LEI: 213800FLQUB9J289RU66
3 April 2024
BATM Advanced
Communications Limited
("BATM", the "Group" or the
"Company")
ANNUAL FINANCIAL REPORT - DTR
6.3.5 Disclosure
Following the release on 12 March
2024 of the Group's preliminary results announcement for the
financial year ended 31 December 2023 (the "Preliminary
Announcement"), BATM announces that the Company's annual report and
accounts for the year ended 31 December 2023 (the "2023 Annual
Report and Accounts") have been published today and is publicly
available in the Investor Relations section under Financial Reports
on the BATM website (www.batm.com). The direct link is
http://www.batm.com/investor-relations/financial-statements/.
In compliance with 9.6.1 of the
Listing Rules, a copy of the 2023 Annual Report and Accounts will
shortly be available for inspection on the FCA's National Storage
Mechanism website:
https://data.fca.org.uk/#/nsm/nationalstoragemechanism.
The primary purpose of this
announcement is to inform the market of the publication of the 2023
Annual Report and Accounts.
The information below, which is
extracted from the 2023 Annual Report and Accounts, is included
solely for the purpose of complying with DTR 6.3.5 and the
requirements it imposes on issuers as to how to make public annual
financial reports. It should be read in conjunction with the
Group's Preliminary Announcement. Together these constitute the
material required by DTR 6.3.4 to be communicated to the media in
unedited full text through a Regulatory Information Service. This
material is not a substitute for reading the full 2023 Annual
Report and Accounts. References to page numbers and notes to the
accounts set out in the Appendices below refer to page numbers and
notes to the accounts in the Group's 2023 Annual Report and
Accounts.
The Preliminary Announcement
includes an indication of the important events that occurred during
the year and a condensed set of the financial
statements.
The Group's auditor has reported on
the accounts and its report is unqualified. The Independent
Auditor's Report on the Group financial statements is set out in
full on pages 63-66 of the 2023 Annual Report and
Accounts.
APPENDIX A - DIRECTORS'
RESPONSIBILITY STATEMENT
The 2023 Annual Report and Accounts
contain a responsibility statement in compliance with paragraph
4.1.12 of the DTR. The directors' responsibility statement is set
out on pages 61-62 of the 2023 Annual Report and Accounts for the
Group. This statement is set out below in full and unedited
text:
The Directors are responsible for
preparing the Annual Report, the Directors' Remuneration Report and
the financial statements in accordance with applicable laws and
regulations. The Directors are required to prepare financial
statements for the Company in accordance with International
Financial Reporting Standards as issued by the International
Accounting Standards Board. Israeli company law holds the Directors
responsible for preparing such financial statements and requires
the Directors to approve them.
International Accounting Standard 1
requires that financial statements present fairly for each
financial year the Company's financial position, financial
performance and cash flows. This requires the faithful
representation of the effects of transactions, other events and
conditions in accordance with the definitions and recognition
criteria for assets, liabilities, income and expenses set out in
the International Accounting Standards Board's 'Framework for the
Preparation and Presentation of Financial Statements'. In virtually
all circumstances, a true and fair presentation will be achieved by
compliance with all applicable International Financial Reporting
Standards.
Directors are also required
to:
· properly select and apply accounting policies;
· present information, including accounting policies, in a
manner that provides relevant, reliable, comparable and
understandable information;
· make
an assessment of the Company's ability to continue as a going
concern and disclose where they consider it appropriate;
and
· provide additional disclosures when compliance with the
specific requirements in IFRS is insufficient to enable users to
understand the impact of particular transactions, other events and
conditions on the entity's financial position and financial
performance.
The Directors are responsible for
keeping proper accounting records that disclose with reasonable
accuracy at any time the financial position of the Company, for
safeguarding the assets, for taking reasonable steps for the
prevention and detection of fraud and other irregularities and for
the preparation of a Directors' Report and Directors' Remuneration
Report that comply with the Listing Rules and the Disclosure and
Transparency rules.
Legislation in Israel governing the
preparation and dissemination of financial statements may differ
from legislation in other jurisdictions.
Each of the Directors confirms to
the best of his or her knowledge:
1. the financial
statements, prepared in accordance with International Financial
Reporting Standards, give a true and fair view of the assets,
liabilities, financial position and profit or loss of the Company
and the undertakings included in the consolidation taken as a
whole;
2. the strategic report
includes a fair review of the development and performance of the
business and the position of the Company and the undertakings
included in the consolidation taken as a whole, together with a
description of the principal risks and uncertainties they face;
and
3. the annual report and
financial statements, taken as a whole, are fair, balanced, and
understandable, and provide the information necessary for
shareholders to assess the Company's position, performance,
business model and strategy.
APPENDIX B - RISKS AND
UNCERTAINTIES
The principal risks and
uncertainties are set out on pages 28-29 of the 2023 Annual Report
and Accounts. The full and unedited text relating to these
disclosures are set out below:
The risks outlined below are those
that the Board considers to be material to the Group. The Board
routinely monitors risks that could materially adversely affect the
ability of the Group to achieve its strategic goals and to maintain
financial stability, assisted by the senior management
team.
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Risk
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How
we manage the risk
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Risk
change
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Political and economic
|
There is a risk of harm to the
business from political unrest or disruption, particularly in
emerging markets, and from a deterioration of economic
conditions.
|
The Group's operations are dispersed
over a number of locations so that should a material adverse
political or economic event arise in one location, the Group can
continue with its operations elsewhere, thereby helping to mitigate
the impact on its overall business.
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Up
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Legal and compliance
|
There is a risk that legal and/or
regulatory requirements are not met, leading to the loss of licence
to operate, reputational damage or financial loss.
|
The Group retains experienced high
calibre legal advisers for the Company and main subsidiaries in the
Group who provide ongoing advice and updates on relevant legal
compliance requirements. The Group monitors the regulations
relevant to its activities and, when needed, makes the necessary
adjustments to maintain compliance.
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Down
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Business continuity
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There are risks to business
continuity from specific events, such as natural disasters and
pandemics.
|
The Group operates in numerous
locations and its manufacturing contractors are also located in
multiple locations, which would help to mitigate the impact of a
business disaster. The key employees in the workforce have been
positioned such that they are able to work without interruption by
working remotely from their homes. The Group also keeps a cash
cushion to ensure that unexpected events don't cause unnecessary
indirect adverse effects beyond the direct outcomes.
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No change
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Supply chain
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A disruption in the supply of key raw
materials or services to a manufacturing site could affect the
Group's ability to make and deliver products to customers, leading
to interruption in supply, lost revenue and damage to its
reputation as a reliable supply partner. This could be resulting
from market shortages, disruption due to global events and physical
climate-related disruption of upstream supply chains.
|
The Group has established strong
supplier relationships and collaborates with multiple vendors
globally to broaden the geographical coverage of its access to
available components. The Group requests that customers provide
long-term committed forecasts and itself provides multi-year
forecasts to its contract manufacturers. In addition, where
appropriate, it reengineers products to enable them to have
replaceable component alternatives. At times when availability of
components is constrained, the Group seeks alternative sources and
to increase inventory levels of both components and finished
goods.
|
No change
|
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Competition
|
There is a risk that BATM is unable
to build and maintain competitive advantage in its focus markets.
In particular, there is a risk that competitors with greater
financial resources may develop technology that is superior to that
of the Group and they may also adopt more aggressive pricing models
or undertake more extensive advertising and marketing
campaigns.
|
The Group operates in large markets,
but with a focus on areas where it can establish a leadership
position through technological expertise and innovation. The
diversification of its end markets reduces its exposure to a large
competitor in any one sector. The Group ensures that its products
remain world-leading through investment in R&D. It maximises
its resources and enhances its routes-to-market by establishing
partnerships, collaborations and joint ventures.
|
No change
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|
Customers and partners
|
There is a risk of harm to the
Group's revenues as a result of termination of business
relationships with material customers or partners and sales agents.
This risk is increased by the challenging global macroeconomic
conditions and the impact that this could have on the business and
viability of customers and partners.
|
The Group maintains ongoing dialogue
with its customers and business partners in order to identify ahead
of time any potential problems arising on the part of the customer
and in order to maintain a close relationship with its customers.
The Group also does not have a significant reliance on one or few
customers or partners.
|
Up
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Research & Development
(R&D)
|
There is a risk that R&D
programmes overrun or do not deliver the expected
benefits.
|
With respect to its R&D, the
Group's strategy has been to diversify its R&D operations among
a variety of teams, internally and externally (through universities
and hospitals that carry out clinical tests) and by using different
R&D funding sources - thus reducing the R&D risk. In
addition, any significant new R&D projects are brought to the
Board for consideration. Still, the Group considers certain level
of risk as inherent to R&D activity, and views R&D activity
as valuable to the Group despite that risk.
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No change
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Information security (including cyber
security)
|
There is a risk of information
security, data loss and corruption, and physical damage to IT
infrastructure.
|
The Group routinely carries out
proactive measures, such as IT evaluations, to ensure that its IT
systems have the latest cyber security tools and security
procedures in place. These procedures include implementing security
controls and staff training.
|
Up
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Market risk
|
There is a risk that changes in
market prices, such as foreign exchange, inflation and interest
rates, will lead to financial loss.
|
The Group's finance department at the
corporate level manages and monitors market conditions and
exposure. Most of the cash, income and expenses in each company or
subsidiary is held in a way to reduce the Group's exposure to
currency fluctuations. When this is not possible, the Group uses
hedging transactions when needed to protect itself against
potential currency risk. However, this is only done to a certain
extent as the Board believes it is very difficult to hedge against
currency fluctuations arising from translation in consolidation in
a cost-effective manner.
The Group also monitors the impact of
the inflation and adjusts sales prices to maintain its margins. The
Group's exposure to interest rate risk is low as it has relatively
low bank debt. However, due to the impact of changes in interest
rates on the financial markets, the Group closely monitors possible
indirect impacts.
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No change
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All of the risk categories have
elements related to climate change. For further information on the
Group's climate-related risk management, please see the 'Strategy'
and 'Risk Management' sections of the TCFD Report on pages 21 to
26.
Enquiries
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BATM
Advanced Communications
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Moti Nagar, Chief Executive
Officer
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+972 9866
2525
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Ran Noy, Chief Financial
Officer
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Shore Capital
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Mark Percy, Anita Ghanekar, James
Thomas (Corporate Advisory)
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+44 20 7408 4050
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Gracechurch Group
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Harry Chathli, Claire
Norbury
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+44 20 4582 3500
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Forward-looking
statements
This document contains
forward-looking statements. Those statements reflect the current
opinions, evaluations and estimations of the Group's management,
and are based on the current data regarding the Group's business as
is detailed in this document and in the Group's periodical, interim
and immediate reports. The Group does not undertake any obligation
or make any representation that actual results and events will be
in line with those statements, and stresses that they may differ
materially from those statements, due to changes in the Group's
business, market, competition, demand for the Group's products or
services, general economic factors or other factors that can
influence the Group's business and results, due to the risk factors
that are detailed in the Group's Annual Report, and due to
information and factors that are currently unknown to the Group's
management and that, if known, would affect the management's
opinions, evaluations or estimations. The Group will report the
actual results and events according to its legal, accounting and
regulatory obligations, and does not undertake any other obligation
to report them or their deviations from the forward-looking
statements, or to update any of the forward-looking statements in
this document or to report that it is not valid
anymore.