Company's performance. Regular meetings are held between local management and employees to allow a free flow of information and ideas.

Political contributions

The Company made no political donations nor incurred any political expenditure during the year (2018: €nil).

Financial risk management objectives and policies

The Company's operations expose it to a variety of financial risks that include credit risk, liquidity risk, interest rate risk and foreign exchange rate risk.

Credit risk

Credit risk is the risk of financial loss to the Company if counterparties fail to meet their contractual financial obligations. The Company's exposure to credit risk is influenced mainly by the individual characteristics of each counterparty. Each counterparty is analysed individually for creditworthiness, including, where available, external ratings and references. The Company is exposed to credit risk from its operating activities: primarily trade receivables and its deposits with banks and landlords.

Trade receivables

The Company's only customer is that of Lebara Limited (Germany Division) whose customers excluding related parties comprise two large national distributors who purchase SIM cards and vouchers to sell to the market. Customer credit risk is managed by the Company's established credit policy (terms of up to 30 days), procedures and controls relating to customer credit risk management. Credit quality of a customer is assessed, and credit limits are defined in accordance with this assessment. The requirement for an impairment is analysed at each reporting date on an individual basis for these clients.

Cash deposits

Credit risk from balances with banks and financial institutions is managed in accordance with the Lebara group policy Investments of surplus funds are made only with approved counterparties and within credit limits assigned to each counterparty. The Company evaluates the concentration of risk with respect to cash deposits as low.

Liquidity risk

Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they fall due. The Company's approach for managing liquidity is to ensure, as far as possible, that it will have sufficient cash reserves readily available to meet its liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Company's reputation. In this respect, financing may be received from fellow group undertakings.

Interest rate risk

The Company has no interest-bearing liabilities and no interest-bearing assets other than its loans with group companies and cash.

Foreign exchange risk

Foreign currency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in foreign exchange rates. As the Company does not have any sales, purchases and balances denominated in foreign currencies, its exposure to foreign exchange risk is regarded as low.

Going concern

The financial statements have been prepared on a going concern basis which forecasts that the Company will have sufficient liquidity to meet its financial obligations for a period of at least 12 months from the date of this financial report.

A consolidated liquidity forecast, at the level of Lebara Group BV (the parent holding company), including entity level analysis, has been prepared for a period of more than 12 months from the date of approval of these financial statements. The forecast indicates that, whilst taking into account reasonable downsides, sufficient funds are expected to be generated within the Company so as to meet the liabilities of the Company as they fall due and in addition the directors have received assurances that if required Lebara Group BV will guarantee amounts receivable from group entities.

As part of their review the Directors have additionally considered the implications of Brexit and the current Coronavirus Pandemic on the going concern assumption.

At this stage Brexit is not deemed to significantly impact the operations and liquidity of the Company as UK telecommunication providers continue to be treated the same as a Company incorporated in any EU Member State until the end of the transition period on 31 December 2020, with a possible extension for up to another two years. However, uncertainty of outcomes remains as negotiations continue and the economic impact on the company as the UK leaves the European Union cannot be reliably determined at this time.

The economic impact on the business due to the Coronavirus Pandemic is subject to an unprecedented level of uncertainty with the full range of possible effects unknown. Sensitivity analyses have been applied to the consolidated liquidity forecasts to assess a range of potential impacts from the Coronavirus Pandemic. In the analyses, key business driver assumptions were modelled with varying degrees of impact and duration. Whilst there is evidence of potential negative effects on EBITDA and cashflows, the resulting sensitised liquidity forecasts continue to support the going concern assumption and the directors are confident that they can take sufficient mitigating action to ensure that available funds will be sufficient for the business needs.

Disclosure of information to auditor

The Director who held office at the date of approval of this Director's report confirm that, so far as he is aware, there is no relevant audit information of which the company's auditor is unaware; and the director has taken all the steps that he ought to have taken as a director to make himself aware of any relevant audit information and to establish that the Company's auditor is aware of that information.

Approved on Date: 24 April 2020

F. J. Pearce Director

7th Floor, Import Building, 2 Clove Crescent, London, England, E14 2BE

Statement of directors' responsibilities For the year ended 31 December 2019

The director is responsible for preparing the strategic report, director's report and the financial statements in accordance with applicable law and regulations.

Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards, comprising FRS 101 Reduced Disclosure Framework and applicable law). Under company law the director must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and the profit or loss of the company for that period.

In preparing these financial statements, the directors are required to:

•	select suitable accounting policies and then apply them consistently;
•	make judgements and accounting estimates that are reasonable and prudent;
•	state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements;
•	prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.

The director is responsible for keeping adequate accounting records that are sufficient to show and explain the company's transactions and disclose with reasonable accuracy at any time the financial position of the company and to enable them to ensure that the financial statements comply with the Companies Act 2006. The director is also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

Independent auditor's report to the members of Lebara Germany Limited For the year ended 31 December 2019

Opinion

We have audited the financial statements of Lebara Germany Limited ("the Company") for the year ended 31 December 2019 which comprise the Statement of comprehensive income, the Statement of financial position and the Statement of changes in Equity and notes to the financial statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 101 Reduced Disclosure Framework (United Kingdom Generally Accepted Accounting Practice).

In our opinion the financial statements:

•	give a true and fair view of the state of the company's affairs as at 31 December 2019 and of its profit for the year then ended;
•	have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
•	have been prepared in accordance with the requirements of the Companies Act 2006.

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) ("ISAs (UK)") and applicable law. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC's Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Conclusions relating to going concern

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

•	the directors' use of the going concern basis of accounting in the preparation of the financial statements is not appropriate; or
•	the directors have not disclosed in the financial statements any identified material uncertainties that may cast significant doubt about the company's ability to continue to adopt the going concern basis of accounting for a period of at least twelve months from the date when the financial statements are authorised for issue.

The impact of uncertainties due to Britain exiting the European Union on our audit

Uncertainties related to the effects of Brexit are relevant to understanding our audit of the financial statements.

All audits assess and challenge the reasonableness of estimates made by the directors, such as future cash flows and related disclosures and the appropriateness of the going concern basis of preparation of the financial statements. All of these depend on assessments of the future economic environment and the company's future prospects and performance.

Brexit is one of the most significant economic events for the UK, and at the date of this report its effects are subject to unprecedented levels of uncertainty of outcomes, with the full range of possible effects unknown. We applied a standardised firm-wide approach in response to that uncertainty when assessing the company's future prospects and performance. However, no audit should be expected to predict the unknowable factors or all possible future implications for a company and this is particularly the case in relation to Brexit.

Emphasis of Matter: COVID19

We draw attention to note 18 in the financial statements, which describes the directors' assessment of the current and future effects of the COVID 19 pandemic on the company. As stated in note 18, the company have amended its working practices to continue normal service levels and currently have sufficient cash resources to sustain these activities but the effects of COVID19 are subject to unprecedented levels of uncertainty of outcomes, with the full range of possible effects unknown. Our opinion is not modified in respect of this matter.

Other information

The director is responsible for the other information. The other information comprises the information included in the annual report, other than the financial statements and our auditor's report thereon. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon.

In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether there is a material misstatement in the financial statements or a material misstatement of the other information. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.

We have nothing to report in this regard.

Opinions on other matters prescribed by the Companies Act 2006

In our opinion, based on the work undertaken in the course of the audit:

•	the information given in the strategic report and the directors' report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
•	the strategic report and the directors' report have been prepared in accordance with applicable legal requirements.

Matters on which we are required to report by exception

In the light of our knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the strategic report and the directors' report.

We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:

•	adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or
•	the financial statements are not in agreement with the accounting records and returns; or
•	certain disclosures of directors' remuneration specified by law are not made; or
•	we have not received all the information and explanations we require for our audit.

Responsibilities of director

As explained more fully in the director's responsibilities statement set out on page 9, the director is responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the director determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

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

Auditor's responsibilities for the audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of the financial statements.

A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.

Use of our report

This report is made solely to the company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company's members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's members, as a body, for our audit work, for this report, or for the opinions we have formed.

Richard Vass (Senior Statutory Auditor)

For and on behalf of Price Bailey LLP, Statutory Auditor

Chartered Accountants

Dashwood House

69 Old Broad Street

London

EC2M 1QS

Date: 24 April 2020

Statement of comprehensive income For the year ended 31 December 2019

		2019	2018
	Notes	€'000	€'000
Turnover	2	12,378	12,570
Administrative expenses		(11,446)	(11,643)
Operating profit	3	932	927
Finance income	6	12	15
Finance cost	6	(170)	(113)
Profit before taxation		774	829
Tax on profit	7	(147)	(612)
Profit for the financial year		627	217

All of the activities of the Company are classed as continuing. The Company has no recognised other comprehensive income other than the results set out above.

The notes on pages 15 to 30 form an integral part of these financial statements.

Statement of financial position As at 31 December 2019

		2019	2018
	Notes	€'000	€'000
Fixed assets
Intangible assets	10	2	6
Tangible assets	8	31	48
Right of use assets	9	85
		118	54
Current assets
Debtors: (including €2,251k (2018: €2,397k) due after more than one year)	11	145,164	123,314
Cash at bank and in hand		598	1,217
Total current assets		145,762	124,531
Creditors: Amounts falling due within one year	13	(175,217)	(154,563)
Net current liabilities		(29,455)	(30,032)
Lease liabilities	9	(14)	-
Net Liabilities		(29,351)	(29,978)
Capital and reserves
Called-up share capital	14	-	-
Profit and loss account		(29,351)	(29,978)
Shareholder's deficit		(29,351)	(29,978)

The notes on pages 15 to 30 form an integral part of these financial statements.

The Company's registration number is 06830549.

These financial statements were approved by the Director:

24 April 2020

F.J.Pearce, Director

Statement of changes in equity For the year ended 31 December 2019

	Called up share capital	Profit and loss account	Total Equity
	€'000	€'000	€'000
As at 1 January 2018	-	(30,195)	(30,195)
Profit for the year		217	217
Total comprehensive income		217	217
As at 31 December 2018		(29,978)	(29,978)
Effect of the adoption of IFRS 16: Leases ¹	-	-	-
As at 1 January 2019	-	(29,978)	(29,978)
Profit for the year	-	627	627
Total comprehensive income		627	627
As at 31 December 2019	-	(29,351)	(29,351)

¹ There is no adjustment to retained earnings for 1st January 2019 due to the company electing to recognise right of use assets at an amount equal to the lease liability at the date of initial application in line with IFRS16 paragraph C8 b) ii).

The notes on pages 15 to 30 form an integral part of these financial statements.

1. Accounting policies

Lebara Germany Limited ("the Company") is a private company limited by shares incorporated and domiciled in England, United Kingdom. It has a branch which is registered in Germany.

Registered office and principal place of business is: 7th Floor, Import Building, 2 Clove Crescent, London, England, E14 2BE

These financial statements have been prepared in accordance with Financial Reporting Standard 101 Reduced Disclosure Framework ("FRS 101").

In preparing these financial statements, the Company applies the recognition, measurement and disclosure requirements of International Financial Reporting Standards as adopted by the EU, but makes amendments where necessary in order to comply with the Companies Act 2006 and has set out below where advantage of the FRS 101 disclosure exemptions has been taken.

The Company's intermediate parent undertaking, Lebara Group B.V. (a company incorporated in the Netherlands), includes Lebara Germany Limited in its consolidated financial statements. The consolidated financial statements of Lebara Group B.V. are prepared in accordance with International Financial Reporting Standards and are available to the public and may be obtained from Entrada 111, 1114 AA Amsterdam-Duivendrecht, Netherlands.

In these financial statements, the company has applied the exemptions available under FRS 101 in respect of the following disclosures:

•	Disclosures in respect of IAS 1 'Presentation of financial statements';

1.	statement of cash flows
2.	statement of compliance with all IFRS
3.	requirement for minimum of two primary statements, including cash flows
4.	cash flow statement information
5.	capital management disclosures

•	Disclosures in respect of paragraph 38 of IAS 1 in relation to paragraph 73(e) of IAS 16 Property, Plant and Equipment and paragraph 118(e) of IAS 38 Intangible Assets.
•	Disclosures in respect of paragraph 52 and 58 of IFRS 16 - Accounting for Leases
•	Disclosures in respect of IAS 7 Statement of Cash Flows
•	Disclosures in respect of paragraphs 17 and 18A of IAS 24 'Related party disclosures';
•	The requirements of IAS 24 Related Party Disclosures to disclose related party transactions entered into between two or more members of the group
•	The requirements of IFRS 7 Financial instruments: Disclosures;
•	The requirements of the second sentence of paragraph 110 and paragraphs 113(a), 114, 115,118,119 (a) to (c), 120 to 127 and 129 of IFRS 15 Revenue from Contracts with Customers.
•	Disclosures in respect of IAS 8, 'Accounting policies, changes in accounting estimates and errors';

1.	the effects of new but not yet effective International Financial Reporting Standards

The Company proposes to continue to adopt the reduced disclosure framework of FRS 101 in its next financial statements.

The accounting policies set out below have, unless otherwise stated, been applied consistently to all periods presented in these financial statements.

a) Measurement convention

The financial statements are prepared on the historical cost basis. The functional currency of the Company is Euro.

b) Going concern

The financial statements have been prepared on a going concern basis which forecasts that the Company will have sufficient liquidity to meet its financial obligations for a period of at least 12 months from the date of this financial report.

A consolidated liquidity forecast, at the level of Lebara Group BV (the parent holding company), including entity level analysis, has been prepared for a period of more than 12 months from the date of approval of these financial statements. The forecast indicates that, whilst taking into account reasonable downsides, sufficient funds are expected to be generated within the Company so as to meet the liabilities of the Company as they fall due and in addition the directors have received assurances that if required Lebara Group BV will guarantee amounts receivable from group entities.

As part of their review the Directors have additionally considered the implications of Brexit and the current Coronavirus Pandemic on the going concern assumption.

At this stage Brexit is not deemed to significantly impact the operations and liquidity of the Company as UK telecommunication providers continue to be treated the same as a Company incorporated in any EU Member State until the end of the transition period on 31 December 2020, with a possible extension for up to another two years. However, uncertainty of outcomes remains as negotiations continue and the economic impact on the company as the UK leaves the European Union cannot be reliably determined at this time.

The economic impact on the business due to the Coronavirus Pandemic is subject to an unprecedented level of uncertainty with the full range of possible effects unknown. Sensitivity analyses have been applied to the consolidated liquidity forecasts to assess a range of potential impacts from the Coronavirus Pandemic. In the analyses, key business driver assumptions were modelled with varying degrees of impact and duration. Whilst there is evidence of potential negative effects on EBITDA and cashflows, the resulting sensitised liquidity forecasts continue to support the going concern assumption and the directors are confident that they can take sufficient mitigating action to ensure that available funds will be sufficient for the business needs.

c) New standards, amendments and IFRIC Interpretations

IFRS 16 is the new accounting standard that is effective for the year ended 31 December 2019. IFRS 16 has had a material impact on the Company (see note 16 and 17). There are no other amendments to accounting standards, or IFRIC interpretations that are effective for the year ended 31 December 2019 which have had a material impact on the Company.

d) Turnover

General

Turnover relates to costs plus transfer pricing adjustments recognised for services performed for other group companies. Such services are charged to the other group companies in terms of the agreement between the Company and other group companies and are recognised as income on a monthly basis as the services are provided. The group companies are invoiced at an annual basis and consideration is payable when invoiced.

Support and service fees

The Company performs services on behalf of Lebara Limited, a fellow subsidiary. Such services are charged to Lebara Limited in terms of the agreement between the Company and Lebara Limited and are recognised as income on a monthly basis as the services are provided.

Interest income

Interest income is recognised as interest accrues using the effective interest method.

e) Intangible assets

Intangible assets that are acquired by the Company are stated at cost less accumulated amortisation and less accumulated impairment losses.

Amortisation

Amortisation is charged to the profit and loss account on a straight-line basis over the estimated useful lives of the intangible assets. The estimated useful lives of the Company's capitalised development costs and other software is between 3 and 5 years.

f) Tangible fixed assets

Tangible fixed assets are stated at cost less depreciation and accumulated impairment losses. Where parts of an item of tangible fixed assets have different useful lives, they are accounted for as separate items of tangible fixed assets.

Depreciation is charged to the profit and loss account on a straight-line basis over the estimated useful lives of each part of an item of tangible fixed assets. The estimated useful lives are as follows:

Leasehold improvements	- Over the period of the lease
Office equipment	- 8 years
Computer hardware and software	- 3 years

g) Provisions

A provision is recognised on the balance sheet when the Company has a present legal or constructive obligation as a result of a past event that can be reliably measured, and it is probable that an outflow of economic benefits will be required to settle the obligation.

h) Taxation

Tax on the profit or loss for the year comprises current and deferred tax. Tax is recognised in the profit and loss account except to the extent that it relates to items recognised directly in equity or other comprehensive income, in which case it is recognised directly in equity or other comprehensive income.

Current tax is the expected tax payable or receivable on the taxable income or loss for the year, using tax rates enacted or substantively enacted at the balance sheet date, and any adjustment to tax payable in respect of previous years.

Deferred tax is provided on temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. The amount of deferred tax provided is based on the expected manner of realisation of settlement of the carrying amount of assets and liabilities, using tax rates enacted or substantively enacted at the balance sheet date. A deferred tax asset is recognised only to the extent that it is probable that future taxable profits will be available against which the temporary difference can be utilised to a maximum of 7 years of losses.

i) Foreign currencies

Transactions in foreign currencies are translated to the Company's functional currency at the foreign exchange rate ruling at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies at the balance sheet date are retranslated to the functional currency at the foreign exchange rate ruling at that date. Foreign exchange differences arising on translation are recorded in the profit and loss account.

j) Leases

The company leases an office and motor vehicles. Rental contracts are typically made for fixed periods but may have extension options.

Contracts may contain both lease and non-lease components. The company allocates the consideration in the contract to the lease and non-lease components based on their relative stand-alone prices. However, for leases of real estate for which the company is a lessee and for which it has major leases, it has elected not to separate lease and non-lease components and instead accounts for these as a single lease component.

Lease terms are negotiated on an individual basis and contain a wide range of different terms and conditions. The lease agreements do not impose any covenants other than the security interests in the leased assets that are held by the lessor. Leased assets may not be used as security for borrowing purposes.

Until the 2018 financial year, leases of property, plant and equipment were classified as operating leases. From 1 January 2019, leases are recognised as a right-of-use asset and a corresponding liability at the date at which the leased asset is available for use by the company.

Assets and liabilities arising from a lease are initially measured on a present value basis. Lease liabilities include the net present value of the following lease payments:

•	Fixed payments (including in-substance fixed payments), less any lease incentives receivable;
•	Amounts expected to be payable by the company under residual value guarantees;
•	The exercise price of a purchase option if the company is reasonably certain to exercise that option; and
•	Payments of penalties for terminating the lease, if the lease term reflects the company exercising that option.

Lease payments to be made under reasonably certain extension options are also included in the measurement of the liability.

The lease payments are discounted using the interest rate implicit in the lease. If that rate cannot be readily determined, which is generally the case for leases in the company, the lessee's incremental borrowing rate is used, being the rate that the individual lessee would have to pay to borrow the funds necessary to obtain an asset of similar value to the right-of-use asset in a similar economic environment with similar terms, security and conditions.

Lease payments are allocated between principal and finance cost. The finance cost is charged to profit or loss over the lease period to produce a constant periodic rate of interest on the remaining balance of the liability for each period.

Right-of-use assets are measured at cost comprising the following:

•	The amount of the initial measurement of lease liability;
•	Any lease payments made at or before the commencement date less any lease incentives received;
•	Any initial direct costs; and

• Restoration costs.

Right-of-use assets are generally depreciated over the shorter of the asset's useful life and the lease term on a straight-line basis. If the company is reasonably certain to exercise a purchase option, the right-of-use asset is depreciated over the underlying asset's useful life. The company has chosen not to revalue for the right-of-use buildings held by the company.

Payments associated with short-term leases of equipment and vehicles and all leases of low-value assets are recognised on a straight-line basis as an expense in profit or loss. Short-term leases are leases with a lease term of 12 months or less. Low-value assets comprise IT equipment and small items of office furniture Information about critical accounting estimates and judgements in the application of lease accounting is disclosed in note 16.

As explained in note 17, the company has changed its accounting policy for leases where the company is the lessee. The impact of the change is explained in note 17.

Leases in which a significant portion of the risks and rewards of ownership were not transferred to the company as lessee were classified as operating leases. Payments made under operating leases (net of any incentives received from the lessor) were charged to profit or loss on a straight-line basis over the period of the lease.

k) Employee benefits

Termination benefits

Termination benefits are recognised as an expense when the Company has demonstrably committed to a formal detailed plan to either terminate employment before the normal retirement date or to provide termination benefits as a result of an offer made to encourage voluntary redundancy. Termination benefits for voluntary redundancies are recognised as an expense if the Company has made an offer of voluntary redundancy, it is probable that the offer will be accepted, and the number of acceptances can be estimated reliably.

I) Non-derivative financial instruments

Non-derivative financial instruments comprise trade and other debtors, cash and cash equivalents, interestbearing intercompany loans, and trade and other creditors.

Trade and other debtors

Trade and other debtors are recognised initially at fair value. Subsequent to initial recognition, they are measured at amortised cost using the effective interest method, less any impairment losses.

Cash and cash equivalents

Cash and cash equivalents comprise cash balances and call deposits. Bank overdrafts that are repayable on demand and form an integral part of the Company's cash management are included as a component of cash and cash equivalents.

Interest-bearing intercompany loans

Interest-bearing intercompany loans are recognised initially at fair value. Subsequent to initial recognition, they are stated at amortised cost using the effective interest rate method.

Trade and other creditors

Trade and other creditors are recognised initially at fair value. Subsequent to initial recognition, they are measured at amortised cost using the effective interest rate method.

m) Impairment

Financial assets

IFRS 9 replaces the 'incurred loss' model in IAS 39 with an 'expected credit loss' (ECL) model. The new impairment model applies to financial assets measured at amortised cost and contract assets. The financial assets at amortised cost consist of deposits, trade receivables and cash and cash equivalents.

The company measures loss allowances at an amount equal to 12-month ECLs for deposits and bank balances for which credit risk (i.e. the risk of default occurring over the expected life of the financial instrument) has not increased significantly since initial recognition.

The company measures loss allowances for trade receivables at an amount equal to lifetime ECLs. The impairment provision on financial assets measured at amortised cost have been calculated in accordance with IFRS 9's expected credit loss provision, which differs from the incurred loss model previously required by IAS 39.

Non-financial assets

The carrying amounts of the Company's non-financial assets, other than stocks, are reviewed at each reporting date to determine whether there is any indication of impairment. If any such indication exists, then the asset's recoverable amount is estimated. An impairment loss is recognised if the carrying amount of an asset exceeds its recoverable amount. Impairment losses are recognised in profit or loss.

2. Turnover

The turnover and profit before tax is attributable to the Company's principal activity.

3. Expenses and auditor's remuneration

Operating profit is stated after charging:

		2019	2018
	Note	€'000	€'000
Auditor's remuneration: audit fees		63	60
Depreciation	8	30	34
Amortisation	10	4	19

4. Staff numbers and costs

The average number of persons employed by the Company (including directors) during the year, analysed by category, was as follows:

	2019	2018
Sales and marketing	46	51
Administration	19	23
Total	65	74

The aggregate payroll costs of these persons were as follows:

	2019	2018
	€'000	€'000
Employee benefits expense (excluding restructuring costs)	5,273	5,612
Salaries and wages	4,588	4,837
Social security costs	685	775

The Company does not operate a defined contribution pension scheme. It only pays social security for state pensions.

5. Directors' remuneration

The Directors' aggregate remuneration in respect of qualifying services to the Company is as follows:

	2019	2018
	€'000	€'000
Remuneration receivable	108	333

The remuneration of the highest paid director is €108,447 (2018: €319,396). There were no (2018: none) contributions to pension schemes made by the director during the year.

6. Finance income and Finance cost

	2019	2018
	€'000	€'000
Related party interest receivable	12	15

	2019	2018
	€'000	€'000
Bank Interest payable	29	-
Related party interest payable	127	113
Interest expense on leases	14	-
	170	113

7. Tax on profit

Recognised in the profit and loss account	2019	2018
	€'000	€'000
Current tax
Current tax on income for the period	1	-
Adjustments in respect of prior periods	-	22
	1	22
Deferred tax
De-recognition of deferred tax asset	146	590
	146	590
Total income tax charge for the period	147	612

Reconciliation of effective tax rate

The reconciliation between profit before tax and tax expense for the year is as follows:

	2019	2018
	€'000	€'000
Profit before taxation	774	829
Income tax at the tax rate of 30% (2018: 31%)	232	257
Non-deductible expenses	70	-
Utilisation of tax losses	(301)	(257)
Overprovided in prior years		22
Derecognition of deferred tax asset	146	590
Total tax charge for the period	147	612

8. Tangible assets

	Computer equipment	Furniture & fittings	Leasehold improvements	Total
	€'000	€'000	€'000	€'000
Cost
As at 31 December 2018	104	70	21	195
Additions	13	-	-	13
As at 31 December 2019	117	70	20	208
Accumulated depreciation
As at 31 December 2018	(81)	(59)	(7)	(147)
Depreciation	(15)	(6)	(9)	(30)
As at 31 December 2019	(96)	(65)	(16)	(177)
Net book value
31 December 2019	16	10	5	31
31 December 2018	23	11	14	48

The depreciation of the tangible fixed assets was charged to the administrative expenses line in the Statement of Comprehensive Income.

9. Leases

Right of use assets

	Property	Motor Vehicle	Total
	€'000	€'000	€'000
Cost
As at 1 January 2019	223	40	263
As at 31 December 2019	223	40	263
Accumulated depreciation
Depreciation	(149)	(29)	(178)
As at 31 December 2019	(149)	(29)	(178)
Net book value
31 December 2019	74	11	85

Lease liabilities

	Property	Motor Vehicle	Total
	€000	€000	€000
Cost
As at 1 January 2019	222	40	262
Lease payment	(157)	(30)	(187)
Interest incurred	12	2	14
As at 31 December 2019	77	12	89

	2019	2018
	€'000	€'000
Lease liability within one year	75	-
Lease liability more than one year	14	-
	89

	2019	2018
Amounts recognised in the income statement	€'000	€'000
Interest expense (included in finance cost)	14	-
Expense relating to leases of low value	3	-
Expense relating to short term leases	361	-
Cash outflow for lease
Total cash outflow for leases	538	590

10. Intangible assets

	Software and development costs	Total
	€'000	€'000
Cost
As at 1 January 2019	65	65
Disposal	(53)	(53)
As at 31 December 2019	12	12
Accumulated amortisation
As at 1 January 2019	(59)	(59)
Amortisation	(4)	(4)
Disposal	53	53
As at 31 December 2019	(10)	(10)
Net book value
31 December 2019	2	2
31 December 2018	6	6

The amortisation of the intangible assets was charged to the administrative expenses line in the Statement of Comprehensive Income.

11. Debtors

Amounts falling due within one year

		2019	2018
	Notes	€'000	€'000
Trade receivables		4,757	2,902
Amounts owed by group undertakings		137,442	116,954
Sales tax receivable		230	128
Prepayments		10	35
Corporation tax		474	898
		142,913	120,917
Amounts falling due greater than one year
Rental and other deposits		59	59
Deferred tax	12	2,192	2,338
		2,251	2,397
		145,164	123,314

Amounts owed by group undertakings are unsecured, bear interest at EURIBOR (12 months) + 1.88% and are repayable on demand.

12. Deferred taxation

	2019	2018
	€'000	€'000
Tax losses carried forward	2,192	2,338

Movement during the year is as follows:

	2019	2018
	€'000	€'000
At beginning of the year	2,338	2,928
Charge to profit and loss during the year	(146)	(590)
At the end of the year	2,192	2,338

13. Creditors: Amounts falling due within one year

	2019	2018
	€'000	€'000
Trade creditors	184	339
Amounts owed to group undertakings	172,993	152,891
Payroll taxes	-	93
Share in Success Liability	430	490
Lease liability within one year	75	-
Accruals and other payables	1,535	750
	175,217	154,563

Amounts owed to group undertakings, excluding current payable balances in respect of monthly charges, are unsecured, charge interest at EURIBOR (12 months) + 1.88%, and are repayable on demand. The Company's fellow subsidiary, Lebara Limited, has provided a letter of support to the Company outlining its intentions to provide financial support for a minimum of 12 months from the date of this financial report.

14. Called-up share capital

	2019	2018
	€'000	€'000
Authorised
100 ordinary shares of £1 (€1.13) each	-	-
Allotted, called up and fully paid
100 ordinary shares of £1 (€1.13) each	-	-

15. Related parties

Controlling entity

In the normal course of business, the company enters into various transactions with related parties. Parties are considered to be related if one party has the ability to control or exercise significant influence over the other party in making financial or operating decisions. The following parties are considered related parties of the Lebara Service Centre Limited:

The Company's parent company and related compananies that has control over its parent comnpany

•	Between September 2017 to July 2019: VIEO B.V., VIEO A.G. (formerly Palmarium Finance A.G.), Palmarium Capital AG, Palmarium AG and Palmarium Advisors AG. Directors of these entities - Suzanei Archer, Raphael Auerbach, Alex Zito and Patrick Wild.
•	From 31 July 2019 until 8 January 2020: Stichting Administratiekantoor Lithium (the "STAK"), incorporated in Netherlands, being the ultimate shareholder of VIEO B.V.

The smallest group in which the results of the Company are consolidated is that headed by Lebara Group B.V. The consolidated financial statements of Lebara Group B.V. may be obtained from the registered office: Entrada 111, 1114AA Amsterdam-Duivendrecht, Netherlands.

16. Accounting estimates and judgements

The preparation of the Company's financial statements requires management to make judgements, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, and the accompanying disclosures, and the disclosure of contingent liabilities. Uncertainty about these assumptions and estimates could result in outcomes that require a material adjustment to the carrying amount of assets or liabilities affected in future periods.

Management have identified the following accounting estimate and assumption which it considers to be critical due to its impact on the company's financial statements.

Deferred tax

Deferred tax assets are recognised for unused tax losses to the extent that it is probable that taxable profit will be available against which the losses can be utilised

Judgement is required when determining the probable future taxable profits. The Company has assessed the availability of future taxable profits using a seven-year forecast of the Company's operation.

Changes in the assumptions which underpin the forecast of the Company's operations could have an impact on the amount of future taxable profits and consequently on the period over which the deferred tax asset would be recovered.

Leases

Estimates

The lease payments are discounted using the interest rate implicit in the lease. If that rate cannot be readily determined, which is generally the case for leases in the company, the lessee's incremental borrowing rate is used, being the rate that the individual lessee would have to pay to borrow the funds necessary to obtain an asset of similar value to the right-of-use asset in a similar economic environment with similar terms, security and conditions.

•	To determine the incremental borrowing rate, the company:
•	Where possible, uses recent third-party financing received by the individual lessee as a starting point, adjusted to reflect changes in financing conditions since third party financing was received;
•	Uses a build-up approach that starts with a risk-free interest rate adjusted for credit risk for leases held by the company, which does not have recent third party financing; and
•	Makes adjustments specific to the lease, e.g. term, currency and security.

The company used the borrowing rate of 8.582% taken from the bonds issued in Vieo B.V. A 100-basis point increase/(decrease) in the rate would cause the lease liabilities to (reduce)/increase by €193 and a corresponding (decrease)/increase in the right-of-use assets by the €566.

Judgements

In determining the lease term, management considers all facts and circumstances that create an economic incentive to exercise an extension option, or not exercise a termination option. Extension options (or periods after termination options) are only included in the lease term if the lease is reasonably certain to be extended (or not terminated).

For leases of offices and equipment, the following factors are normally the most relevant:

•	If there are significant penalties to terminate (or not extend), the company is typically reasonably certain to extend (or not terminate).
•	If any leasehold improvements are expected to have a significant remaining value, the company is typically reasonably certain to extend (or not terminate).
•	Otherwise, the company considers other factors including historical lease durations and the costs and business disruption required to replace the leased asset.

Most extension options in offices and vehicles leases have not been included in the lease liability, because the company could replace the assets without significant cost or business disruption.

As at 31 December 2019, potential future cash outflows of €Nil (undiscounted) have not been included in the lease liability because it is not reasonably certain that the leases will be extended (or not terminated).

The lease term is reassessed if an option is actually exercised (or not exercised) or the company becomes obliged to exercise (or not exercise) it. The assessment of reasonable certainty is only revised if a significant event or a significant change in circumstances occurs, which affects this assessment, and that is within the control of the lessee. During the current financial year, the financial effect of revising lease terms to reflect the effect of exercising extension and termination options was an increase in recognised lease liabilities and rieht- of-use assets of €Nil.

iii. Measurement of right-of-use assets

The right-of-use assets were measured at the amount equal to the lease liability, adjusted by the amount of any prepaid or accrued lease payments relating to that lease recognised in the balance sheet as at 31 December 2018.

iv. Adjustments recognised in the statement of financial position on 1st January 2019

	Note
		€'000
Right-of-use assets increase	9	262
		262
Lease liabilities increase		(262)
		(262)
Net impact on retained earnings on 1 January 2019		-

18. Post balance sheet events

On 9 January 2020, the Company's ultimate parent company changed to Lithium Topco Limited, a company registered in Jersey. This change in ownership has no direct effect on the Company's operations.

The Coronavirus Pandemic in 2020 is a non-adjusting post balance sheet event and therefore no adjustments have been made to these financial statements for the economic impact that may arise.

It is recognised that the effects of the Coronavirus Pandemic are subject to unprecedented levels of uncertainty of outcomes, with the full range of possible effect unknown. For example, the full effect on the economies across Europe in which the company operates cannot be ascertained. This could lead to future material adverse impacts on the activities of the business due to factors outside of the control of the Board.

The company has adopted flexible remote working practices and other measures to continue normal service levels and the director has considered a range of financial outcomes to conclude that the company has sufficient cash resources to continue its activities. As events evolve the directors will take all necessary measures to minimise where possible the negative economic impacts on the business.

17. Changes in accounting policies

Effect of the adoption of IFRS 16 - Leases

As indicated in notes 1 and 9, the company has adopted IFRS 16 Leases retrospectively from 1 January 2019 but has not restated comparatives for the 2018 reporting period, as permitted under the specific transition provisions in the standard. The reclassifications and the adjustments arising from the new leasing rules are therefore recognised in the opening balance sheet on 1 January 2019. The new accounting policies are disclosed in note 1.

On adoption of IFRS 16, the company recognised lease liabilities in relation to leases which had previously been classified as 'operating leases' under the principles of IAS 17 Leases. These liabilities were measured at the present value of the remaining lease payments, discounted using the lessee's incremental borrowing rate as of 1 January 2019. The incremental borrowing rate applied to the lease liabilities on 1 January 2019 was 8.582%.

i. Practical expedients applied

In applying IFRS 16 for the first time, the company has used the following practical expedients permitted by the standard:

•	Applying a single discount rate to a portfolio of leases with reasonably similar characteristics;
•	Relying on previous assessments on whether leases are onerous as an alternative to performing an impairment review - there were no onerous contracts as at 1 January 2019;
•	Accounting for operating leases with a remaining lease term of less than 12 months as at 1 January 2019 as short-term leases;
•	Excluding initial direct costs for the measurement of the right-of-use asset at the date of initial application; and
•	Using hindsight in determining the lease term where the contract contains options to extend or terminate the lease.

The company has also elected not to reassess whether a contract is, or contains a lease at the date of initial application. Instead, for contracts entered into before the transition date the company relied on its assessment made applying IAS 17 and IFRIC 4 Determining whether an Arrangement contains a Lease.

ii. Measurement of lease liabilities

	€'000
Operating lease commitments disclosed as at 31 December 2018	323
(Less): Short term leases not recognised as a liability	(35)
(Less): low-value leases not recognised as a liability	(10)
	278
Discounted using the lessee's incremental borrowing rate of 8.582% at the date of initial application	(16)
Lease liability recognised as at 1 January 2019	262