Gfinity plc
Annual Report &
Financial Statements
2020
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GFINITY plc | Annual Report & Financial Statements 2020 2
GFINITY plc | Annual Report & Financial Statements 2020 Contents
STRATEGIC REPORT
Directors, Secretary and Advisers
Period Highlights
Gfinity At A Glance
Chairman’s Report
Chief Executive Officer’s Report
Chief Financial and Operating Officer’s Report
Principal Risks and Uncertainties
GOVERNANCE
Corporate Governance
Board of Directors
Board Composition and Performance
Directors’ Remuneration Report
Directors Report
Statement of Directors’ Responsibilities
FINANCIAL STATEMENTS
Independent Auditor’s Report
Group Statement of Profit and Loss
Group Statement of Comprehensive Income
Group Statement of Financial Position
Company Statement of Financial Position
Group Statement of Changes in Equity
Company Statement of Changes in Equity
Group Statement of Cash Flows
Company Statement of Cash Flows
Notes to the Financial Statements
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GFINITY plc | Annual Report & Financial Statements 2020
Annual Report & Financial Statements 2020
STRATEGIC REPORT
GFINITY plc | Annual Report & Financial Statements 2020
STRATEGIC REPORT
Directors, Secretary and Advisers
Legal Advisers
Corporate
Fladgates
16 Great Queen Street
London WC2B 5DG
Commercial
Onside Law
642A Kings Road
Fulham
London SW6 2DU
Registrars
Link Asset Services
The Registry
34 Beckenham Road
Beckenham
Kent BR3 4TU
Financial Public Relations
Teneo
5th Floor, 6 More London Place
London SE1 2DA
Registered Number
08232509
The Board of Directors
Neville Upton
(Chairman)
John Clarke
(Chief Executive Officer)
Jonathan Hall
(Chief Financial and Operations Officer)
Preeti Mardia
(Non-Executive Director)
Andy MacLeod
(Non-Executive Director)
Company Secretary
Jonathan Hall
Registered Office
35 New Bridge Street
London EC4V 6BW
Nominated Adviser
and Broker
Canaccord Genuity Limited
88 Wood Street
London, EC2V 7QR
Independent Auditors
Rees Pollock
Chartered Accountants
35 New Bridge Street
London EC4V 6BW
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GFINITY plc | Annual Report & Financial Statements 2020 STRATEGIC REPORT
Period Highlights
“A year of transition, with a new
management team and a clear
targeted operational focus”
Higher
margin
revenue
streams
Financial highlights
■ Focus on higher value and higher margin revenue streams,
driving 167% improvement in gross profit to £2.8m
(2019: £1.0m) despite a reduction in revenue to £4.5m
(2019: £7.9m)
■ 36% reduction in adjusted operating loss to £5.5m
(2019: £8.6m). (Excluding restructuring costs, the adjusted
operating loss reduced by 40% to £5.2m)
■ Operating cost base reduced by 50% due to major
restructuring of business in March 2020
■ Adjusted administrative expenses of £8.3m (2019: 9.6m),
down 13% year on year. (Excluding restructuring costs,
adjusted administrative expenses down 17%)
■ Cash and cash equivalents at year end of £1.6m (2019:
£0.6m), plus £2.0m of unexercised warrants. Following
the significant cost reduction announced in March 2020,
this leaves the business well capitalised to deliver against
the market opportunities in the growing esports sector
Business Highlights
■ Strategic review completed in March to sharpen
operational focus and define clear plan for growth and
monetisation
■ Significant growth and expansion of newly launched
digital media group, Gfinity Digital Media - expected to
generate revenue of over £2m in financial year 2021
■ Focus on establishing partnerships to leverage expertise
and deliver innovative new ideas that capture the
imagination of gamers around the world
–
–
–
Five-year agreement with Abu Dhabi Motorsport
Management (ADMM) to deliver the Global Racing
Series (GRS)
Partnered with BT Sport to deliver a series of celebrity-
led gaming entertainment shows
Partnered with Viacom CBS to deliver Street Fighter
experiential event at Vidcon London 2020
■ Selected by world’s biggest brands to provide esports
solutions, part of its commitment to building communities
for others
– Multi-year agreement with Formula 1 for F1 Esports
Series. Production of “Making an esports champion”
and delivery of F1 Esports Virtual Grand Prix
–
Selected to partner with Amazon to design, develop
and deliver The Twitch Prime Crown Cup
£2.8m
Gross Profit
50%
reduction in
operating cost
base
36%
reduction
in adjusted
operating loss
Business
well
capitalised
– Expanded relationship with Premier League to deliver
ePL, ePL USA and ePL Invitational Tournament
■ Additional appointments by NBA, HP Omen esports and
Willow TV
■ Gfinity Esports Platform (GEP) developed to include four
tech IP owned products; Competition, Game Control,
Community and Virtual Production
Post-Period Highlights
■ Gfinity Plus launched for the Company’s online community,
providing incentives, discounts and chat functionality
■ Season 4 of F1 Esports Series to be delivered virtually by
Gfinity utilising proprietary virtual production service
■ First product of Global Racing Series, the V10 R-League,
goes live with commercial distribution rights signed with
BT Sport, STARZPLAY Arabia and ESPN
■ Appointed by Cadbury to deliver a new gaming
tournament in the UK
1
Adjusted Operating Loss is the operating loss before depreciation of property, plant and equipment, amortization and the share-based payment charge. For consistency with prior years, the figure does
include depreciation charged on right of use assets that were recognised as operating leases in the year ended 30 June 2019.
2
Adjusted Administrative Expense is administrative expenses, adjusted for the same items as in the Adjusted Operating Loss.
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GFINITY plc | Annual Report & Financial Statements 2020 STRATEGIC REPORT
Gfinity At A Glance
About Gfinity
Gfinity (AIM: GFIN) is a world leading esports business. Created
by gamers for the world’s 2.7 billion gamers, Gfinity has a unique
understanding of this fast-growing global community. It uses
this expertise both to provide advisory services and to design,
develop and deliver unparalleled experiences and winning
strategies for game publishers, sports rights holders, commercial
partners and media companies.
Gfinity connects its partners with the esports community in
authentic and innovative ways. This consists of on and off-
line competitions and industry leading content production.
Relationships include EA SPORTS, Activision Blizzard, F1 Esports
Series and the Forza Racing Championship.
Gfinity connects directly with tens of millions of gamers each
month through its digital media group, Gfinity Digital Media.
Gfinity Digital Media includes websites such as: Gfinityesports,
RealSport101 and StealthOptional and their respective social
channels.
All Gfinity services are underpinned by the Company’s proprietary
technology platform delivering a level playing field for all
competitors and supporting scalable multi-format leagues, ladders
and knockout competitions.
Growth of esports
KEY DEVELOPMENTS IN SECTOR
INVESTMENT SUMMARY
■ A market leader in large and fast-growing sector
■ Business model evolved to reflect rapidly developing and
COVID-19 impacted market
■ Clear plan for growth and monestisation - owned; co-owned;
and fee plus
■ Sharpened strategic focus in 3 areas where we have traction
and competitive advantage, each with strong revenue levers:
1. Gfinity Digital Media Group
2. Partnerships
3. Building communities for others utilising owned Tech IP
■ Underpinned by continued focus on consumer insights
Young consumers have said no to passive entertainment, traditional television. And a big yes to interactive entertainment,
which is gaming. Gaming is now fully mainstream and it is massive.
2.7bn
Global gamers
$159bn
Global gaming
market
9.3%
YoY growth
518m
Global esports
audience
$1.3bn
Global esports
market
22%
YoY growth
■ Gaming activity significantly increased during lockdown period
■ Move away from major in person events to online activity and virtually produced content
■ Entering into peak period for gaming related spend with new console launches and related release of new titles
■ Significant growth in traffic to gamer centric/hobbyist websites
Source: Newzoo, 2020
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GFINITY plc | Annual Report & Financial Statements 2020 DIGITAL MEDIA GROUP (OWN)
PARTNERSHIPS (CO-OWN)
BUILD COMMUNITIES FOR OTHERS
(SERVICE/ LICENSE BASED)
■ Wholly owned, gamer centric
websites
■
12 million users 641% growth in
12 months
■ Optimised for ad serving. Q3/
Q4 2020 - bumper period for the
industry due to launch of new
games consoles
■
■
Ideas that capture the
imagination
Partners that value and benefit
from our expertise
– Creative; production; game
operations; community
building; commercial
■
True partnership - shared
investment, paid for services,
shared risk, shared commercials
DEVELOP
■ Continue to grow existing sites
■ Abu Dhabi Motorsport
■
Innovate - 3 new language sites
added
■ New gamer hobby sites
■ New advertising and video
services delivery partners
DELIVERY
Management - 5 year partnership
■ Global Racing Series - First
product, V10 R-League
■ New innovative formats,
designed for broadcast
■
Top racing teams; global
distribution; commercial
partnerships
■ Commercially viable programmes
for publishers, sport rights
holders, brands and media
organisations
■ Utilise company owned tech IP
■ Design esports programmes and
competitions
–
–
virtual and on-line
reason to care content
■ Community building - written and
video content
■
■
Formula 1 Esports - multi-year
agreement
ePremier league - on-line and
offline events
■
BT Sport - world class production
■ Activision Blizzard - UK’s only Call
of Duty World League events
■
Tech IP - Tournament platform;
Race Control; forums and chat
■ CPM - programmatic static and
video ads
■ CPA - affiliate sales; e-commerce
■
Brand partnerships - site
takeovers
■
■
Fee for services
Shared commercial rights, 50-50
■ Content rights; sponsorship;
advertising; Ancillary revenues
(in-game purchases)
■
■
■
Service fee
License fee
Limited commercial rights -
sponsorship commission
MONESTISATION
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GFINITY plc | Annual Report & Financial Statements 2020 STRATEGIC REPORT
Chairman’s Report
Neville Upton
Chairman
28 October 2020
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“Gfinity is at the heart of the esports
and competitive gaming ecosystem
and, as one of the first movers
in the esports world is trusted by
gamers and brands alike to design
and deliver compelling content and
gameplay across all levels”
I have great pleasure in presenting our
annual accounts for the financial
year-ended 30 June 2020. This year has
been one of transition for Gfinity and
we come to the end of our financial
year well positioned for future growth,
with a sharpened strategic focus, a new
management team and a sound financial
footing.
More broadly, the year has been shaped
by the COVID-19 pandemic which has
impacted the lives of everyone around the
world. I would like to take the opportunity
to thank our colleagues for their continued
hard work and dedication during these
challenging times.
The Market
The Board of Gfinity remains highly
confident in the prospects and position
of the Company, especially as market
dynamics are rapidly, and permanently,
changing in favour of the Group’s offering.
As gaming has become more mainstream,
Gfinity has increasingly noticed a number
of trends: global publishers at all levels are
seeking to expand the life time value of
their audiences; brands are looking for new
and innovative ways to expand into the
gaming and esports space; sports rights
holders are increasingly looking to connect
with the younger and typically hard to
reach gaming audiences, and; broadcasters
are in growing need of new competitive
gaming entertainment content.
The unprecedented changes caused by
the COVID-19 pandemic have acted as a
catalyst towards the continued growth and
popularity of video games, esports and
competitive gaming. Around the world,
there are currently 2.7 billion gamers
and close to 1 billion fans of esports and
competitive gaming. These gamers are
playing and consuming content at a level
that surpasses anything seen before in
traditional sport. Today, gaming is an
integral part of the way young people live
their lives. Digitisation has changed the
way they socialise, engage and spend their
entertainment time. Gfinity is at the heart
of the esports and competitive gaming
ecosystem and, as one of the first movers
in the esports world, is trusted by gamers
and brands alike to design and deliver
compelling content and gameplay across
all levels.
Restructuring
In March we announced a change in
management team and appointed John
Clarke as CEO. John has led a review
of the business which has resulted in
the cost base being halved and a new
sharpened strategic operational focus in
three areas where we have competitive
strength and momentum. These are
products and services that we own (Gfinity
Digital Media), co-own (partnerships) and
building communities for others. We
have seen positive traction in each of our
three strategic areas and now have a clear
pathway to profitability.
GFINITY plc | Annual Report & Financial Statements 2020 We are also very proud to work with many
prestigious partners and clients. I would
like to take this opportunity to thank them
all for their trust in us and their continuing
support.
In closing, while the macro-economic
outlook remains uncertain Gfinity is
operating in a growth industry segment.
The leadership team is focused on
execution and has added new revenue
levers and is now well positioned.
“Today, gaming is an integral
part of the way young
people live their lives”
COVID-19
The COVID-19 pandemic has seen the
cancellation of most fan-attended events.
While this initially meant that a number
of our client events at the Gfinity Arena
were postponed, we saw a significant
increase in demand for virtual broadcasts
from our partners and clients as they
recognised how crucial esports and
digital engagement with fans is to their
future. The changes brought about by
the pandemic have been a wake-up call.
We believe that there will continue to be
significant demand for Gfinity’s experience
and capability in creating unique solutions
for its partners and customers, enabling
brands to build databases of fans and grow
their relationships both through content
and game-play.
People
We have always prided ourselves on the
dedication, can-do spirit and innovative
thinking of our people. This has been
evident throughout the year but in
particular these qualities have shone
through since lockdown where they have
delivered some of the most innovative
and highly-praised esports programmes.
They have also worked hard to deliver new
solutions and develop technical IP that will
continue to give us a competitive edge in
the years to come, whilst also building one
of the fastest growing gamer communities
on the planet.
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GFINITY plc | Annual Report & Financial Statements 2020 STRATEGIC REPORT
Chief Executive Officer’s Report
“Gfinity operates in one of the most
exciting and fast-growing industry
sectors in the world”
Gfinity operates in one of the most
exciting and fast-growing industry sectors
in the world. The digitalisation mega
trend means that gaming continues to
grow in importance to young people,
with interactive entertainment at the
core of how they live their lives. This is
where esports and competitive gaming
entertainment sits and where Gfinity
operates.
I assumed the role as CEO earlier this year.
Since then, the team has been focused on
writing the next chapter of Gfinity’s story
with an emphasis on innovation, driving
financial growth and bringing the business
into profitability. We announced a review
of our business positioning in March and
based on this implemented a significant
cost reduction programme, the adoption
of a flexible variable cost operating model
and a sharpened operational focus on
areas of existing success and competitive
strength. In addition, we took the decision
to exit certain areas that had a negative
impact on cash and declining opportunities
that were not in line with our strategic
plan. We took our plan to the market and
through an oversubscribed placement
raised £2.25 million in April.
This year the world has been shaken by
the COVID-19 pandemic. With people
spending more time at home, we are
seeing an increase in engagement with
esports and competitive gaming. In the
absence of live sport, broadcasters are
turning to gaming to fill the programming
void and we are seeing both young and
old using gaming to connect with friends
and make new friends as social interactions
are restricted. Big consumer brands that
want to connect with Gen Z consumers are
also seeing the value and significant reach
of gaming. Gfinity remains well positioned
in the gaming ecosystem to provide
unique solutions for game publishers,
sports rights holders, brands and media
organisations around the world.
Sharpened operational focus
The business is now built around three
strategic pillars and is based on products
and services that we own; co own; and
deliver for others, with each pillar providing
multiple revenue streams.
1. What we own; Gfinity Digital Media
group (GDM)
In the past twelve months, Gfinity has
grown its publishing platform from two
English language websites with roughly
1 million monthly users, to three English
language websites; www.gfinityesports.
com; www.realsport101.com; and
www.stealthoptional.com with www.
realsport101.com available in Spanish,
Portuguese and Arabic. These sites
generated more than 12 million users in
June, with their respective social channels
generating over 40 million impressions.
GDM is wholly owned by Gfinity plc, with
three direct revenue streams: website
takeovers and programmatic advertising;
ecommerce; and content creation and
community build products for partners. Up
to June 30 2020 GDM generated revenues
close to £400,000. We expect revenues
John Clarke
Chief Executive Officer
28 October 2020
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GFINITY plc | Annual Report & Financial Statements 2020 from the group to exceed £2m in FY21.
The success of GDM is based on a dynamic
team and strong partnerships with industry
leading ad delivery, sales and video service
companies including Venatus Media and
Connatix. We have also launched Gfinity
Plus, a reward-based product alongside
a new e-commerce platform that helps
to drive increased engagement across
the sites. Overall, the future for GDM is
positive as we continue to grow organically,
identify acquisition opportunities and strike
new partnership deals.
2. What we co-own; Partnerships
More businesses are being drawn to
esports and gaming and are looking to
work with companies like Gfinity to help
them navigate the sector. Our partners
benefit from our expertise in gaming from
operations to production and we work
together to create ideas that capture the
imagination of young gamers. In these
partnerships, we share the investment and
risk, are paid for our services and share in
the commercial upside.
This partnership model is the basis of
the five-year agreement we entered into
with Abu Dhabi Motorsport Management
(ADMM) in May. Together we have built
the Global Racing Series and launched
the first product, the V10 R-League which
is available through linear and digital
channels around the world.
3. Building communities for others;
tech IP and world class production
Using company owned tech IP, we design,
develop and deliver commercially viable
programmes for games publishers,
sports rights holders, brands and media
organisations. We are a market leader
at creating virtual competitive gaming
entertainment programmes. We have
worked with some of the world’s leading
brands and in May, signed a multi-year
agreement with Formula 1 to deliver the
F1 Esports Series, a client we have worked
with since the start of the programme in
2017. In addition, our relationship with the
Premier League continues to expand and
we have been appointed by new partners
such as NBA and Willow TV to deliver “The
eCricket Challenge”.
A leadership position in virtual
motorsport
Throughout the year, Gfinity has continued
to strengthen its leadership position in
virtual motorsports. In addition to signing
the multiyear agreement to deliver the F1
Esports Series, Gfinity also designed and
delivered the Virtual Grand Prix series,
at the height of the pandemic, that was
watched by over 31 million fans. The
Gfinity Arena was kept open, technical
solutions were found to connect F1 drivers,
sports and media stars and YouTube
influencers from around the globe, with
nine live shows broadcast to over
100 countries.
In May, we announced the Global
Racing Series and the first product, the
V10 R-League, was broadcast on BT
Sport, ESPN and STARZ ARABIA Play in
September. It was an amazing team effort
to create the product, sign up teams, build
a virtual car, deliver commercial broadcast
deals and record the shows in under four
months.
In addition, the GDM group announced
the creation of a new virtual racing website,
www.racinggames.gg which will go live
in November. This reflects the growing
interest and commercial opportunities in
the space.
Gfinity’s owned tech IP
The team at Gfinity have also developed
tech IP that is wholly owned. The tech
IP is used for our own activities and is
monetised through services we deliver for
our clients, with the potential to become
an additional license-based revenue stream
in the years to come.
During the year the Premier League
utilised our new Competition Platform
whilst Formula 1 continues to benefit from
our Race Control software, which enables
in race adjudication and provides the
teams with real-time car performance data.
We also launched Gfinity Plus, a rewards-
based product designed to increase
engagement on our websites, which
uses forum and chat functionality that we
own. The team has also created virtual
production software that is already being
used for our client work and will soon be
available to a larger number of companies
under license.
Understanding the gamer
We have continued to deepen our
understanding of the needs and
behaviours of gamers. Now that we are
connecting with tens of millions of gamers
each month, we are able to take real time
behavioural data and implement test and
learn projects to identify the best content
to serve, at what times, with what games
and through what channels. This data is
being built into the programmes that are
developed for our key clients and we use
the insights to drive innovation in this area
of our business.
Our people
At the heart of any successful company
is its people and we are no exception.
Our team are passionate about gaming,
innovative and in these challenging
times have stood up to be counted.
During lockdown they kept the Gfinity
Arena open and produced world class
broadcast products that kept the world
entertained. They continue to be creative,
entrepreneurial and resourceful.
At the same time, we know that we can
do more to support young people from
a variety of different backgrounds find
ways to enter the esports and competitive
gaming sector. This is a priority and will
stay that way in the months and
years ahead.
Outlook
The sharpened operational focus,
combined with the significant reduction
in our cost base, has given Gfinity the
opportunity to win and deliver on the
major opportunity we see ahead of us. We
are successfully building the momentum
that will enable us to grow. To accelerate
our growth trajectory we need to engage
in even more partnerships. It is also clear
that Gfinity would benefit from the market
and brand support of having a strong
strategic partner to take us to our next
stage of growth. That is why we have
announced a ‘formal sales process’ and I
am excited to see what this delivers.
Gfinity is dependent upon a complex
and extensive ecosystem, with the timing
of new programmes reliant upon our
customers and partners providing their
value added services. There are risks
associated with the timing of the overall
programme execution and therefore it is
important that we remain agile, flexible
and entrepreneurial, to continue to add to
an already strong pipeline of opportunities.
In closing
The strategic focus on what we own,
what we co own and what we can build
for others provides a clear roadmap to
profitable growth. Whilst we are still
dealing with the implications of COVID-19
and the uncertainty surrounding a no-
deal Brexit, we are staying focused on
what we can control, building our own
community of gamers at pace, partnering
with organisations that have a shared need
and working with great brands that value
our expertise. This is an exciting chapter
for the Company, and I would like to thank
the Gfinity team, our business partners and
our clients for their continued hard work
and support.
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GFINITY plc | Annual Report & Financial Statements 2020 STRATEGIC REPORT
Chief Financial and Operating Officer’s Report
“The year to 30 June 2020 was
one of transition for Gfinity, during
which we took a number of key
decisions and actions to position
the business for success as we
move into 2021 and beyond”
Summary
The year to 30 June 2020 was one of
transition for Gfinity, during which we took
a number of the key decisions and actions
to position the business for success as we
move into 2021 and beyond.
In March 2020, we announced a review
of our business positioning, sharpening
its strategic focus and focusing on areas
in which we are already demonstrating a
competitive advantage and in which we
believe we can win profitably in the future.
Aligned to this, we also announced
a significant step change in the fixed
cost base of the business; retaining
key expertise, but reducing the size of
the permanent teams and supporting
infrastructure, with additional resource to
be brought in as required for programme
delivery. This move will enable us to
reduce the operating cost base of the
business by more than 50% over a
12-month period. The majority of this
reduction has already been achieved,
with further small amounts to be realised
through FY21.
The impact of these changes can already
be seen in the FY20 results. The adjusted
operating loss3 reduced by 36% to £5.5m.
Excluding restructuring related costs of
£0.3m, the operating loss would have
reduced to £5.2m, a year on year reduction
of 40%.
We expect to see a further reduction in
operating loss in FY21, as Gfinity’s owned
revenue streams continue to grow, the full
year impact of cost reductions delivered in
FY20 are reflected and further reductions
in the cost base are made as existing lease
commitments come to an end.
During the year commercial capability on
a contract basis was added to the team.
This has led to commercial agreements
with leading global broadcasters for the
V10 R-League, which is part of the multi-
year relationship signed with Abu Dhabi
Motorsport Management in May and new
opportunities in the MENA region.
The internal technology team has worked
hard to build the infrastructure on which
Gfinity Digital Media is built. Not only has
the team built new sites, it has optimised
all the sites for serving programmatic
ads, rich media site takeovers and
e-commerce. During the year the Gfinity
Esports Platform (GEP) has been expanded
to include four owned IP products, all
of which are licensable: Competition;
Game Control; Community; and Virtual
Production.
Revenue and cost of sales
Revenue of £4.5m reflected a reduction of
43% year on year as we moved towards
higher value revenue streams. Despite this
reduction, however, gross profit rose 167%
year on year to £2.8m. This improvement
was driven by a move away from lower
margin activities, towards higher value
activities, including:
■ Advertising and branded content
revenues driven through Gfinity’s own
Digital Media Group
Jonathan Hall
Chief Financial and Operations Officer
28 October 2020
14
GFINITY plc | Annual Report & Financial Statements 2020 Based on the restructured cost base, this
cash balance together with the further
warrant exercise leave the business
sufficiently capitalised to deliver against
the growing market opportunity within
esports.
Outlook
As a result of the actions taken in the year,
Gfinity is well positioned to take advantage
of the leading position it has created
within the esports sector. Its sharpened
operational focus on areas where the
company already enjoys a competitive
advantage will ensure the business grows
in a financially viable way, despite the
economic environment which remains
heavily affected by COVID-19.
After much reflection on how to best
exploit the explosive growth in our market
for our shareholders, on 9 October 2020,
we announced the appointment of finnCap
to conduct a formal review of the various
strategic growth options available to the
Company. This could include options for
making acquisitions, forming partnerships,
separating activities of the Group or the
potential sale of the Company. There is
no certainty that any offer will be made, or
transaction concluded and we will make a
further announcement in due course.
Overall, following a year of transition, we
believe we are well positioned for success
as we move into 2021 and beyond.
■ Content creation activities for clients
■ Depreciation of owned assets of £0.4m
including Amazon, BT Sport, Formula 1
and HP Omen
(2019: £0.4m)
■ Design, development and delivery
of major esports programmes for
major gaming and traditional sporting
organisations including Formula 1,
Premier League and a number of
leading football clubs
■ Strategic consultancy for clients
including Truxtun Capital
■ Deployment of Gfinity’s esports
technology services, which
underpinned a number of the above
programmes along with ongoing work
for clients including Nvidia
While the emergence of COVID-19 in the
second half of the financial year impacted
the business, the re-focus on our own
communities, studio produced content and
deployment of our technology, as opposed
to live in-person events, significantly
mitigated this impact.
Administrative Expenses
As a Board, we monitor ourselves against
adjusted operating expenditure4, as the
measure which most closely reflects the
cash costs to the business.
Adjusted operating expenditure for the
year totalled £8.3m, which represented a
reduction of 13% year on year. This figure
included restructuring related costs of
£0.3m, without which underlying operating
expenditure would have been £8.0m, a
reduction of 17%.
This reduction principally reflected the
impact over the final months of the year
of the restructuring announced in March
2020. Over a 12-month period, this
restructuring will reduce the underlying
operating expenditure of the business by
more than 50% from the previous run rate.
The majority of this reduction has already
been delivered, with further savings to
follow through FY21.
Unadjusted administrative expenses
include:
■ Share option charge of £1.5m, which
represents an increase of £0.5m on
the prior year, principally relating to an
acceleration of the charge in respect of
former board members
■ Amortisation of intangibles of £0.5m
(2019: £1.0m)
Operating loss
As a result of the improvement in gross
profit, coupled with the reduction in
administrative expenses, the adjusted
operating loss for the year reduced to
£5.5m, a reduction of 36% year on year
(2019: £8.6m). Excluding the impact of
£0.3m of restructuring related expenditure,
this figure would have been £5.2m, a
reduction of 40%.
Share of loss in associates
Esports Awards Ltd, in which Gfinity
holds a 33% investment, continues to
make strong progress as it builds an
industry leading awards event for the
esports sector. The November 2019 event
attracted a global audience of over seven
million viewers, up from five million in the
prior year, with more than 3.75 million
votes cast across the respective award
categories (prior year 3.3 million votes).
This provides a strong base from which to
drive content and sponsorship revenues
in the medium-term, which we believe will
create an investment property of real value
for the group. Gfinity’s share of loss in
Esports Awards Ltd in the year was £0.0m
(2019: £0.0m).
In August 2019 we announced that Gfinity
Esports Australia would cease trading by
the end of the 2019 calendar year. This
has happened and the venture is in the
process of being formally wound down.
Gfinity’s share of loss from this venture in
the year was £0.3m (2019: £0.9m). No
further losses are expected, with the entity
having sufficient reserves to meet all
liabilities on closure, other than those to
the shareholders, which are already fully
provided against.
Cash and cash equivalents
Year-end cash of £1.6m (2019: £0.6m)
was in line with expectations following
completion of an over-subscribed fundraise
in April 2020 to raise £2.25m gross (£2.1m
net) and the exercise of a further £0.2m of
warrants prior to the year end. At 30 June
2020, there remained £2.0m of warrants
still to be exercised, £0.4m of which had
been exercised prior to this signing of the
accounts.
3
4
Adjusted operating profit/ (loss) is operating profit/ (loss), prior to share option charge, amortization and impairment of intangible asset and depreciation of fixed assets. For consistency with prior
years and to best represent the measure of profitability that matches to cash flow, this figure does not adjust for operating leases capitalized in accordance with IFRS 16.
Adjusted operating expenditure is administrative expenditure, prior to the inclusion of share option charge, amortization of intangible assets and depreciation of owned fixed assets.
15
GFINITY plc | Annual Report & Financial Statements 2020 STRATEGIC REPORT
Principal Risks and Uncertainties
Introduction
Gfinity’s long-term success will depend
in large part on its ability to manage the
key risks affecting the Company. Gfinity
is an innovative business in a rapidly
developing sector. In that context, the
risks facing Gfinity can change quickly and
the board recognises the importance of
identifying key risks and ensuring that the
right mitigation strategies are in place for
managing them.
“Gfinity is an
innovative business
in a rapidly
developing sector”
Ultimate responsibility for managing risk
lies with the board. Executive responsibility
for retaining the register of risks and
reporting on these to the board lies with
the Chief Financial and Operations Officer.
Responsibility for the management of
risks lies with different members of the
Executive leadership team depending on
the nature of the risk.
Gfinity distinguishes between strategic
risks and operating risks. Strategic risks
represent macro level matters, which may
impact on the strategy of the Company.
Operating risks reflect the ongoing
challenges that the business may face in
delivering on that strategy.
On a day to day basis, responsibility for
managing strategic risks lies with the
Chief Executive. Mitigation strategies and
the emergence of new strategic risks are
considered through the weekly senior
leadership team meetings, which he chairs.
Operational risks are the responsibility
of the Chief Financial and Operations
Officer and are considered both at the
senior leadership team meetings and
through weekly one to one meetings with
the heads of respective operational and
commercial departments.
In assessing its attitude to risk, directors
aim to strike a balance between ensuring
comprehensive processes and monitoring
frameworks are in place, as would be
expected of a publicly listed Company,
while retaining the dynamism and
innovation required to grow quickly within
a rapidly developing and changing sector.
The directors believe the principal risks
currently affecting the business are as
outlined below:
16
GFINITY plc | Annual Report & Financial Statements 2020 STRATEGIC RISKS
Risk
COVID-19 risk
Economic and political uncertainty
Intellectual property risk
Description
Mitigating Actions
The COVID-19 pandemic has driven an
unparalleled level of economic uncertainty
within the global economy.
This has resulted in many organisations
holding back from making long term
spending commitments.
It has also seen a movement away from
spend on live, in-person events.
The financial markets have also been heavily
impacted and there remains a risk of a
further downturn to the financial markets as
the impact of COVID-19 becomes more long
lasting than many had originally anticipated
and government sponsored programmes to
sustain employment during the initial period
come to an end.
Gfinity acted quickly in the spring of 2020
to reduce the cost base of the business and
focus activities on areas where directors
believe they can both be successful in
the long term, but also in which they can
continue to win in the short term.
This was reflected in the speed with which
esports programmes for clients including
Formula 1 and Premier League, with
participants competing remotely were
brought to market following the initial
outbreak of the disease.
Keeping the Gfinity Arena open for business
by implementing social distancing measures
is key to driving additional business and
gives us a competitive advantage.
The growth of Gfinity’s own digital media
group, also provides a strong, recurring
owned revenue stream that is not subject to
live events.
Furthermore, as part of the oversubscribed
fundraise process completed in April 2020,
directors opted to take more money than
originally targeted during the initial raise,
coupled with further cash inflows that
resulted from subsequent warrant exercises,
meaning the business is well capitalised
to ride out the economic uncertainty as it
moves into FY21.
Uncertainty over the United Kingdom’s
future trading relationship with European
Union, and other key trading partners
creates a level of economic and political
uncertainty, which provides risks at both a
strategic and operational level for Gfinity. At
a strategic level, the uncertainty could create
challenges with regards to capital availability
and the desire of global publishers, rights
holders and brands to deliver programmes
in the UK.
The structural changes to the cost base of
the company and the additional security
over funding, resulting from the fundraise
undertaken in April 2020, ensures that the
company will have the resources to ride out
any short term economic uncertainty.
The move towards an increased level of
digital engagement, with participants
competing remotely also decreases Gfinity’s
dependence on live events and cross border
travel.
Esports involves the use of intellectual
property, typically owned by the publishers
of the respective game titles.
Gfinity must consider the risk of changes
in strategy of the intellectual property
owners, resulting in certain games not being
available for use by Gfinity in its esports
properties, or fees being required for the
use of intellectual property, which may
present a challenge to Gfinity’s business
model.
Gfinity’s brand and technology platform,
together with the audience consuming
Gfinity content, has been developed
across multiple titles, ensuring there is no
dependence on any single title.
Gfinity maintains strong relationships
with multiple game publishers and has
demonstrated the value it can bring to
them in building communities and driving
engagement around their games, which
in turn drives revenues for the publishers
through sales of the games themselves and
in-game content. As a result, a number of
the major game publishers have become key
clients of Gfinity.
17
GFINITY plc | Annual Report & Financial Statements 2020 STRATEGIC RISKS Continued...
Risk
Description
Mitigating Actions
Perception of video gaming
Competition risk
Some people view video gaming negatively,
as something that promotes an unhealthy
lifestyle and lack of social interaction. There
is a risk that this perception will provide a
barrier to entry to commercial partners and
broadcasters, presenting a risk to Gfinity’s
business model.
There are currently very few companies
globally that can deliver full end to end
esports solutions and Gfinity has established
a first mover advantage. As the market
develops, however, there is a risk of new
entrants coming into the market, or game
publishers looking to bring the capability in
house.
Speed of revenue growth
Gfinity operates in a pioneering sector.
Directors believe, supported by market
research, that the value of that sector is
significantly below the level it should reach,
given the size and level of engagement
of the audience and the attractiveness of
that demographic to broadcasters and
commercial partners. Nonetheless, that
growth may not be linear and that may
present a risk to the speed of revenue
growth.
Gfinity seeks to educate partners and the
wider industry on the positive impact of
gaming. Esports provides a social platform
for people to play and interact, in a highly
accessible way. Even at the top level,
where teams and players are practicing
for many hours per day, this will frequently
be supplemented by fitness and nutrition
programmes to keep players healthy.
Gfinity’s unique capability comes from a
combination of its proprietary platform,
the cumulative knowledge and breadth
of relationships of its experienced team,
its deep understanding of the esports
community, and the investment in its esports
studio.
Gfinity continues to invest in these
capabilities to retain a lead in the
marketplace and to position itself such
that any major new entrant to the esports
market, or any major publisher looking to
expand their esports offering, would be able
to move more quickly by acquiring Gfinity
than by trying to replicate these capabilities
in house.
The directors of Gfinity firmly believe that
establishing a market leading position in the
fast-growing esports sector is the best route
to delivering significant long-term value to
shareholders.
Nonetheless, in view of the fact that revenue
progression may be non-linear, as noted
in the current year results, the board has
adopted a strategy of sharpening the
focus of the business onto areas in which
the company enjoys a distinct competitive
advantage and can grow profitably. The
reduction of the cost base associated with
this sharpening of the focus, is also expected
to allow the company to move into a cash
flow positive position on a month on month
basis in a shorter term time horizon. This
will help the company more successfully
negotiate the short term impact of any short
term revenue reduction.
18
GFINITY plc | Annual Report & Financial Statements 2020 OPERATIONAL RISKS
Risk
COVID-19 risk
Description
Mitigating Actions
Alongside the strategic risks, the COVID-19
outbreak has presented multiple operational
risks to the business, including:
■ Key staff availability; in the event that
multiple people needed to be absent at
a single point in time
Department leaders have been targeted
with ensuring that there is appropriate
knowledge sharing within the teams and
in building a broader network of people
who understand our processes and ways of
working, who can come in at short notice to
support our activities.
■ Facility availability; ensuring we remain
able to generate competitive gaming
content for our own programmes and for
clients without breaching government
regulations
■ Maintaining efficient and effective ways
of working, including ensuring that staff
are able to do their jobs even if they
can’t come to the office
■ Maintaining appropriate communication,
so the company’s activities remain
focused and aligned.
Economic and political uncertainty
Alongside the strategic risks that this
uncertainty creates, it also presents a
number of risks at an operational level,
including access to equipment, attendance
of players and talent at Gfinity events and
matters of cross border billing and taxation.
Liquidity risk
Gfinity is currently a loss-making company
and as such, must ensure that it has sufficient
capital available to deliver on its strategy.
Staff have not been required to come into
the office since the outbreak first emerged
and have worked effectively from home
during this period.
Staff have only come into the Arena as
required to deliver specific programmes.
The company engaged a team of specialist
consultants to reconfigure the Arena and
develop new ways of working that, as far
as possible adhered to social distancing
guidelines.
The company’s investment in technology
has also allowed it to continue delivering
high quality content, without the need for
participants to travel into the Arena.
Bi-weekly all staff meeting, supplemented by
a range of group and one to one meetings,
ensure that communication remains strong,
despite these new ways of working.
While the future trading relationship
between the United Kingdom and
the European Union is undetermined,
each department has undertaken a risk
assessment, reviewing the potential impact
of a worst case scenario ‘no deal’ Brexit.
Should this event occur, the business will
therefore be in a position to continue
to deliver its services without a material
disruption to operations.
Gfinity maintains a strong core group of
investors but has also sought over recent
fundraises to broaden this shareholder base,
expanding its investment roadshows to new
geographies and investigating opportunities
with strategic investors, as well as financial
institutions and private individuals.
The granting of warrants in the most recent
fundraise provides a likely additional
injection of cash over the next 12 months,
although the timings of this cannot be
guaranteed.
As noted above, we have also undertaken
an exercise to significantly reduce the cost
base of the business, in the expectation of
bringing the business into profitability at an
adjusted operating profit level on a month
on month basis within the short term.
19
GFINITY plc | Annual Report & Financial Statements 2020 OPERATIONAL RISKS Continued...
Access to key skills
Data security risk
Esports is a new sector and as such, the
number of people with deep experience in
developing and delivering esports solutions
is limited. Without access to this expertise,
Gfinity would not be able to provide the
depth of solutions to its client base or build
its own Gfinity “tribe”.
Gfinity places a high importance on
succession planning within the business,
ensuring that skills are not vested in a
single individual. This is built through
development of existing staff, recruitment of
certain key personnel and where appropriate
through targeted acquisitions.
Senior individuals are also incentivised
through an employee option scheme,
driving loyalty to the business.
Gfinity has undertaken an in-depth review
of its data policies and procedures, in
conjunction with lawyers and data protection
experts in response to recent data
protection legislation.
All user data held is in a secure and
encrypted manner and is only used in
compliance with all relevant legislation.
Gfinity has built a large community
of esports fans playing, watching and
socialising through its own platform and
those of CEVO and RealSport.
Increasing levels of data protection
regulation, including GDPR legislation,
and ongoing cyber security risks, make it
imperative that any data gathered through
these platforms is collected, handled and
protected in accordance with all relevant
regulations. Any failure to do so would
significantly erode trust, both among
the esports community and prospective
commercial partners.
This report was approved by the board and signed on its behalf.
Neville Upton
Chairman
28 October 2020
20
GFINITY plc | Annual Report & Financial Statements 2020 GFINITY plc | Annual Report & Financial Statements 2020
2121
GFINITY plc | Annual Report & Financial Statements 2020 Annual Report & Financial Statements 2020
GOVERNANCE
GFINITY plc | Annual Report & Financial Statements 2020
GOVERNANCE
Corporate Governance Report
The board retains overall responsibility for
ensuring strong corporate governance and
is supported by the Audit, Nominations
and Remuneration Committees. This
section provides further detail on the
composition and conduct of business of
the board and its respective committees,
together with information on how they
discharge their responsibilities.
Board of directors:
The Gfinity plc board is responsible for:
■ Setting the strategy across all Gfinity
group companies;
■ Defining the business model and the
financial framework within which the
business must operate;
■ Setting and ensuring the
implementation of the culture, to
deliver success;
■ Designing and implementing controls
and the risk management framework;
■ Ensuring communication with
key stakeholders, including staff,
shareholders, suppliers and customers;
■ Appointing a senior Executive Team,
capable of delivering on the defined
strategy;
■ Monitoring performance against the
above areas and taking remedial
actions as appropriate;
■ Ensuring availability of capital to deliver
on the chosen strategy.
Chair’s statement
on corporate governance
“The Directors recognise the
fundamental importance of
good corporate governance
in providing an efficient,
effective and dynamic
management framework to
ensure that the Company is
managed in the right way for
the benefit of all shareholders
over the medium to long-term.
In view of this, the board
of Gfinity plc has chosen to
apply the QCA Corporate
Governance Code (the ‘QCA
Code’) published by Quoted
Companies Alliance. The
QCA Code is a pragmatic and
practical tool, which adopts a
principles-based approach to
corporate governance, which
the directors of Gfinity believe
is correct for Gfinity in its
current stage of growth.
This section of the report
provides further details on
how Gfinity complies with
these principles of good
corporate governance.
Further information can also
be found on our investor
website www.gfinityplc.com.”
Neville Upton
Chairman
24
GFINITY plc | Annual Report & Financial Statements 2020 GOVERNANCE
Board of Directors
NEVILLE UPTON, CHAIRMAN
Appointed: 15 January 2014
After graduating at the London school of Economics, Neville joined Coopers & Lybrand where he qualified as a Chartered Accountant.
Neville’s formative years were at Euromoney where he gained experience in Finance, M&A and various commercial projects. After a brief
spell at The Decisions Group as Finance and Operations Director, in 1998 he established a call centre business, The Listening Company, which
specialised in multichannel communication applications and high quality customer service solutions. The business was sold in 2011 to Serco
for a sum in excess of £60 million, at which time it had a turnover of £82 million and employed 4,000 people. Neville co-founded Gfinity
in 2012.
JOHN CLARKE, CHIEF EXECUTIVE OFFICER
Appointed: 18 September 2018
John Clarke was appointed CEO in March 2020. He is a business professional with more than 30 years of international experience gained
working in and with leading global companies. John has worked for HEINEKEN N.V. where he held the positions of Head of Global
Communications and Senior Commercial Director within Lagunitas Brewing Company, a 100% owned subsidiary of HEINEKEN N.V. Previously
he held senior leadership, corporate affairs and marketing positions within The American Express Company and Burson-Marsteller Public
Relations. John joined the board as a Non-Executive Director in September 2018 and was appointed Global Brand and Marcomms Officer in
May 2019.
JONATHAN HALL, CHIEF FINANCIAL AND OPERATIONS OFFICER
Appointed: 1 September 2014
Jon qualified as a Chartered Accountant with Arthur Andersen followed by a period of six years specialising in organisation and business
process design with PA Consulting, a leading London based management consultancy firm. He subsequently spent five years as a Finance
Director of Saracens Ltd and the wider Premier Team Holdings Group, before joining Gfinity in August 2014 where he led the process of the
Company’s admission to AIM. As Chief Financial and Operations Officer Jon has responsibility for all aspects of finance and accounting,
including financial planning, reporting and accessing capital to fund growth. He also retains responsibility for all company operations
including event delivery, technology, HR and legal matters.
PREETI MARDIA, INDEPENDENT NON-EXECUTIVE DIRECTOR
Appointed: 23 November 2017
Preeti Mardia has diverse end-to-end operational management and commercial expertise across Electronics, Telecoms, Banking and FMCG
sectors. Preeti is a Board Director with ThinFilm Electronics ASA, a global leader in printed electronics technology, and a Non-Executive
Director of Maistro plc until September 2019. Prior to the position of Senior Vice President Operations held at IDEX ASA, she was Vice
President Operations for Axxcss Wireless UK and Operations Director at Filtronic Plc. She also has FMCG experience in operations with
Cadbury Schweppes Plc. Preeti Mardia has a Master’s degree in Management from Ashridge. Preeti joined the Gfinity board in November
2017.
ANDY MACLEOD, INDEPENDENT NON-EXECUTIVE DIRECTOR
Appointed: 23 November 2017
Andy has extensive communications industry experience from a variety of senior roles with major carriers and technology vendors. Until
recently he spent eleven years at Vodafone Group, firstly as Group Chief Networks Officer responsible for the operation of Vodafone’s
telecoms networks world-wide, then as Chief Technology Officer for Verizon Wireless in the USA and finally as the Regional CTO for the
thirteen Vodafone Operating Companies outside Europe. He has recently retired from corporate life and has a portfolio of NED and
consulting roles. Andy has served on the boards of Verizon Wireless Inc, Vodafone Italy Spa and Indus Towers Ltd, as Deputy Chair of Idex
ASA and is currently a Non-Executive Director of IQGeo, an AIM listed geolocation software Company. He holds a degree in Materials
Science from Oxford University, an MBA from Warwick Business School and is a Fellow of the Royal Academy of Engineering. Andy joined the
Gfinity board in November 2017.
25
GFINITY plc | Annual Report & Financial Statements 2020 GOVERNANCE
Board Composition and Performance
The composition of the Gfinity board
is structured to contain the range of
skills and personal qualities required to
effectively discharge its duties. The board
recognises that as Gfinity develops, within
a rapidly growing sector the precise
composition required shall change from
time to time. Responsibility for reviewing
the composition of the board and making
recommendations for appointment
and removal of directors rests with the
Nominations Committee. Further details
of this are provided below. Any such
recommendations are subject to formal
approval of the full board.
The board recognises the importance
of diversity of skills and approach in
effectively conducting its duties, and
as such, has sought to appoint high
calibre individuals from a wide range of
backgrounds and sectors.
ATTENDANCE RECORD:
Role of Chair:
The primary responsibility of the Chair is to
lead the board effectively and to oversee
the adoption, delivery and communication
of the Company’s corporate governance
model. As Chairman, Neville Upton
also retains responsibility for oversight
of the development and delivery of the
Company’s strategy, supported by the
Executive Directors.
The Chair ensures that the board considers
the key issues affecting the Group, both
operationally and financially, and together
with the Company Secretary ensures the
correct information flows between the
board, its respective committees and
between the Independent Directors and
senior management.
Role of Company Secretary:
The Company Secretary acts as a trusted
adviser to the Chair and the board and
plays a vital role in relation to both legal
and regulatory compliance. The Company
Secretary supports the work of the
respective board committees and also acts
as a confidential sounding board to the
chairs of those committees.
Board Conduct of Business:
Full board meetings are held monthly,
other than in August and December,
meaning a minimum of ten meetings per
annum to conduct the regular business of
the board. Further full board meetings shall
be held as required to provide approval on
specific matters. This includes meetings to
approve the issue of further shares, both
as part of the core fundraise process and
also following warrant exercises. The issue
of warrants for the first time in April 2020
has increased the cadence of such one-off
meetings.
The quorum for a board meeting to be
considered valid is two.
Director
Neville Upton
John Clarke
Jonathan Hall
Preeti Mardia
Andy MacLeod
Garry Cook
Graham Wallace
Number of Meetings Attended
Total Meetings in Period in Office
15
15
15
15
15
7
7
15
15
15
15
15
7
7
Board Review and Performance
The board monitors its performance and composition on an
ongoing basis and recognises that as the Company grows in
a rapidly developing sector, the mix of skills required to best
discharge its duties may change from time to time. It was in that
context that, during the year, Neville Upton became Chairman
and the board appointed John Clarke to Chief Executive Officer.
Performance of the board is assessed on an annual basis. This
process is led by the Chair of the Nominations Committee,
supported by the Chief Financial and Operations Officer, and
assesses the board’s performance against its stated terms of
reference, both in terms of the process by which business is
conducted and the results achieved.
Audit Committee
The role of the Audit Committee is to provide confidence to
26
shareholders on the integrity of the financial results of the
Company, expressed in this annual report and accounts, and
other relevant public announcements made by the Company.
The Audit Committee also has a key role in the oversight of the
effectiveness of the risk management and internal control systems
of the Company, and to make recommendations to the board for
improvements in this regard.
The Audit Committee comprises:
■ Preeti Mardia (Chair)
■ Andy MacLeod
■ Jonathan Hall
Graham Wallace also formed part of the committee prior to his
resignation from the board.
GFINITY plc | Annual Report & Financial Statements 2020 ATTENDANCE RECORD:
Director
Preeti Mardia
Andy MacLeod
Jonathan Hall
Graham Wallace
Nominations Committee
The Nominations Committee ensures there
is a robust process for the appointment
of new board directors. The committee
works closely with the board and the Chair
to identify the skills, experience, personal
qualities and capabilities required for the
next stage in the Company’s development,
linking the Company’s strategy to
future changes on the board. Only the
Nominations Committee is able to formally
submit a recommendation to the board for
ATTENDANCE RECORD:
Director
Andy MacLeod
Preeti Mardia
Remuneration Committee
The Remuneration Committee is
responsible for outlining the principles of
remuneration strategy to be applied across
the Gfinity Group. It also directly approves
the remuneration of all directors, together
with the grant of any option over shares in
Gfinity plc.
Compensation is based on an expectation
that the director will spend a minimum of
30 days a year on work for the Company.
This will include attendance at a minimum
of six Board meetings per annum, each
general meeting, plus other activities as
agreed with the Executive team from time
to time, including membership of board
committees.
ATTENDANCE RECORD:
Director
Andy MacLeod
Preeti Mardia
Number of Meetings Attended
Total Meetings in Period in Office
3
3
1
2
3
3
1
2
the appointment of a new director. All such
recommendations are still subject to the
approval of the board.
The Nominations Committee comprises:
■ Andy MacLeod (Chair)
■ Preeti Mardia
Number of Meetings Attended
Total Meetings in Period in Office
1
1
1
1
Non-Executive Directors may support
additional projects over and above their
role as Non-Executive Directors and may
be remunerated at or below market rate for
those services. The extent of such services
must not, however, compromise their
status as Non-Executives, independent of
the Executive team.
The Remuneration Committee consists of
Andy MacLeod and Preeti Mardia.
Number of Meetings Attended
Total Meetings in Period in Office
4
4
4
4
Full disclosure of director remuneration is provided within the Directors Remuneration Report.
27
GFINITY plc | Annual Report & Financial Statements 2020 GOVERNANCE
Directors’ Remuneration Report
As the Company is AIM
listed, the directors are not
required, under Section
420(1) of the Companies Act
2006, to prepare a directors’
remuneration report for each
financial year of the Company
and so Gfinity plc makes
the following disclosures
voluntarily, which are not
intended to, and do not,
comply with the requirements
of the Companies Act 2006.
The Remuneration
Committee is responsible
for recommending the
remuneration and other
terms of employment for
the Executive Directors of
Gfinity plc. In determining
remuneration for the
year, the committee has
given consideration to the
requirements of the UK
Corporate Governance Code.
All directors hold either shares or share
options in the company. The board of
Gfinity believes offering Non-Executive
Directors shares in the Company at a price
and level that aligns them with the interests
of the wider shareholder base is in interests
of all shareholders. The Board also
believes it is an essential part of attracting
high calibre individuals to the Board.
Service contracts
All existing directors at the time of the
Company’s admission to AIM entered
into new service contracts on 16
December 2014, immediately prior to that
admission. All new directors since this
date have entered into comprehensive
director service contracts at the time, or
immediately in advance of commencing
their roles.
All Executive directors’ appointments are
subject to six months’ notice on either
side.
All directors are subject to pre and post
termination restrictive covenants with
the Company, including those relating to
non-competition and non-solicitation of
customers and staff.
No compensation is payable for loss
of office and all appointments may be
terminated immediately if, among other
things, a director is found to be in material
breach of the terms of the appointment.
Remuneration policy
The remuneration of Executive Directors
is determined by the committee and the
remuneration of Non-Executive Directors
is approved by the full board of directors.
The remuneration of the Chairman is
determined by the Independent Non-
Executive Directors, in conjunction with the
Chief Financial and Operations Officer.
The remuneration packages of Executive
Directors comprise the following elements:
Basic salary and benefits
Basic salaries for Executive Directors are
reviewed annually and take into account
individual performance, market practice
and the financial position of the Company.
In most cases salaries paid to Executive
Directors are currently towards the low
end of the market rate for their respective
roles and relative to the experience of the
individuals in question. Executive Directors
are eligible for pension contributions and
participation in the Company’s health
insurance and life assurance schemes.
Annual bonuses
Bonuses awarded to Executive Directors
are included in the Directors’ Emoluments
table on page 27. Bonuses form part of the
overall remuneration of Executive Directors
and are aligned to the achievement of
financial and strategic milestones which are
designed to promote long-term value for
all shareholders.
Share options
The Company believes that share
ownership by Executive Directors and
employees strengthens the link between
their personal interests and those of the
Company and the shareholders.
The Company has an executive share
option scheme, which is designed to
promote long-term improvement in the
performance of the Company, sustained
increase in shareholder value, and clear
linkage between executive reward and the
Company’s performance.
28
GFINITY plc | Annual Report & Financial Statements 2020 DIRECTORS’ INTERESTS IN SHARES
The interests of the Directors at 30 June 2020 in the shares of the Company were:
Number of Ordinary Shares
Percentage of issued share capital
14,877,245
722,222
722,222
111,112
78,704
16,511,505
2.05%
0.10%
0.10%
0.02%
0.01%
2.27%
Director
Neville Upton
John Clarke
Jonathan Hall
Preeti Mardia
Andrew MacLeod
SHARE OPTIONS
Directors’ interests in options over the ordinary shares in the company were as follows:
Director
As at 30 June 2019
Options Granted
Options Lapsed
As at 30 June 2020
Garry Cook*
Graham Wallace*
Neville Upton
John Clarke
Jonathan Hall
Andy MacLeod
Preeti Mardia
9,590,446
8,590,446
7,870,670
3,000,000
1,548,571
1,000,000
1,000,000
-
-
5,000,000
8,000,000
5,000,000
-
-
-
-
(7,870,670)
(3,000,000)
(1,548,571)
-
-
n/a
n/a
5,000,000
8,000,000
5,000,000
1,000,000
1,000,000
32,600,133
18,000,000
(12,419,241)
20,000,000
*Garry Cook and Graham Wallace resigned from the board on 16 March 2020.
29
GFINITY plc | Annual Report & Financial Statements 2020 GOVERNANCE
Audited Information – this section forms part of the
financial statements by cross-reference.
DIRECTORS’ EMOLUMENTS
Emoluments of the directors for the year ended 30 June 2020 are shown below.
Director
Salary & Fees
Bonus
Pension
Total
Remuneration
Total
Remuneration
Year ended 30 June 2020
Year ended 30 June 2019
Neville Upton
John Clarke
Jonathan Hall
Preeti Mardia
Andrew MacLeod
Garry Cook*
106,250
166,250
161,500
25,000
25,000
60,600
Graham Wallace*
256,683
801,283
-
-
-
-
-
-
-
0
*Garry Cook and Graham Wallace resigned from the board on 16 March 2020.
-
2,192
2,192
942
-
-
-
106,250
168,442
163,692
25,942
25,000
60,600
256,683
150,000
193,848
170,948
25,236
25,000
412,400
369,875
5,325
806,608
1,347,307
This report was approved by the board and signed on its behalf.
Neville Upton
Chairman
28 October 2020
30
GFINITY plc | Annual Report & Financial Statements 2020 GOVERNANCE
Directors’ Report
The directors present their
annual report on the affairs of
the Company, together with
the financial statements and
auditor’s report, for the year
ended 30 June 2020.
Principal activities
Capital structure
Gfinity is a world leading esports company.
As a trusted independent esports provider
it designs, develops and delivers esports
solutions to publishers, sports rights
holders, brands and media companies that
connects them with hundreds of millions
of young gamers. Gfinity is also becoming
a standalone media distribution business,
organically engaging with a rapidly
growing community of gamers on its
own digital channels; Gfinityesports.com,
RealSport101.com and StealthOptional.
com.
An overview of Gfinity’s strategy and
business model is provided within the
Gfinity At A Glance section of this
Strategic report.
Future development
Our development objectives for
2020–21 and beyond are disclosed in
the Strategic Report.
The capital structure is intended to
ensure and maintain strong credit ratings
and healthy capital ratios, to support
the Company’s business and maximise
shareholder value. It includes the
monitoring of cash balances, available
bank facilities and cash flows.
No changes were made to these
objectives, policies or processes during the
year ended 30 June 2020.
Results and dividends
The consolidated income statement is set
out on page 42.
The Company’s loss after taxation
amounted to £7.7m (2019: loss of £12.0m).
The directors do not recommend the
payment of a dividend for the year ended
30 June 2020.
31
GFINITY plc | Annual Report & Financial Statements 2020 Events since the balance
sheet date
On 9 October, Gfinity announced that
the company was undertaking a strategic
review, to identify a strategic investment
partner, that would be capable of helping
the company fully deliver on the potential
value that it has created from its leading
position in the esports market.
Research and development
The Company undertakes development
activities which involve a planned
investment in the building and
enhancement of Gfinity products.
Development expenditure is capitalised
as an intangible asset, only if the
development costs can be measured
reliably and it is anticipated that the
product being built will be completed and
will generate future economic benefits in
the form of cash flows to the Company.
Directors
Directors’ indemnities
The following directors held office as
indicated below for the year ended 30
June 2020 and up to the date of signing
the consolidated financial statements
except where otherwise shown.
The Company has made qualifying third
party indemnity provisions for the benefit
of its directors, which were made during
the year and remain in force at the date of
this report.
Neville Upton
Chairman
John Clarke
Chief Executive Officer
Jonathan Hall
Chief Finance and Operations Officer
Preeti Mardia
Non-Executive Director
Andy MacLeod
Non-Executive Director
Garry Cook
Executive Chairman
(resigned 16 March 2020)
Further information on development
activities are provided in the Strategic
Report.
Graham Wallace
Global Chief Operating Officer
(resigned 16 March 2020)
Risk Management
Information on Gfinity’s approach to
risk management is provided within the
Principal Risks and Uncertainties section of
this report.
32
GFINITY plc | Annual Report & Financial Statements 2020 GOVERNANCE
Statement of Directors’ responsibilities
The directors are responsible
for preparing the annual
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 company
financial statements in
accordance with International
Financial Reporting Standards
(“IFRSs”) as adopted by the
European Union.
Under company law the directors 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 of the profit or loss of the
Company for the period. The directors
are also required to prepare financial
statements in accordance with the rules of
the London Stock Exchange for companies
trading securities on AIM. In preparing
these financial statements, the directors are
required to:
■ present fairly the financial position,
financial performance and cashflows of
the Company;
■ select suitable accounting policies in
accordance with IAS 8 Accounting
Policies, Changes in Accounting
Estimates and Errors and then apply
them consistently;
■ make judgements and estimates that
are reasonable and prudent;
■ state whether applicable IFRSs have
been followed, subject to any material
departures disclosed and explained in
the financial statements; and
■ prepare the financial statements on
the going concern basis unless it is
inappropriate to presume that the
Company will continue in business.
The directors are 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
enable them to ensure that the financial
statements comply with the Companies
Act 2006.
They are 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.
The directors are responsible for ensuring
the annual report and the financial
statements are made available on the
corporate website. Financial statements
are published on the Company’s website in
accordance with legislation in the United
Kingdom governing the preparation and
dissemination of financial statements,
which may vary from legislation in other
jurisdictions. The directors are responsible
for the maintenance and integrity of
the corporate and financial information
included on the Company’s website.
Auditors
Each of the persons who is a director at
the date of approval of this annual report
confirms that:
■ so far as the director is aware, there is
no relevant audit information of which
the Company’s auditors are unaware;
and
■ the director has taken all the steps
that he/she ought to have taken as
a director in order to make himself/
herself aware of any relevant audit
information and to establish that the
Company’s auditors are aware of that
information.
This confirmation is given and should
be interpreted in accordance with
the provisions of Section 418 of the
Companies Act 2006.
The trade and assets of the incumbent
auditor, Rees Pollock, were acquired by
Blick Rothenberg LLP on 30 September
2019 and Rees Pollock ceased to be
regulated to perform statutory audits from
that date. The directors appointed Blick
Rothenberg LLP, trading under the Rees
Pollock brand, to fill the casual vacancy
arising and a resolution to reappoint
them will be proposed at the forthcoming
Annual General Meeting.
By order of the board:
Neville Upton
Chairman
28 October 2020
33
GFINITY plc | Annual Report & Financial Statements 2020 Annual Report & Financial Statements 2020
FINANCIAL STATEMENTS
GFINITY plc | Annual Report & Financial Statements 2020
FINANCIAL STATEMENTS
Independent Auditor’s Report to the members of
Gfinity PLC for the year ended 30 June 2020
Opinion
We have audited the financial
statements of Gfinity PLC
(‘the parent company’) and
its subsidiaries (the ‘group’)
for the year ended 30 June
2020 which comprise the
group statement of profit or
loss, the group statement
of comprehensive income,
the group and company
statements of financial
position, the group and
company statements of
changes in equity, the group
and company statements of
cash flows 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 International Financial
Reporting Standards (IFRSs)
as adopted by the European
Union and, as regards the
parent company financial
statements, as applied
in accordance with the
Companies Act 2006.
In our opinion:
■ the financial statements give a true
and fair view of the state of the group’s
and parent company’s affairs as at 30
June 2020, and of the group’s and the
parent company’s loss for the year then
ended;
■ the group financial statements have
been properly prepared in accordance
with IFRSs as adopted by the European
Union;
■ the parent company financial
statements have been properly
prepared in accordance with IFRSs
as adopted by the European Union
and as applied in accordance with the
provisions of the Companies Act
2006; and
■ the financial statements 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 group and parent
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 as
applied to SME listed entities, 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 the
ISAs (UK) require us to report to you where:
■ 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 group’s
or the parent 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.
Key audit matters
Key audit matters are those matters
that, in our professional judgment, were
of most significance in our audit of the
financial statements of the current period
and include the most significant assessed
risks of material misstatement (whether or
not due to fraud) we identified, including
those which had the greatest effect on:
the overall audit strategy, the allocation of
resources in the audit; and directing the
efforts of the engagement team. These
matters were addressed in the context of
our audit of the financial statements as a
whole, and in forming our opinion thereon,
and we do not provide a separate opinion
on these matters.
36
GFINITY plc | Annual Report & Financial Statements 2020 FINANCIAL STATEMENTS
Independent Auditor’s Report to the members of
Gfinity PLC for the year ended 30 June 2020 (continued)
Key audit matter
How the scope of our audit addressed the risk
Going concern assessment (Group and parent company)
At the balance sheet date the group had net current assets of
£1.1m, which includes cash and cash equivalents of £1.6m. The
group’s post-tax loss for the year was £7.7m and it reported net
cash used in operating activities of £5.3m. Continued losses of
this magnitude would result in a rapid depletion of cash reserves
and the corresponding net asset position of the group. If the
going concern assumption were not appropriate this would
have a pervasive effect which could impact on the group’s and
parent company’s ability to realise assets in the normal course of
business.
The appropriateness of applying the going concern basis has
been referenced in note 2 of the financial statements.
We evaluated the directors’ assessment of going concern by
reviewing cash flow forecasts prepared by management and
considering the impact of events that had taken place subsequent
to the balance sheet date but prior to the date of approval of the
accounts, including the impact of the Covid-19 pandemic.
We challenged the significant inputs and assumptions used in the
forecast model and evaluated the feasibility of options available to
management in the event that the projected cash flows fall below
forecast figures. Specifically, we considered the evidence provided
by management in support of their view that the Group would be
able to raise further funds through another round of investment
funding.
The Group’s ability to avoid additional fund raising is particularly
sensitive to revenue assumptions which are inherently difficult to
predict. Consequently, it is a reasonably possible outcome that the
group and parent company will need to seek additional funding,
meaning management’s assessment of the likelihood of being able
to raise such funding is critical to their conclusion that there is no
material uncertainty in relation to the group and parent company’s
ability to continue as a going concern.
In light of the evidence available at the date of this report, we
consider the judgements made by management in applying the
going concern assumption to be reasonable.
Furthermore, we considered the disclosure in note 2 to the financial
statements to be appropriate having given specific regard to this
being an area of critical accounting estimate and judgement.
Goodwill impairment assessment (Group)
The group had goodwill of £2.5m (note 14) with an indefinite life
as at 30 June 2020, which is required to be tested for impairment
on an annual basis.
Management have performed a full impairment review to
compare the carrying amount of goodwill to its recoverable
value, being the higher of value-in-use and fair value less costs
to dispose. The directors have allocated goodwill to individual
cash generating units (‘CGUs’) and the determination of the
recoverable amount of the CGUs requires significant estimation
and judgement, as disclosed in note 3. Accordingly, the carrying
value of goodwill has been identified as a key audit risk.
We evaluated Management’s assessment of the carrying value of
goodwill by reviewing the cash flow and profit forecasts included in
the directors’ value-in-use calculations for respective CGUs.
We challenged the significant inputs and assumptions used in the
calculations and performed sensitivity analysis to the forecasts to
ascertain the extent to which reasonable adverse changes would,
either individually or in aggregate, require the impairment of
goodwill.
Based on our procedures and the evidence available to the date
of this report we concur with Management’s conclusion that no
impairment to the carrying value of goodwill is necessary.
37
GFINITY plc | Annual Report & Financial Statements 2020 FINANCIAL STATEMENTS
Independent Auditor’s Report to the members of
Gfinity PLC for the year ended 30 June 2020 (continued)
Key audit matter
How the scope of our audit addressed the risk
For the purposes of this assessment, the value-in-use assessment is
calculated on the same basis as that applied to the assessment of
goodwill referred to above, and was therefore subject to the same
audit procedures.
Based on our procedures and the evidence available to the date
of this report we concur with Management’s conclusion that no
impairment to the carrying value of investments is necessary.
Valuation of investments (Parent company)
The company had investments in its subsidiaries of £4.5m
(note 14) as at 30 June 2020, which is required to be tested for
impairment on an annual basis.
Management assess the valuation of these investments with
reference to their recoverable amount, being the higher of
the assets’ fair value less costs to sell and value-in-use. The
determination of the recoverable amount of the investments
requires significant estimation and judgement, as disclosed
in note 3. Accordingly, the valuation of investments has been
identified as a key audit risk.
This is not a complete list of all risks identified by our audit.
38
GFINITY plc | Annual Report & Financial Statements 2020 Our application of materiality
In planning and performing our audit
we applied the concept of materiality.
An item is considered material if it could
reasonably be expected to change the
economic decisions of a user of the
financial statements. We used the concept
of materiality to both focus our testing
and evaluate the impact of misstatements
identified. In particular, we looked at where
the directors made subjective judgements,
for example in respect of significant
accounting estimates that involved making
assumptions and considering future events
that are inherently uncertain.
Based on our professional judgement, we
determined overall materiality for both the
parent company’s and the group’s financial
statements as a whole to be £400,000
(2019: £700,000). In determining this, we
considered a range of benchmarks with
specific focus on the loss for the year, total
revenue for the year and total assets as at
the balance sheet date. This materiality
level represents 4.8% (2018: 5.8%) of loss
before tax, 8.9% (2019: 8.9%) of revenue
and 5.8% (2018: 10.0%) of total assets.
We report to the Audit Committee all
identified unadjusted errors in excess
of £40,000. Errors below that threshold
would also be reported if, in our opinion
as auditor, disclosure was required on
qualitative grounds.
An overview of the scope
of our audit
We tailored the scope of our audit to
ensure that we performed enough work to
be able to give an opinion on the financial
statements as a whole, taking into account
the structure of the group and the parent
company, the accounting processes and
controls, and the industry in which they
operate.
The group is comprised of the parent
company and its two subsidiaries, one of
which is based in the UK with the other
operating in the US. The parent company
was subject to a full scope audit based
on the materiality set out above and the
two subsidiaries were subject to specified
audit procedures where the extent of our
testing was based on our assessment of
the risks of material misstatement and of
the materiality of the group.
All audit work to respond to the risks of
material misstatement of both the group
and the parent company was performed
directly by the audit engagement team.
Other information
The directors are 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.
39
GFINITY plc | Annual Report & Financial Statements 2020 FINANCIAL STATEMENTS
Independent Auditor’s Report to the members of
Gfinity PLC for the year ended 30 June 2020 (continued)
members those matters we are required
to state to them in an Auditors’ 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.
Philip Vipond
Senior Statutory Auditor
for and on behalf of
Rees Pollock,
Chartered Accountants
Statutory Auditor
35 New Bridge Street
London
EC4V 6BW
28 October 2020
for such internal control as the directors
determine is necessary to enable the
preparation of financial statements that are
free from material misstatement, whether
due to fraud or error.
In preparing the financial statements, the
directors are responsible for assessing the
group’s and the parent 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 directors either
intend to liquidate the group or the parent
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
these 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 this 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
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 the knowledge and
understanding of the group and the parent
company and their environment obtained
in the course of the audit, we have not
identified material misstatements in the
strategic report or 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 by the parent company, or
returns adequate for our audit have
not been received from branches not
visited by us; or
■ the parent company 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 directors
As explained more fully in the directors’
responsibilities statement, the directors
are responsible for the preparation of the
financial statements and for being satisfied
that they give a true and fair view, and
40
GFINITY plc | Annual Report & Financial Statements 2020 GFINITY plc | Annual Report & Financial Statements 2020
4141
GFINITY plc | Annual Report & Financial Statements 2020 FINANCIAL STATEMENTS
Group Statement of Profit or Loss
Director
Notes
1 July 2019 to 30 June 2020
1 July 2018 to 30 June 2019
£
£
CONTINUING OPERATIONS
Revenue
Cost of sales
Gross Profit / (Loss)
Other income
Administrative expenses
Operating loss
Finance income
Finance costs
Share of net loss of associates &
impairment of associates
Loss on ordinary activities before tax
Taxation
Retained loss from continuing
operations
Profit from discontinued operations
Earnings per share
4
7
6
9
9
10
29
21
4,485,565
(1,714,740)
2,770,825
73,041
(10,681,476)
(7,837,610)
2,622
(39,768)
(308,214)
(8,182,970)
-
457,663
(7,725,307)
-
(7,725,307)
(0.01)
7,870,166
(6,832,652)
1,037,514
0
(12,106,612)
(11,069,098)
6,481
(1,583)
(991,951)
(12,056,151)
-
59,832
(11,996,319)
1,911
(11,994,408)
(0.04)
42
GFINITY plc | Annual Report & Financial Statements 2020 FINANCIAL STATEMENTS
Group Statement of Comprehensive Income
Director
Notes
1 July 2019 to 30 June 2020
1 July 2018 to 30 June 2019
£
£
GROUP STATEMENT OF COMPREHENSIVE INCOME
Loss for the period
(7,725,307)
(11,994,408)
Other comprehensive income
Items reclassified to profit or loss
Changes in the fair value of derivatives
recognised at fair value
Items that will not be reclassified to
profit or loss
Derivatives settled during the period
reclassified to profit and loss
Foreign exchange loss on retranslation
of foreign subsidiaries
Other comprehensive income for
the period
Total comprehensive income for
the period
-
-
(6,117)
(6,117)
58,083
(166,504)
2,221
(106,200)
(7,731,424)
(12,100,609)
43
GFINITY plc | Annual Report & Financial Statements 2020
FINANCIAL STATEMENTS
Group Statement of Financial Position
Director
Notes
30 June 2020
£
30 June 2019
£
NON CURRENT ASSETS
Property, plant and equipment
Right of Use assets
Goodwill
Intangible fixed assets
Investment in Associate
CURRENT ASSETS
Trade and other receivables
Cash and cash equivalents
Current tax assets
TOTAL ASSETS
EQUITY AND LIABILITIES
Equity
Ordinary shares
Share premium account
Other reserves
Retained earnings
Total equity
Non-current Liabilities
Deferred tax liabilities
Current liabilities
Trade and other payables
Total liabilities
11
12
14
13
16
17
18
28
20
28
19
213,288
428,305
2,544,526
613,164
-
3,799,283
1,391,332
1,600,597
-
2,991,929
6,791,212
725,868
44,405,085
3,132,220
(43,457,102)
4,806,071
92,059
1,893,081
1,985,141
483,112
-
2,544,526
1,033,993
-
4,061,631
2,322,379
648,454
-
2,970,833
7,032,465
362,897
37,455,838
1,637,763
(35,731,794)
3,724,704
322,718
2,985,042
3,307,760
TOTAL EQUITY AND LIABILITIES
6,791,212
7,032,465
The notes on pages 52 to 85 form an integral part of these financial statements.
Signed on behalf of the board on 28 October 2020:
Neville Upton
Chairman
Jonathan Hall
Chief Financial and Operations Officer
44
GFINITY plc | Annual Report & Financial Statements 2020 FINANCIAL STATEMENTS
Company Statement of Financial Position
Director
Notes
30 June 2020
£
30 June 2019
£
NON CURRENT ASSETS
Property, plant and equipment
Right of Use assets
Investment in Subsidiaries
Intangible fixed assets
Investment in Associate
CURRENT ASSETS
Trade and other receivables
Cash and cash equivalents
Current tax assets
TOTAL ASSETS
EQUITY AND LIABILITIES
Total Equity
Ordinary shares
Current liabilities
Other reserves
Retained earnings
Total equity
Current Liabilities
Trade and other payables
Derivative financial instruments
Total liabilities
TOTAL EQUITY AND LIABILITIES
11
12
14
13
16
17
18
28
20
19
187,176
428,305
4,466,133
57,724
-
5,139,338
2,843,800
1,531,360
-
4,375,160
9,514,498
725,868
44,405,085
3,137,832
(40,601,156)
7,667,629
1,846,869
-
1,846,869
9,514,498
459,103
-
4,466,133
-
-
4,925,236
3,760,364
603,076
-
4,363,440
9,288,676
362,897
37,455,838
1,637,259
(33,107,935)
6,348,059
2,940,616
-
2,940,616
9,288,676
The notes on pages 52 to 85 form an integral part of these financial statements.
As permitted by Section 408 of the Companies Act 2006, the profit and loss account of the Company is not presented as part of these
financial statements. The parent Company’s loss for the year amounts to £7,493,221 (2019: loss of £9,970,720).
Signed on behalf of the board on 28 October 2020:
Neville Upton
Chairman
Jonathan Hall
Chief Financial and Operations Officer
45
GFINITY plc | Annual Report & Financial Statements 2020 FINANCIAL STATEMENTS
Group Statement of Changes in Equity
Director
Ordinary
shares
£
Share
premium
Share option
reserve
£
£
Retained
earnings
£
Forex
Total equity
£
£
At 30 June 2018
286,348
31,565,735
587,256
(23,628,965)
(1,717)
8,808,657
Loss for the period
Other Comprehensive
Income
Total comprehensive
income
Proceeds of Shares
Issued
Shares as
Consideration
Share issue costs
Share options
expensed
Total transactions
with owners,
recognised directly
in equity
-
-
-
-
-
-
75,000
5,925,000
1,549
-
-
157,211
(192,107)
-
-
-
-
-
-
-
1,050,002
76,549
5,890,104
1,050,002
(11,994,408)
-
(11,994,408)
(108,421)
2,221
(106,200)
(12,102,830)
2,221
(12,100,609)
-
-
-
-
0
-
-
-
-
6,000,000
158,760
(192,107)
1,050,002
0
7,016,656
At 30 June 2019
362,897
37,455,839
1,637,258
(35,731,795)
504
3,724,704
46
GFINITY plc | Annual Report & Financial Statements 2020
FINANCIAL STATEMENTS
Group Statement of Changes in Equity (Continued)
Director
Ordinary
shares
£
Share
premium
Share option
reserve
£
£
Retained
earnings
£
At 30 June 2019
362,897
37,455,839
1,637,258
(35,731,795)
Forex
Total equity
£
504
£
3,724,704
Loss for the period
Other Comprehensive
Income
Total comprehensive
income
Proceeds of Shares
Issued
Shares as
consideration
Share issue costs
Share options
expensed
Total transactions
with owners,
recognised directly
in equity
-
-
-
-
-
-
362,971
7,372,852
-
(423,605)
-
-
-
-
1,500,573
362,971
6,949,247
1,500,573
-
-
-
-
-
-
(7,725,307)
-
(7,725,307)
-
(6,117)
(6,117)
(7,725,307)
(6,117)
(7,731,424)
-
-
-
-
-
-
-
-
-
-
7,735,823
-
(423,605)
1,500,573
8,812,791
At 30 June 2020
725,868
44,405,086
3,137,831
(43,457,102)
(5,613)
4,806,070
47
GFINITY plc | Annual Report & Financial Statements 2020
FINANCIAL STATEMENTS
Company Statement of Changes in Equity
Director
Ordinary shares
Share premium
Share option reserve
Retained earnings
Total equity
£
£
£
£
£
At 30 June 2018
286,348
31,565,734
587,256
(23,028,794)
9,410,544
-
-
-
-
-
-
75,000
5,925,000
-
1,549
-
(192,107)
157,211
-
1,050,002
76,549
5,890,104
1,050,002
-
-
-
-
-
-
(9,970,720)
(9,970,720)
(108,421)
(108,421)
(10,079,141)
(10,079,141)
-
-
-
-
-
6,000,000
(192,107)
158,760
1,050,002
7,016,655
362,897
37,455,838
1,637,258
(33,107,935)
6,348,058
-
-
-
-
362,971
7,372,852
-
-
-
(423,605)
-
-
-
-
-
-
-
1,500,573
362,971
6,949,247
1,500,573
(7,493,221)
(7,493,221)
-
-
(7,493,221)
(7,493,221)
-
-
-
-
-
7,735,823
(423,605)
-
1,500,573
8,812,791
725,868
44,405,085
3,137,831
(40,601,156)
7,667,628
Loss for the period
Other Comprehensive
Income
Total comprehensive
income
Proceeds of Shares
Issued
Share issue costs
Shares as consideration
Share options
expensed
Total transactions with
owners, recognised
directly in equity
At 30 June 2019
Loss for the period
Other comprehensive
income
Total comprehensive
income
Proceeds of Shares
Issued
Shares as Consideration
Share issue costs
Share options
expensed
Total transactions with
owners, recognised
directly in equity
At 30 June 2020
48
GFINITY plc | Annual Report & Financial Statements 2020
GFINITY plc | Annual Report & Financial Statements 2020
4949
GFINITY plc | Annual Report & Financial Statements 2020 FINANCIAL STATEMENTS
Group Statement of Cash Flows
Director
Note
30-Jun-20
£
30-Jun-19
£
(5,290,351)
(8,470,887)
2,622
(100,765)
(57,724)
(308,214)
-
(464,081)
7,312,218
(597,015)
(2,511)
6,712,692
958,260
(6,117)
648,454
1,600,596
6,481
(123,558)
-
(270,661)
17,678
(370,061)
5,807,893
5,807,893
(3,033,055)
2,221
3,679,288
648,454
26
9
11
13
Cash flow used in operating activities
Net cash used in operating activities
Cash flow from / (used in) investing
activities
Interest received
Additions to property, plant and
equipment
Additions to intangible Assets
Investment in Associate
Proceeds from sale of discontinued
operations
Net cash used in investing activities
Cash flow from / (used in) financing
activities
Issue of equity share capital
Repayment of leases
Bank interest payable
Net cash from financing activities
Net increase in cash and cash equivalents
Effect of Currency translation on cash
Opening cash and cash equivalents
Closing cash and cash equivalents
50
GFINITY plc | Annual Report & Financial Statements 2020
FINANCIAL STATEMENTS
Company Statement of Cash Flows
Director
Note
30-Jun-20
£
30-Jun-19
£
26
9
11
13
Cash flow used in operating activities
Net cash used in operating activities
Cash flow from/(used in)
investing activities
Interest received
Additions to property, plant and
equipment
Additions to Intangible Assets
Acquisition/Disposal of subsidiaries, net
of cash acquired
Investment in Associate
Inter-company loans
Net cash used in investing activities
Cash flow from / (used in)
financing activities
Issue of equity share capital
Repayment of leases Bank
interest payable
Net cash from financing activities
Net increase in cash and cash equivalents
Opening cash and cash equivalents
Closing cash and cash equivalents
(5,322,647)
(7,579,305)
2,622
(98,444)
(57,724)
-
(308,214)
-
(461,760)
7,312,218
(597,014)
(2,511)
6,712,692
928,285
603,076
1,531,360
6,481
(115,256)
-
45,000
(270,661)
(854,293)
(1,188,730)
5,807,893
5,807,893
(2,960,142)
3,563,216
603,076
51
GFINITY plc | Annual Report & Financial Statements 2020
FINANCIAL STATEMENTS
Notes to the Financial Statements
1. General Information
Gfinity plc (“the Company”) is a public company limited by shares incorporated in the United
Kingdom under the Companies Act 2006, registered in England and Wales and is AIM listed.
The address of the registered office is given on page 6. The registered number of the company
is 08232509.
The functional and presentational currency is £ sterling because that is the currency of the
primary economic environment in which the group operates. Foreign operations are included
in accordance with the policies set out in note 2. Principal activities are discussed in the
Strategic report.
2. Accounting Policies
Basis of preparation
The Company has prepared the accounts
on the basis of all applicable International
Financial Reporting Standards (IFRS),
including all International Accounting
Standards (IAS), Standing Interpretations
Committee (SIC) and the International
Financial Reporting Interpretations
Committee (IFRIC) interpretations issued
by the International Accounting Standards
Board (IASB) with effective dates for
accounting periods beginning on or after
1 July 2019, together with those parts of
the Companies Act 2006 applicable to
companies reporting under IFRS.
The accounts have been prepared on the
historical cost basis, except for otherwise
stated below. The principal accounting
policies, which have been consistently
applied throughout the period presented,
are set out below.
The preparation of financial statements
in conformity with IFRS requires the use
of certain estimates. It also requires
management to exercise its judgement
in the process of applying the company’s
accounting policies. Estimates and
judgements are continually reviewed
and are based on historical experience
and other factors including expectations
of future events that are believed to be
reasonable under the circumstances.
52
Standards, Interpretation and
amendments to published
standards effective in the accounts
The Group has applied the following
new standards and interpretations for the
first time for the annual reporting period
commencing 1 July 2019:
Standards, interpretation and
amendments to published
standards that are not yet
effective
New standards and interpretations that
are in issue but not yet effective are listed
below:
■ IFRS 16 Leases.
■ IFRIC 23 Uncertainty over Income Tax
Treatments.
■ Amendments to IFRS 9 Prepayment
Features with Negative Compensation.
■ Amendments to IAS 28 Long-term
Interests in Associates and Joint
Ventures.
■ Amendments to IAS 19 Plan
Amendment, Curtailment or
Settlement.
■ Annual Improvements to IFRS
Standards 2015-2017 Cycle
(Amendments to IFRS 3, IFRS 11, IAS
12 and IAS 23).
The nature and effect of the changes to
the Group’s accounting policies as a result
of the adoption of IFRS 16 is set out in
note 12.
The adoption of the other standards and
interpretations listed above has not led
to any changes to the Group’s accounting
policies or had any other material impact
on the financial position or performance of
the Group.
■ Amendments to IAS 1 and IAS 8
Definition of Material.
■ Amendments to IFRS 3 Definition of a
Business.
■ Amendments to References to the
Conceptual Framework in IFRS
Standards.
■ IFRS 17 Insurance Contracts.
■ Amendments to IFRS 10 and IAS 28:
Sale or Contribution of Assets between
an Investor and its Associate or Joint
Venture.
The adoption of the above standards and
interpretations is not expected to lead to
any changes to the Group’s accounting
policies or have any other material impact
on the financial position or performance of
the Group.
Going concern
At the end of the period the Group had
cash and cash equivalents amounting
to £1,600,597 and the Company had
cash and cash equivalents amounting to
£1,531,360. Further to this at the balance
sheet date, there were 203,695,500
GFINITY plc | Annual Report & Financial Statements 2020
warrants outstanding over ordinary shares in the company at an
exercise price of 1p, to be exercised on or before 20 October
2021. Given the positive variance of the share price at the time of
their assessment, the directors believe that , that it is reasonable
to assume that these warrants will be exercised, which will provide
further cash to the Group of £2,036,955.
As outlined in the Strategic Report, during the year to 30 June
2020, the Group announced a significant restructure, with a view
to delivering a reduction in the operating cost base, through
focusing on three core areas in which the business already enjoys
a competitive advantage and in which the directors believe it can
drive profitable growth;
■ Gfinity’s own Digital Media Network monetised through
advertising, branded partnerships and affiliate referral income.
■ Jointly owned partnerships, such as that which commenced
shortly following the year end with Abu Dhabi Motorsports
Management, in which Gfinity retains a share in the
commercial rights.
■ Building digital audience and engagement on a paid for
service delivery basis for partners including major sports rights
holders, games publishers, media businesses and corporate
brands.
Management have prepared forecasts to 31 December 2021,
which indicate that if targeted profitability is achieved then current
cash reserves, supplemented by expected further exercise of
warrants as outlined above, would provide sufficient funding to
allow the Group to continue operating for a period of at least 12
months following the approval of these financial statements.
As a result, the directors do not believe that further cash is
required in order to deliver on current plans for the business. It
should be noted, however, that in a sector that is still rapidly
developing and in a period of political and economic uncertainty,
there are inherent uncertainties within the forecasts. In this
regard, in a period in which a high level of revenue growth is
expected, cash flow forecasts are particularly sensitive to the
delivery of new client contracts. While the directors are confident
that these contracts will be secured, the timing of this cannot
be certain. In this context, there remains a material risk that the
cash flow forecasts are not met, which would result in additional
funding being required and therefore the directors assessment of
the likelihood of being able to raise such funding is critical to their
conclusion that there is no material uncertainty in relation to the
Group and the Company’s ability to continue as a going concern.
In the event that further cash reserves were required, given the
continued support of the Group’s major shareholders, strong
investor support for Gfinity shares over recent months and high
levels of investment activity in the whole sector, it is the belief
of the directors that the Group would be able to secure such
additional investment. This is evidenced by the fact that Gfinity
was able to secure an oversubscribed placing in April of this
year at a time of peak uncertainty in the financial markets and at
a point at which the size of Gfinity’s forward order book and its
owned digital community was significantly below its current level.
On that basis, the directors believe that it is appropriate for the
accounts to be prepared on a going concern basis.
Notwithstanding this confidence over the availability of cash
reserves to meet existing plans, the directors are also conscious
of the extent to which a drive to break even in the near term may
mean that certain investment opportunities are not pursued. This
could result in the business not fully capitalising on the market
leading position it has created within the sector. To that end, on
9 October 2020, the Group announced the initiation of strategic
review process, in order to identify a potential strategic investment
partner, who would not only bring the funding to support further
growth opportunities, but also help to drive scale and reach to
deliver on the full potential of the position created.
Basis of consolidation
The Group accounts consolidate those of the Company and all
of its subsidiary undertakings drawn up to 30 June each year.
Subsidiary undertakings are those entities over which the Group
has the ability to govern the financial and operating policies
through the exercise of voting rights. The results of subsidiaries
acquired or sold are consolidated for the periods from or to the
date on which control passed. Acquisitions are accounted for
under the acquisition method.
Goodwill arising on acquisition is recognised as an asset and
initially measured at cost, being the excess of the cost of the
business combination over the Group’s interest in the net fair
value of the identifiable assets, liabilities and contingent liabilities
recognised. If, after reassessment, the Group’s interest in the
net fair value of the acquiree’s identifiable assets, liabilities
and contingent liabilities exceeds the cost of the business
combination, the excess is recognised immediately in profit or
loss.
All intra group balances, transactions, income and expenses and
profit and losses on transactions between the Company and its
subsidiaries and between subsidiaries are eliminated.
Goodwill
Goodwill is initially recognised and measured as set out above.
Goodwill is not amortised but is reviewed for impairment at least
annually. For the purpose of impairment testing, goodwill is
allocated to each of the Group’s cash-generating units (‘CGUs’)
expected to benefit from the synergies of the combination. CGUs
to which goodwill has been allocated are tested for impairment
annually, or more frequently when there is an indication that the
unit may be impaired. If the recoverable amount of the CGU is
less than the carrying amount of the unit, the impairment loss
is allocated first to reduce the carrying amount of any goodwill
allocated to the unit and then to the other assets of the unit pro-
rata on the basis of the carrying amount of each asset in the unit.
An impairment loss recognised for goodwill is not reversed in a
subsequent period.
Investment in associates
An associate is an entity over which the Group has significant
influence and that is neither a subsidiary nor an interest in a joint
venture. Significant influence is the power to participate in the
financial and operating policy decisions of the investee but is not
control or join control over those policies.
The Group’s interests in jointly controlled entities are incorporated
in the financial information using the equity method of accounting.
Investments in joint ventures are carried in the balance sheet at
cost as adjusted by post acquisition changes in the Group’s share
of the net assets of the associate, less any impairment in the value
of the individual investments. The Group’s share of the net profit
or loss of the joint venture is shown as a single line item in the
Consolidated Statement of Comprehensive Income.
Where the Group transacts with a joint venture any profit or loss
arising is eliminated to the extent of the Group’s interest in the
relevant joint venture.
53
GFINITY plc | Annual Report & Financial Statements 2020 FINANCIAL STATEMENTS
Notes to the Financial Statements (Continued)
The carrying amount of equity-accounted investments is tested for
impairment at least annually.
Investment in Subsidiaries
Investments in subsidiaries are held in the Company balance sheet
at cost and reviewed annually for impairment.
Revenue
Revenue comprises the fair value of the consideration received
or receivable for the sale of services in the normal course of the
Group’s activities. Revenue is shown net of value added tax.
To determine whether to recognise revenue, the Group
follows a 5-step process:
1. Identifying the contract with a customer
2. Identifying the performance obligations
3. Determining the transaction price
4. Allocating the transaction price to the performance obligations
5. Recognising revenue when/as performance obligation(s) are
satisfied.
Revenue is recognised either at a point in time or over time, when
(or as) the Group satisfies performance obligations by transferring
the promised goods or services to its customers. The Group bases
its estimates on historical results, taking into consideration the
type of customer, the type of transaction and the specifics of each
arrangement.
Revenue comprises of:
■ Partner programme delivery fees: Revenue recognised in line
with the date at which work is performed.
■ Sponsorship revenues: Revenue is recognised on the date
the relevant sponsored event takes place. In the event of
long-term sponsorship contracts, the revenue is released on
a straight-line basis across the term of the contract, except in
instances where a significant proportion of the revenue relates
to specific activation activities, in which case the revenue is
released in line with when that work is performed.
■ Advertising revenues: Fees are earned each time a user clicks
on one of the ads that are displayed on the website. Revenue
is recognised on a pay-per-click, or cost per mille (CPM) basis.
■ Broadcaster revenues: Rights fees are received from linear
broadcasters and online streaming platforms in return for
rights to access broadcast content. Revenue is recognised
once the relevant performance obligations are completed
which is typically at the point the broadcast occurs.
■ Consultancy Fees: Revenue is recognised in line with the
profile of resources dedicated to the programme across the
assignment duration.
Leases and right-of-use-assets
The Group recognises a right-of-use asset and a lease liability at
the lease commencement date. The right-of-use asset is initially
measured at cost, which comprises the initial amount of the lease
liability adjusted for any lease payments made at or before the
commencement date, plus any initial direct costs incurred and an
estimate of costs to dismantle and remove the underlying asset or
to restore the underlying asset or the site on which it is located,
less any lease incentives received.
The right-of-use asset is subsequently depreciated using the
straight-line method from the commencement date to the end
of the lease term, unless the lease transfers ownership of the
underlying asset to the Group by the end of the lease term or
the cost of the right-of-use asset reflects that the Group will
exercise a purchase option. In that case the right-of-use asset
will be depreciated over the useful life of the underlying asset,
which is determined on the same basis as those of property and
equipment. In addition, the right-of-use asset is periodically
reduced by impairment losses, if any, and adjusted for certain
remeasurements of the lease liability.
The lease liability is measured at amortised cost using the effective
interest method, and is initially measured at the present value
of the lease payments that are not paid at the commencement
date, discounted using the interest rate implicit in the lease or, if
that rate cannot be readily determined, the Group’s incremental
borrowing rate.
Short-term leases and leases of low-value assets:
The Group has elected not to recognise right-of-use assets and
lease liabilities for leases of low-value assets and short-term
leases. The Group recognises the lease payments associated with
these leases as an expense on a straight-line basis over the
lease term.
Foreign currencies
Transactions in foreign currencies are recorded at the rates of
exchange prevailing on the dates of the transactions. At each
balance sheet date, monetary assets and liabilities that are
denominated in foreign currencies are retranslated at the rates
prevailing on the balance sheet date.
Exchange differences arising on the settlement of monetary items,
and on the retranslation of monetary items, are included in the
income statement for the year.
For the purpose of presenting consolidated financial statements,
the assets and liabilities of the Group’s foreign operations are
translated at exchange rates prevailing on the balance sheet
date. Income and expense items are translated at the average
exchange rates for the period, unless exchange rates fluctuate
significantly during that period. Exchange differences arising from
the translation of the Group’s foreign operations are recognised in
other comprehensive income.
54
GFINITY plc | Annual Report & Financial Statements 2020 Taxation
The taxation expense represents the sum of the tax currently
payable and deferred tax.
The charge for current tax is based on the results for the period
as adjusted for items that are non-assessable or disallowed. It is
calculated using tax rates that have been enacted or substantively
enacted by the balance sheet date.
Deferred tax is the tax expected to be payable or recoverable on
differences between the carrying amounts of assets and liabilities
in the financial statements and the corresponding tax bases used
in the computations of taxable profit and is accounted for using
the balance sheet liability method.
Deferred tax liabilities are generally recognised for all taxable
temporary differences, and deferred tax assets are recognised to
the extent that it is probable that taxable profits will be available
against which deductible temporary differences can be utilised.
Such assets and liabilities are not recognised if the temporary
difference arises from goodwill (or any discount on acquisition) or
from the initial recognition (other than in a business combination)
of other assets and liabilities in a transaction that affects neither
the tax profit nor the accounting profit.
The carrying amount of deferred tax assets is reviewed at each
balance sheet date and reduced to the extent that the directors
do not have a high degree of certainty that sufficient taxable
profits will be available in the medium-term to allow all or part of
the asset to be recovered.
Credits in respect of Research and Development activities are
recognised at the point at which the asset becomes profitable
and quantifiable. This is typically at the point at which a claim has
been prepared and submitted to HMRC.
Share Based Payments
The Company provides equity-settled share-based payments in
the form of share options. Equity-settled share-based payments
are measured at fair value (excluding the effect of non-market-
based vesting conditions) at the date of grant. The fair value
determined at the date of grant is expensed on a straight line
basis over the vesting period, based on the Company’s estimate
of shares which will eventually vest and adjusted for the effect
of non-market based vesting conditions. The Company uses
an appropriate valuation model utilising a Black-Scholes model
in order to arrive at a fair value at the date share options are
granted.
In instances when shares are used as consideration for goods or
services the shares are valued at the fair value of the goods or
services provided. The expense to the company is recognised at
the point the goods or services are received.
Property, plant and equipment
Property, plant and equipment are stated at historical cost less
accumulated depreciation and impairment, if any. Historical
cost includes expenditure that is directly attributable to the
acquisition of the items. Subsequent costs are included in the
carrying amount of the asset or recognised as a separate asset,
as appropriate, only when it is probable that future economic
benefits associated with the item will flow to the company and
that the cost of the item can be measured reliably. The carrying
amount of parts that are replaced is derecognised. The costs of
the day-to-day servicing of property, plant and equipment are
recognised in profit or loss as incurred.
Depreciation is calculated using the straight-line method to
allocate the cost or revalued amounts of tangible fixed assets to
their residual values over their useful economic lives, as follows:
Office equipment
3 years straight line
Computer equipment
3 years straight line
Production equipment
3 years straight line
Leasehold improvements
Over the period of the lease
or, where management have
reasonable grounds to believe
the property will be occupied
beyond the terms of the lease,
3 years straight line
The residual values and useful economic lives of the assets are
reviewed, and adjusted if appropriate, at each balance sheet date.
The carrying amount of an asset is written down immediately to
its recoverable amount if the carrying amount is greater than its
estimated recoverable value. Gains and losses on disposals are
determined by comparing the proceeds with the carrying amount
and are recognised within other gains or losses in the income
statement.
55
GFINITY plc | Annual Report & Financial Statements 2020 FINANCIAL STATEMENTS
Notes to the Financial Statements (Continued)
Intangible fixed assets
Intangible assets other than goodwill are recognised where the purchase or internal development of such assets are expected to directly
contribute towards the company’s ability to generate revenues over a multiple years.
Intangible fixed assets are stated at historical cost less accumulated amortisation and impairment, if any. The cost of intangible assets
acquired in a business combination is their fair value as at the date of acquisition. Where the cost is not clearly identifiable discounted
cash flows are utilised to estimate either the cost to develop the resource or, where there are already profits attributable the asset, to
estimate future cash inflows. Historical cost includes expenditure that is directly attributable to the acquisition or development of the
items. Subsequent costs are included in the carrying amount of the asset or recognised as a separate asset, as appropriate, only when
it is probable that future economic benefits associated with the item will flow to the company and that the cost of the item can be
measured reliably.
Amortisation is charged on a straight-line basis over the estimated useful economic life of the asset as follows:
Software development
3 years straight line
Web traffic acquired in business combination
3 years straight line
Technology Platform
5 years straight line
Customer Relationships
5 years
56
GFINITY plc | Annual Report & Financial Statements 2020 Research and development costs
Development expenditure is capitalised as an intangible asset,
only if the development costs can be measured reliably and it is
anticipated that the product being built will be completed and will
generate future economic benefits in the form of cash flows to the
Group.
Research expenditure that does not meet this criteria is
recognised as an expense as incurred. Development costs
previously recognised as an expense are not recognised as an
asset in a subsequent period.
Derivative Financial Instruments
Derivative financial assets and financial liabilities are recognised
on the Balance Sheet when the Group becomes a party to the
contractual provisions of the instrument. Derivatives are initially
recorded at fair value and are subsequently remeasured to fair
value based on mid-market prices, estimated future cash flows
and forward rates as appropriate. The fair value is re-assessed at
each period end with the movements recognised initially in the
statement of other comprehensive income before being recycled
to the income statement.
Warrants
Warrants are in respect of call options granted to investors by the
group and are classified as equity only to the extent that they do
not meet the definition of a financial liability or financial asset.
The fair value of warrants is determined at the date of grant and is
recognised in equity. When the warrants are exercised, the group
transfers the appropriate amount of shares to the investor, and the
proceeds received net of any directly attributable transaction costs
are credited directly to equity.
The group uses an appropriate valuation model utilising a Black-
Scholes model in order to arrive at a fair value at the date warrants
are granted.
Government Grants Policy
Grants that compensate the group for expenses incurred are
recognised in profit or loss as other income in the periods in
which the expenses are recognised, unless the conditions for
receiving the grant are met after the related expenses have been
recognised. In this case, the grant is recognised when it becomes
receivable.
Cash and cash equivalents
Cash and cash equivalents include cash in hand, deposits held
at call with banks, and other short-term highly liquid investments
with original maturities of three months or less. These are readily
convertible to a known amount of cash and are subject to an
insignificant risk of changes in value.
Financial liabilities and equity
Financial liabilities are obligations to pay cash or other financial
instruments and are recognised when the company becomes a
party to the contractual provisions of the instrument. Financial
liabilities are classified according to the substance of the
contractual arrangements entered into. All interest-related charges
are recognised as an expense in the income statement.
Trade and other payables are not interest bearing and are
recorded initially at fair value net of transactions costs and
thereafter at amortised cost using the effective interest rate
method.
An equity instrument is any contract that evidence a residual
interest in the assets of the Company after deducting all of its
liabilities. Equity instruments issued by the Company are recorded
at the proceeds received, net of direct issue costs.
Financial assets
Financial assets are recognised in the balance sheet when the
Company becomes a party to the contractual provisions of the
instrument and are recognised in the balance sheet at the lower of
cost and net realisable value.
Provision is made for diminution in value where appropriate.
Income and expenditure arising on financial instruments is
recognised on the accruals basis and credited or charged to the
statement of comprehensive income in the financial period to
which it relates.
Trade receivables do not carry any interest and are initially
recognised at fair value, subsequently reduced by appropriate
allowances for estimated irrecoverable amounts.
57
GFINITY plc | Annual Report & Financial Statements 2020 FINANCIAL STATEMENTS
Notes to the Financial Statements (Continued)
Goodwill carried in relation to CEVO:
In assessing the goodwill carried in respect
of the CEVO acquisition, three principal
sets of cash flows were considered:
■ Expected operating cash flows from
CEVO, Inc entity. An assumption of
5% revenue growth p.a. was applied
to actual revenue in FY20. Staff costs
were assumed to rise at 2.5% p.a. on
a per head basis, with the number
of development staff rising from 5
to 8 across the first 4 years of the
plan, remaining constant thereafter.
Non-staff costs were also assumed to
increase at 2.5% p.a.
■ Savings on development expenditure
across the Gfinity Group, through the
use of CEVO resource rather than
external freelancers across multiple
client and internal projects. Projected
costs were estimated based on actual
per head costs for development
resource in FY20, increasing in line
with the staff numbers assumed in
the operating cash flows. Freelancer
rates were based on market rates for
equivalent resource. The projections
assumed a consistent split in time
between internal and external CEVO
projects as seen in FY20. Both actual
and freelancer costs were increased
at a compound annual growth rate
(CAGR) of 2.5% p.a. throughout the
period.
Intangible assets recognised on
business combinations:
Intangible assets in business combinations
are recognised when the asset is
separately identifiable and based on the
probable future economic benefit that
arises owing to the Group’s control of the
asset. Typically, the Group will utilise a
discounted cash flow to establish the future
economic benefits and therefore the fair
value of the asset.
The Group identified three intangible
assets in relation to the two acquisitions
undertaken in the year to 30 June 2018.
As these assets have a finite economic life,
in line with IAS 36, they are only subject to
further testing for impairment when there
are either internal or external indicators
of impairment. Based on a review it was
decided that there were indicators of
impairment only in respect of the asset
attached to CEVO customer relationship,
where third party revenues had fallen
below the levels used in the calculations of
the asset value. Following further review
of updated cash flow projections relating
to the relationship, it was determined that
no impairment was required. This further
testing is discussed in the ‘Impairment
testing’ section below.
Impairment testing:
The Group tests goodwill for impairment
annually. The recoverable amounts of cash
generating units have been determined
based on value-in-use calculations which
require the use of estimates. Management
has prepared discounted cash flows based
on the latest strategic plan. Discount rate
has been calculated using the Capital
Asset Pricing model with reference to the
value of UK 10 year gilts as a proxy for a
risk free rate and the volatility of Gfinity’s
share price relative to that of AIM since
listing.
3. Critical Accounting
Judgements and Estimates
The preparation of financial statements
in conformity with IFRS requires the use
of certain estimates. It also requires
management to exercise its judgement
in the process of applying the company’s
accounting policies. Estimates and
judgements are continually reviewed
and are based on historical experience
and other factors including expectations
of future events that are believed to be
reasonable under the circumstances.
Revenue recognition:
The Group’s revenue recognition policy
is based on separating contracts into
discrete performance obligations with
revenue then recognised based on
the percentage completion of each
performance obligation. Where the value
of each distinct performance obligation
is not set out in a contract Management
estimate the value of each performance
obligation based on the level of resource
required to complete the performance
obligation in comparison to the overall
level of resource required to fulfil the
contract. For example, if a contract did
not stipulate the value by region of a
broadcast agreement management
would use appropriate weighting (e.g.
audience size) to estimate the value of
each region, with each region viewed
as a separate performance obligation.
Revenue would then be recognised based
on the percentage completion of each
performance obligation. In instances where
there is no other readily available proxy
Management will estimate the value of
each performance obligation based on the
relative cost to deliver.
Revenue settled by means other than cash
(e.g. via equity in a associate) is recognised
based on the value stipulated in the
contract for goods or services, which would
be set at fair value, with the revenue then
recognised based performance obligations
in the manner described above.
58
GFINITY plc | Annual Report & Financial Statements 2020 Share based payments:
The Company issues equity-settled share-
based payments to certain employees and
has issued warrants to investors. Such
equity-settled share-based payments are
measured at fair value at the date of grant.
This fair value is measured by use of a
Black-Scholes model.
The key assumptions used as inputs into
this model are outlined in note 22 on Share
Based Payments. In addition, the company
has issued share options as partial
consideration for services provided. The
cost of these has been recognised based
on the timing of the delivery of the service
and the fair value.
CEVO customer relationships:
The remaining value of CEVO customer
relationship was assessed by way of
an NPV analysis of revenue and costs
expected from the customer in question
across the remaining two years of the
original intangible asset life.
Both revenue and cost for FY21 as part of
this analysis were set in line with actuals
for FY20, prior to a 10% uplift in FY22, as
further expansion of the CEVO product,
across the clients global network are
expected. Cash flows were discounted
using a cost of capital of 13%.
The result of the above analysis gave an
NPV of £0.2m, in line with the carrying
value of the intangible. No impairment is
therefore proposed.
Valuation of investments:
Investments held in the company
statement of financial position have
been tested in line with the goodwill
impairments described above
Deferred tax:
The Company has not recognised a
deferred tax asset in respect of its losses
given that there is no track record of
taxable profits at this time. Deferred
tax assets will be recognised when the
Company has established a track record
of expected future taxable profit. Detail
of the unrecognised asset as at the period
end are provided in note 10(c).
■ Gross profit generated across the
group through deployment of CEVO
technology, including the tournament
platform and community building
toolset. Based on actual revenue
for FY20, growing at a CAGR of 5%
throughout the period.
All cash flows were considered over
a 5-year period, with a terminal value
applied to cash flows beyond that date. A
discount factor of 13%, unchanged from
prior year calculations, was applied in
order to determine the present value of
these cash flows.
The calculations indicated an NPV of
£2.9m, a £2.0m surplus over the carrying
value of the combined value of the
goodwill and intangible assets.
Goodwill carried in relation to
Real Sport:
The carrying value of goodwill in relation to
RealSport was assessed using the bottom
up financial model created as part of the
business planning process, which reflects
the strong growth in both audience and
monetisation seen through FY20.
This model assumes a monthly average
number of unique visitors to the platform
through FY21 of 7.7m. By way of
comparison the monthly average for the
final quarter of FY20 was 4.0m, which
represented a 210% uplift on the figure for
the equivalent period in FY19. Thereafter
it is assumed that audience numbers will
increase at 30% p.a. for the first 2 years,
before levelling off slightly with a 5%
increase thereafter.
Revenue has been calculated using a
blended rate, factoring in both real time
bidding and direct sale banner advertising,
video advertising and cost per click affiliate
revenues, giving an overall rate of 10p per
annum per monthly average user.
59
GFINITY plc | Annual Report & Financial Statements 2020 4. Revenue
The Group’s policy on revenue recognition is as outlined in note 2. The year ending 30 June 2020 included £0.7m included in the
contract liability balance at the beginning of the period (2019: £0.9m).
The Group’s revenue disaggregated by primary geographical markets is as follows:
30 June 2020
30 June 2019
Gfinity
CEVO
Total
Gfinity
CEVO
Total
3,431,492
-
3,431,492
7,082,948
-
7,082,948
27,206
157,829
185,035
539,210
248,007
787,218
869,039
-
869,039
-
-
-
4,327,736
157,829
4,485,565
7,622,159
248,007
7,870,166
United
Kingdom
North
America
ROW
Total
The Group’s revenue disaggregated by pattern of revenue recognition is as follows:
30 June 2020
30 June 2019
Gfinity
CEVO
Total
Gfinity
CEVO
Total
2,582,447
-
2,582,447
5,251,702
27,778
5,279,480
1,745,289
157,829
1,903,118
2,370,457
220,230
2,590,686
Services
transferred
at a point
in time
Services
transferred
over time
Total
4,327,736
157,829
4,485,565
7,622,159
248,007
7,870,166
As at 30 June 2020 the Group had the amounts shown below held on the consolidated statement of financial position in relation to
contracts either performed in full during the year or ongoing as at the year end. All amounts were either due within one year or, in the
case of contract liabilities, the work was to be performed within one year of the balance sheet date
June 2020
£608,189
£154,287
£358,246
June 2019
£1,085,158
£418,286
£521,010
Trade Receivables
Contract Assets
Contract Liabilities
60
GFINITY plc | Annual Report & Financial Statements 2020 Trade receivables are non-interest bearing and are generally on 30-day terms.
Contract assets are initially recognised for revenue earned while the services are delivered over time or when billing is subject to final
agreement on completion of the milestone. Once the amounts are billed the contract asset is transferred to trade receivables.
Contract liabilities arise when amounts are paid in advance of the delivery of the service. These are then transferred to the statement
of comprehensive income as either milestones are completed or work is completed overtime. Revenue of £0.5m was recognised in the
year ending 30 June 2020 that was held as a contract liability as 30 June 2019. All of these amounts were held in Gfinity.
5. Segmental Information
The Group manage the business based on two segments: Gfinity and CEVO. The two reportable segments operate as follows:
Gfinity: This segment is the largest part of the business and encompasses the majority of esports related activities and broadcast and
production capabilities.
CEVO: The in-house development capabilities which are key to delivering both Gfinity plc’s strategy and online esports solutions for
third parties. This segment also includes several US based technology revenue streams
30 June 2020
30 June 2019
Gfinity
CEVO
Group
Gfinity
CEVO
Group
Revenue
4,327,736
157,829
4,485,565
7,622,158
248,007
7,870,166
Loss
(6,472,673)
(1,252,633)
(7,725,307)
(11,481,149)
(513,259)
(11,994,408)
Gfinity principally operate in the UK and CEVO principally in the US.
The Group has three single external customers which have revenue equal to or greater than 10% of the group’s revenue. The revenue
from each of these customers is: £1.9m, £0.9m, and £0.5m. The customers are major sports rights holders, financial services and media
companies. These revenues are attributed to the Gfinity segment.
Segmental information for the statement of financial position has not been presented as management do not view this information
on a segmental basis. Intra-group recharges are not considered when monitoring performance with central charges (such as senior
management costs) retained in Gfinity plc rather than being apportioned across segments.
61
GFINITY plc | Annual Report & Financial Statements 2020 6. Operating Expenses
Operating loss is stated after charging:
Depreciation of property, plant and equipment
Depreciation on Right of Use assets
Amortisation & impairment of intangible fixed assets
Rentals under short-term leases
Expensed development costs
Staff costs (see note 8)
Costs of inventories expensed
Auditors’ remuneration for auditing the accounts
of the Company
Auditors’ remuneration for other non-audit services:
■ Other services supplied pursuant to
such legislation
■ Other services related to taxation
■ All other services
Net foreign exchange (gains)/ losses
Year ended 30 June 2020
Year ended 30 June 2019
Group
370,589
571,074
478,553
514,106
185,376
5,781,866
-
45,000
-
2,500
8,975
(3,453)
399,307
-
1,036,163
613,861
190,308
5,648,905
-
47,500
-
2,500
8,975
24,546
7. Other Income
There are no unfulfilled conditions or other contingencies attaching to these grants. Other income reflects government grant income
received in the year in respect of the furlough scheme.
Group
Year ended 30 June 2020
Year ended 30 June 2019
£
73,041
£
-
Government grant income
8. Particulars Of Employees
Number of employees
The average number of people (including directors) employed by the Company during the financial period was:
Group
Company
Year ended
30 June 2020
Year ended
30 June 2019
Year ended
30 June 2020
Year ended
30 June 2019
54
62
48
53
62
GFINITY plc | Annual Report & Financial Statements 2020
The aggregate payroll costs of staff (including directors) were:
Wages and salaries
Social security costs
Pensions
Equity settled
transactions
Group
Company
Year ended 30 June
2020
Year ended 30 June
2019
Year ended 30 June
2020
Year ended 30 June
2019
3,762,138
449,154
70,000
1,500,573
4,081,674
474,358
42,871
1,050,002
3,403,736
420,354
68,873
1,500,573
3,723,272
445,557
41,744
1,050,002
5,781,866
5,648,905
5,393,536
5,260,575
Total remuneration for Directors during the year was £806,608 (2019: £1,347,307).
The board of directors comprise the only persons having authority and responsibility for planning, directing and controlling the activities
of the Group.
9. Finance Income/Costs
Interest income on bank deposits
Finance lease interest
Other interest cost
Year ended 30 June 2020
Year ended 30 June 2019
Group
£
2,622
(37,257)
-
£
6,481
-
(1,583)
63
GFINITY plc | Annual Report & Financial Statements 2020
10. Taxation
(a) Major components of taxation expense for the period ended 30 June 2020 are:
Year ended 30 June 2020
Year ended 30 June 2019
Group
£
(227,004)
(227,004)
(230,659)
(457,663)
£
-
-
(59,832)
(59,832)
Income statement
Current tax
Corporation tax charge / (credit)
Total current tax
Deferred tax
Relating to origination and reversal of temporary
differences
Taxation charge / (credit) reported in the income
statement
(b) Factors affecting tax charge for the period
A reconciliation of taxation expense applicable to accounting profit before taxation at the statutory tax rate of 19% (2019: 19%), to
taxation expense at the Company’s effective tax rate for the period is as follows:
Loss on ordinary activities before taxation
Profit / (Loss) multiplied by rate of tax
Effects of:
Expenses not deductible for tax purposes
Movement in unrecognised deferred tax arising
from tax losses
Movement in unrecognised deferred tax arising from
other temporary timing differences
Adjustment in respect of R&D tax credits
Taxation charge/ (credit) reported in the income
statement
Year ended 30 June 2020
Year ended 30 June 2019
Group
£
(8,182,970)
(1,554,764)
-
349,439
1,135,046
(160,379)
(227,004)
(457,663)
£
(12,054,190)
(2,290,296)
-
401,150
1,632,636
196,678
0
(59,832)
(c) Unrecognised deferred tax asset
The Group has an unrecognised deferred tax asset arising from
trading losses carried forward of £7,310,022 (2019: £6,174,976)
calculated at the substantively enacted Corporation tax rate at
the balance sheet date of 19% (2019: 19%). These trading losses
will reverse against future taxable trading profits and no asset has
been recognised due to uncertainties over the timing and nature
of such gains in accordance with IAS 12.
64
GFINITY plc | Annual Report & Financial Statements 2020
11. Property Plant and Equipment
Group Property Plant and Equipment
Office
equipment
Computer & production
equipment
Leasehold
Improvement
£
£
£
21,983
40,311
0
62,294
9,530
5,536
0
15,066
47,228
12,453
853,662
50,401
(1,847)
902,216
502,201
238,915
(273)
740,843
161,373
351,461
587,356
34,506
0
621,862
192,410
154,940
0
347,350
274,512
394,946
Cost
At 1 July 2018
Additions
Disposals
At 30 June 2019
Depreciation
At 1 July 2018
Charge for the period
Disposals
At 30 June 2019
Net book value
At 30 June 2019
At 30 June 2018
Group Property, Plant and Equipment Continued
Office
equipment
Computer & production
equipment
Leasehold
Improvement
£
£
£
Cost
At 1 July 2019
Additions
Disposals
At 30 June 2020
Depreciation
At 1 July 2019
Charge for the period
Disposals
At 30 June 2020
Net book value
At 30 June 2020
At 30 June 2019
62,294
849
0
63,143
15,066
14,776
0
29,842
33,301
47,228
902,216
87,362
0
989,578
740,843
177,229
0
918,074
71,504
161,373
621,862
12,701
0
634,563
347,350
178,731
0
526,081
108,482
274,512
Total
£
1,463,001
125,218
(1,847)
1,586,373
704,141
399,391
(273)
1,103,260
483,113
758,860
Total
£
1,586,372
100,912
0
1,687,284
1,103,259
370,736
0
1,473,995
213,289
483,113
65
GFINITY plc | Annual Report & Financial Statements 2020 Company Property, Plant and Equipment
Office
equipment
Computer & production
equipment
Leasehold
Improvement
£
£
£
Cost
At 1 July 2018
Additions
Disposals
At 30 June 2019
Depreciation
At 1 July 2018
Charge for the period
Disposals
At 30 June 2019
Net book value
At 30 June 2019
At 30 June 2018
13,017
37,877
0
50,894
6,968
5,536
0
12,504
38,390
6,049
Total
£
1,435,870
116,782
(1,797)
835,498
44,399
(1,797)
587,355
34,506
0
878,100
621,861
1,550,855
496,639
235,532
(273)
731,898
192,410
154,940
0
347,350
696,017
396,008
(273)
1,091,752
146,202
274,511
459,103
338,859
394,945
739,853
Company Property, Plant and Equipment continued
Office
equipment
Computer & production
equipment
Leasehold
Improvement
£
£
£
Cost
At 1 July 2019
Additions
Disposals
At 30 June 2020
Depreciation
At 1 July 2019
Charge for the period
Disposals
50,894
849
0
51,743
12,504
14,776
0
878,100
84,894
0
962,994
731,898
176,864
0
Total
£
1,550,855
98,444
0
621,861
12,701
0
634,562
1,649,299
347,350
178,731
0
1,091,752
370,371
0
At 30 June 2020
27,280
908,762
526,081
1,462,123
Net book value
At 30 June 2020
At 30 June 2019
66
24,463
38,390
54,232
146,202
108,481
274,511
187,176
459,103
GFINITY plc | Annual Report & Financial Statements 2020 12. Right Of Use Assets
The carrying value of right-of-use assets by class is:
Cost
At 30 June 2019
On adoption of IFRS 16
At 30 June 2020
Accumulated depreciation
At 30 June 2019
Charge for the year
At 30 June 2020
Net carrying amount
At 30 June 2020
At 30 June 2019
Transition and lease accounting under IFRS 16
Up to 30 June 2019, leases entered into by the company were
classified as either finance leases or operating leases under IAS
17. As a result of adopting IFRS 16, from 1 July 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 fixed lease payments less any lease incentives receivable.
Payments to be made under extension options that are reasonably
certain to be exercised are also included in the measurement of
the liability.
Lease payments are discounted using the company’s incremental
borrowing rate, being the rate that the company 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. The directors have
estimated this rate to be 5% per annum.
Lease payments are allocated between principal and finance
cost. The finance cost is charged to profit or loss over the lease
period so as 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 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.
Premises
£
–
999,379
999,379
–
571,074
571,074
428,305
–
Right-of-use assets are depreciated over the shorter of the asset’s
useful life and the lease term on a straight-line basis.
On transition, the company adopted the modified retrospective
approach permitted by IFRS 16. For leases classified as operating
leases under IAS 17 the company recognised right-of-use assets
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 30 June 2019.
As a result, the company has not restated comparative figures for
the year ended 30 June 2019 and no adjustment to the company’s
equity was required on transition.
On 1 July 2019, the date of transition to IFRS 16, the company
recognised a right-of-use asset in respect of its head office of
£999,379 as shown above. No subsequent additions were made
during the year. Depreciation of £571,074 was charged in the
year in respect of the head office. Cash outflows in respect of the
company’s leasing activities were £597,013.
67
GFINITY plc | Annual Report & Financial Statements 2020
13. Intangible Fixed Assets
Group Intangible Fixed Assets
Customer
Relationship
Real Sport
Web Platform
£
£
Gaming
Platform
£
Software
Development
£
Total
£
Cost
At 1 July 2018
Additions
1,198,661
935,518
281,383
148,750
2,564,312
-
-
-
-
-
At 30 June 2019
1,198,661
935,518
281,383
148,750
2,564,312
Amortisation
At 1 July 2018
Charge for the
period
Impairment
At 30 June 2019
Net book value
At 30 June 2019
At 30 June 2018
223,969
239,732
403,496
867,197
331,464
974,692
92,524
312,696
-
52,721
56,431
-
124,942
23,808
494,156
632,667
-
403,496
405,220
109,152
148,750
1,530,319
530,298
842,994
172,231
228,662
-
1,033,993
23,808
2,070,156
Customer
Relationship
Real Sport
Web Platform
CEVO
Gaming Platform
Assets Under
Construction
Software
Development
£
£
£
Cost
At 1 July 2019
1,198,661
935,518
281,383
£
-
Additions
Disposals
-
-
-
-
-
-
57,724
-
Total
£
£
148,750
2,564,312
-
-
57,724
-
At 30 June 2020
1,198,661
935,518
281,383
57,724
148,750
2,622,036
Amortisation
At 1 July 2019
Charge for the
period
Impairment
867,197
108,414
405,220
313,553
109,152
56,586
-
-
-
At 30 June 2020
975,611
718,773
165,738
-
-
-
-
148,750
1,530,319
-
-
478,553
-
148,750
2,008,872
Net book value
At 30 June 2020
223,050
216,745
115,645
57,724
At 30 June 2019
331,464
530,298
172,231
-
-
-
613,164
1,033,993
68
GFINITY plc | Annual Report & Financial Statements 2020
Cost
At 1 July 2018
Additions
At 30 June 2019
Amortisation
At 1 July 2018
Charge for the period
At 30 June 2019
Net book value
At 30 June 2019
At 30 June 2018
Cost
At 1 July 2019
Additions
At 30 June 2020
Amortisation
At 1 July 2019
At 30 June 2020
1,198,661
935,518
281,383
57,724
148,750
2,622,036
Charge for the period
867,197
108,414
405,220
313,553
109,152
56,586
148,750
1,530,319
478,553
At 30 June 2020
Net book value
At 30 June 2020
At 30 June 2019
Customer
Real Sport
CEVO
Relationship
Web Platform
Gaming Platform
Assets Under
Construction
Software
Development
At 1 July 2019
1,198,661
935,518
281,383
148,750
2,564,312
57,724
57,724
£
-
-
-
£
-
-
-
£
-
-
-
Cost
Additions
Disposals
Amortisation
At 1 July 2019
Charge for the
period
Impairment
Net book value
Total
£
-
-
613,164
1,033,993
£
-
-
-
-
-
-
£
-
-
-
-
-
-
-
Company Intangible Fixed Assets
Assets Under
Construction
Software Development
£
£
-
-
-
-
-
-
-
-
Total
£
148,750
-
148,750
124,942
23,808
148,750
148,750
-
148,750
124,942
23,808
148,750
-
-
23,808
23,808
Assets Under
Construction
£
-
57,724
57,724
-
-
-
57,724
-
Software Development
£
148,750
-
148,750
148,750
-
148,750
-
-
Total
£
148,750
57,724
206,474
148,750
-
148,750
57,724
-
At 30 June 2020
975,611
718,773
165,738
148,750
2,008,872
At 30 June 2020
223,050
216,745
115,645
57,724
At 30 June 2019
331,464
530,298
172,231
Software development costs refer to direct costs incurred in development of the Gfinity TV Player media player. The valuation of the
Real Sport web platform has been based on the cost to Gfinity of acquiring Real Sport’s traffic.
Assets under construction relate to costs incurred in the implementation of a new ERP system for the company.
69
GFINITY plc | Annual Report & Financial Statements 2020
14. Goodwill
Group
Cost
At 1 July 2019
Additions
At 30 June 2020
Impairment
At 1 July 2019
Charge for the period
At 30 June 2020
Net book value
At 30 June 2020
At 30 June 2019
Goodwill
£
2,544,526
-
2,544,526
-
-
-
2,544,526
2,544,526
The goodwill has arisen on the acquisitions of 100% of the share capital of CEVO Inc. and RealSM Ltd in the year ended 30 June
2018. The goodwill arising on the business combinations has been tested for impairment based on the methods outlined in note 3 on
accounting estimates and judgements. In both instances the test indicated there was no impairment of the goodwill.
70
GFINITY plc | Annual Report & Financial Statements 2020 15. Investment in subsidiaries
At 1 July
Investment in subsidiary
At 30 June
30 June 2020
£
4,466,133
-
4,466,133
Company
30 June 2019
£
4,466,133
-
4,466,133
The investments in subsidiaries represent the purchase of CEVO
and Real Sport on 24 July 2017 and 13 March 2018 respectively.
The fair value of consideration at acquisition for CEVO was
£2,158,498 for 100% of the share capital and the fair value at
acquisition of Real Sport was £2,307,634 for 100% of the share
capital. Both investments are held in Gfinity plc.
Subsidiary undertaking
Country of incorporation
Holding
Proportion of voting
rights and capital held
Nature of business
CEVO Inc.
USA
Ordinary shares
100%
IT Development and
Tournament and event
operator
RealSM Ltd
England
Ordinary Shares
100%
Online media
RealSM Ltd registered offices are The Foundry, 77 Fulham Palace Road,
London, United Kingdom, W6 8JB. CEVO’s registered address is 128
Maringo Rd, Ephrata, WA 98823
RealSM is exempt from the requirements of the Act relating to the
audit of individual accounts in accordance with 479A of the C.A. 2006.
71
GFINITY plc | Annual Report & Financial Statements 2020
16. Investment in Associates
Group
Company
30 June 2020
30 June 2019
30 June 2020
30 June 2019
£
-
308,214
(308,214)
-
-
£
264,464
727,487
(877,967)
(113,984)
-
£
-
308,214
(308,214)
-
-
£
264,464
727,487
(877,967)
(113,984)
-
At 1 July
Investment
Share of Losses
Impairment
At 30 June
The investment in associate relates to the acquisition of 33% of
the Esports Awards Limited on its incorporation in February 2017
and 30% of Gfinity Esports Australia on its incorporation in August
2017. During the period, Gfinity Esports Australia ceased trading.
As a result the carrying value of all investment into the entity has
been written off in full. Both investments are held in Gfinity plc
Associate undertaking
Country of
incorporation
Holding
Proportion of voting
rights and capital held
Nature of business
Esports Industry
Awards Ltd
Gfinity Esports Australia
PTY Limited
England
Australia
Ordinary shares
Ordinary Shares
33%
30%
Event Operator
Tournament and
event operator
Esports Awards LTD’s registered offices are Belfry House, Champions Way, Hendon, London, England, NW4 1PX.
The registered office of Gfinity Esports Australia is Suite 5, Level 1, 100 William Street, Sydney, NSW 2011.
72
GFINITY plc | Annual Report & Financial Statements 2020
17. Trade and Other Receivables
Group
Company
30 June 2020
30 June 2019
30 June 2020
30 June 2019
£
£
£
£
Trade receivables
Provision for doubtful debts
831,580
(250,110)
1,085,268
(110)
831,580
(250,110)
1,054,816
(110)
Other receivables
Amounts due from group
undertakings
Amounts due from related
undertakings
Prepayments and accrued
income
Amounts due in less than
one year
Amounts due from group
undertakings
Prepayments and accrued
income
581,470
1,085,158
581,470
1,054,706
308,495
-
-
374,058
-
51,214
308,495
-
-
374,058
-
51,214
501,367
710,933
448,095
647,321
1,391,332
2,221,364
1,338,060
2,127,299
-
-
-
1,505,740
1,532,050
101,015
-
101,015
Total
1,391,332
2,322,379
2,843,800
3,760,364
Amount due from group undertakings of £1,505,740 are considered to be due in more than one year (2019: £1,532,050) while
prepayments include a rental deposit of £101,015 that is viewed as recoverable at the expiration of the lease in 2021.
The directors consider that the carrying amount of trade and other receivables approximates to their fair value due to the short-term
nature of these financial assets.
73
GFINITY plc | Annual Report & Financial Statements 2020
18. Cash and Cash Equivalents
Cash at bank and in hand
Short term deposit
Group
Company
30 June 2020
30 June 2019
30 June 2020
30 June 2019
£
1,600,597
-
£
598,324
50,130
£
1,531,360
-
1,600,597
648,454
1,531,360
£
552,946
50,130
603,076
Cash at bank and in hand earns interest at floating rates based on daily bank deposit rates. The fair value of cash and cash equivalents
does not differ from the carrying value.
19. Trade and Other Payables
Trade payables
Other taxation and social
security
Accrued expenditure and
deferred revenue
Amounts owed to group
undertakings
Lease Liabilities
Group
Company
30 June 2020
30 June 2019
30 June 2020
30 June 2019
£
£
450,262
103,930
910,582
-
428,305
1,448,232
148,589
1,388,221
-
-
£
416,865
91,117
910,582
-
428,305
£
1,412,800
139,597
1,388,219
-
-
1,893,081
2,985,042
1,846,869
2,940,616
Trade and other payables principally comprise amounts outstanding for trade purchases and ongoing costs. The directors consider that
the carrying amount of trade payables approximates to their fair value due to their short-term nature.
74
GFINITY plc | Annual Report & Financial Statements 2020
20. Issued Capital
The Company has a single class of ordinary share with nominal
value of £0.001 each. Movements in the issued share capital of the
Company can be summarised as follows:
Issued and fully paid
As at 30 June 2018
Issued on 17 September 2018 at £0.1038
Issued on 9 November 2018 at £0.08
As at 30 June 2019
Issued on 31 July 2019 at £0.045
Issued on 2 April 2020 at £0.01
Issued on 21 April 2020 at £0.01
Issued between 22 April and 30 June 2020 at £0.01
As at 30 June 2020
Number
286,348,210
1,548,877
75,000,000
362,897,087
116,666,666
56,839,167
168,160,833
21,304,500
725,868,253
£
286,348
1,549
75,000
362,897
116,667
56,839
168,161
21,305
725,868
75
GFINITY plc | Annual Report & Financial Statements 2020 21. Earnings Per Share
Basic earnings per share is calculated by dividing the loss attributable to shareholders by the
weighted average number of ordinary shares in issue during the period.
IAS 33 requires presentation of diluted EPS when a Company could be called upon to issue shares
that would decrease earnings per share or increase the loss per share. For a loss making Company
with outstanding share options, net loss per share would be decreased by the exercise of options
and therefore the effect of options has been disregarded in the calculation of diluted EPS.
Group
Company
Year to 30 June 2020
Year to 30 June 2019
Year to 30 June 2020
Year to 30 June 2019
£
£
£
£
(7,731,424)
(12,098,698)
(7,493,221)
(9,970,720)
-
1,911
Number
000’s
Number
000’s
Number
000’s
Number
000’s
518,172
335,573
518,172
335,573
£
(0.01)
0.00
£
(0.04)
0.00
£
(0.01)
£
(0.03)
Loss attributable to
shareholders from
continuing operations
Profit attributable to
shareholders from
discontinued operations
Weighted average
number of ordinary
shares
Loss per ordinary share
for continuing operations
Profit per ordinary
share for discontinued
operations
76
GFINITY plc | Annual Report & Financial Statements 2020
22. Share Based Payments
Equity-settled share option plans
Options
The Company has a share option scheme for employees of the Group.
The tables below summarises the exercise terms of the various options over Ordinary shares of £0.001 each
which had been granted, and were still outstanding, as at 30 June 2020. A total of 47,075,621 were granted in
the year. No options were exercised during the year. A total of 28,344,836 were replaced with new option grants
in the year and 3,897,553 lapsed due to members of staff leaving. The total number of outstanding options in
issue at 30 June 2020 is 69,193,027 (2019: 54,359,795).
LTIP options
Shares Options as at 30 June 2018
Shares Options Granted
Share Options Forfeited
LTIP Share Options as at 30 June 2019
LTIP options
Shares Options as at 30 June 2019
Shares Options Granted
Share Options Replaced
Share Options Forfeited
LTIP Share Options as at 30 June 2020
Number
Weighted average exercise price
£
29,398,437
21,002,651
(3,541,293)
46,859,795
0.1549
0.1230
(0.1864)
0.1382
Number
Weighted average exercise price
46,859,795
47,075,621
(28,344,836)
(3,879,553)
61,693,027
£
0.1382
0.0125
(0.1267)
(0.1323)
0.0486
7777
GFINITY plc | Annual Report & Financial Statements 2020 Options for non-employee services
Non-market condition shares
Number
Weighted average exercise price
Shares Options as at 30 June 2019
Shares Options Granted
Share Options Lapsed
Share Options as at 30 June 2020
7,500,000
-
-
7,500,000
£
0.20
-
-
0.20
Options vest over periods defined in the respective option
agreements and at the discretion of the board of directors.
28,837,544 options vested during the year (2019: 10,726,129).
Of the options outstanding 20,000,000 (2019: 32,600,133) are
held by directors. Full details of all options held by directors are
contained within the Directors’ Remuneration Report.
The principal assumptions input into the Black Scholes model to
calculate the value of LTIP share options issued for compliance
with IFRS 2 “Share Based Payments” are included below, where
applicable.
Weighted average exercise price
Average expected life
Expected volatility of options
granted in year
Risk free rate
Expected dividend yield
Year ended 30 June 2020
Year ended 30 June 2019
£0.0125
1.0 years
81.01%
0.00%
0%
£0.1382
1.0 years
90.02%
1.11%
0%
All options were granted at an exercise price equivalent to the
market price at the date of grant. The weighted average exercise
price of LTIP options outstanding at 30 June 2020 was £0.0486
(2019: £0.1382). The weighted average fair value of options issued
during the period was £0.0125 (2019: £0.1230).
The average expected life is based on directors’ best estimate
taking into account the vesting conditions of the options.
Expected volatility has been calculated with reference to the
actual volatility of the share price since over the year prior to the
date of grant.
The fair value of the non-employee services options has been
based on the fair value of the services provided at the date the
services were provided. This equates to a fair value of options
issued in the year £nil (2019: £nil).
All options are held in Gfinity plc with no options held over any of
the subsidiaries
78
GFINITY plc | Annual Report & Financial Statements 2020
23. Warrants
The Company has granted warrants over Ordinary Shares as outlined in the table below.
Number
Weighted average exercise price
Warrants
Warrants as at 30 June 2019
Warrants granted
Warrants exercised
Warrants lapsed/ forfeited
Warrants as at 30 June 2020
-
225,000,000
(21,304,500)
-
203,695,500
£
-
0.01
0.01
-
0.01
225,000,000 Warrants were granted on completion of the fundraise on 21 April 2020. This figure represented one warrant per ordinary
share acquired as part of the fundraise at an exercise price equal to that at which shares were acquired in the fundraise. All warrants are
non-transferrable and have an exercise period of 18 months from the date of issue.
The fair value of warrants was calculated according to the Black Scholes model, however, no adjustment has been recognised in respect
of the warrants, as directors consider this amount to be immaterial.
79
GFINITY plc | Annual Report & Financial Statements 2020 24. Related Party Transactions
The Directors Remuneration Report provides details of share options issued to certain directors in the period. Further information on
share options are provided in Note 21. In addition to the share options granted in the year, the directors also participated in share
placings as outlined in the table below. All shares subscribed for by directors were at the same price and under the same conditions as
all other participants in the placings:
July 2019 placing at 4.5p
per ordinary share
April 2020 placing at 1p
per ordinary share
Garry Cook
Graham Wallace
John Clarke
Jonathan Hall
Preeti Mardia
333,334
222,222
222,222
222,222
111,112
n/a
n/a
500,000
500,000
-
Transactions with Group subsidiaries in the year:
CEVO: There was a management recharge from Gfinity to CEVO
of £95,767 (2019: nil) and a recharge from CEVO to Gfinity for
technology services of £719,953 (2019: nil). There were also cash
advances to and expenses paid on behalf of CEVO by Gfinity
of £440,200 (2019: £476,208). At the balance sheet date the
intercompany loan due to Gfinity from CEVO was £528,481 (2019:
£712,467).
Real Sport: There were cash advances to and expenses paid on
behalf of Real Sport by Gfinity of £157,677 (2019: £471,740). At
the balance sheet date the intercompany loan due to Gfinity from
Real Sport was £977,260 (2019: £819,583).
There was no revenue from transactions with associates in the year
(2019: £98,600 from the Esports Awards Ltd and £379,848 with
Gfinity Australia). At year end £51,214 remained outstanding from
the Esports Awards Ltd.
25. Leases Commitments (IAS 17)
As of 30 June 2019, the Group and Company had commitments under non-cancellable operating leases (as
defined by IAS 17 Leases) as follows:
Land and Buildings
Group
Company
Year ended 30 June 2019
Year ended 30 June 2019
£
856,368
447,759
1,304,127
£
856,368
447,759
1,304,127
Within one year
In the second to fifth years
Total
From 1 July 2019, the company has recognised right-of-use assets for these leases in line with the requirements of IFRS 16 Leases, and
liabilities relating to leases are included in trade and other payables (note 18).
80
GFINITY plc | Annual Report & Financial Statements 2020 26. Notes To The Cash Flow Statement
Share of Associate Losses
308,214
Group
Company
30 June 2020
30 June 2019
30 June 2020
30 June 2019
(7,725,307)
(12,056,151)
(7,720,225)
(9,971,259)
370,589
399,307
571,074
478,553
(2,622)
39,768
1,500,573
-
-
-
-
-
-
-
1,036,163
(6,481)
-
1,050,002
(166,504)
991,951
(420,232)
-
28,295
-
-
370,371
571,074
-
(2,622)
39,768
1,500,573
-
308,214
-
-
-
-
-
396,008
-
23,807
(6,481)
-
1,050,002
(166,504)
991,951
(420,232)
(49,999)
28,295
-
-
1,158,051
(191,435)
1,143,568
(350,307)
(1,531,582)
710,028
(1,533,368)
736,244
-
153,539
(457,663)
-
-
-
-
153,539
-
(5,290,351)
(8,470,887)
(5,322,647)
(7,579,304)
Cash flows from
operating activities
Loss before taxation
Adjustments for:
Depreciation of property,
plant and equipment
Depreciation on Right of
Use assets
Amortisation & impairment
of intangible fixed assets
Interest Received
Interest Payable
Share based payments
Fair Value Adjustment on
Deferred Consideration
Revenue Settled Via Equity
Gain on disposal of
subsidiary
Bad Debt Charge
Gain on disposal of
discontinued operations
Changes in working
capital:
Decrease/(Increase) in
Inventories
(Increase)/ decrease
in trade and other
receivables
Increase in trade and
other payables*
Corporation tax (paid)/
R&D credits received
Taxation Charge
Cash used by operating
activities
Interest paid
-
-
-
-
Net cash used by
operating activities
(5,290,351)
(8,470,887)
(5,322,647)
(7,579,304)
81
GFINITY plc | Annual Report & Financial Statements 2020
27. Financial Instruments And Risk Management
Credit risk
The Company uses a limited number of financial instruments,
comprising cash, short-term deposits, and various items such
as trade receivables and payables, which arise directly from
operations. The Company does not trade in financial instruments.
All of the Company’s financial instruments are measured at
amortised cost
The Company’s principal financial assets are bank balances and
cash, trade and other receivables.
Bank balances and cash are held by banks with high credit ratings
assigned by independent credit rating agencies. Management is
of the opinion that cash balances do not represent a significant
credit risk.
The Company’s activities expose it to a variety of financial risks:
market risk (including currency risk and interest rate risk), credit risk
and liquidity risk.
As the Group does not hold security against trade and other
receivables, its credit risk exposure is as follows:
Group
Company
30 June 2020
30 June 2019
30 June 2020
30 June 2019
£
£
£
£
1,146,912
1,243,834
2,599,380
2,745,432
The trade receivables balance represents amounts due from third
parties. At the balance sheet date, the Group’s trade receivables
totalled £831,580 less a provision of £250,110 (2019: £1,085,268
less a provision of £110). The Company’s receivables include
£1,505,740 of inter-company funding (2019: £1,532,050). The
Company’s trade receivables totalled £831,580 less a provision for
doubtful debt of £250,110 (2019: £1,054,816 less a provision for
doubtful debt of £110).
There are no significant overdue but not impaired trade
receivables at the balance sheet date. The Company balance
sheet includes inter-company receivables which are not
considered to be at risk as the Company retains control over the
debtor however it is not anticipated that the Group companies will
repay these amounts in the next 12 months.
At the balance sheet date an amount of £285,437 was due from
one customer representing a concentration of credit risk. This
amount has been recovered in full since the balance sheet date.
Liquidity risk
All trade and other payables are due for settlement within one
year of the balance sheet date. The use of instant access deposits
ensures sufficient working capital is available at all times.
Foreign exchange risk
The Company operates in overseas markets by selling directly
from the UK, owns an overseas subsidiary and reports in GBP. It is
therefore subject to currency exposures on transactions while the
Group is subject to currency exposures on consolidation of the
overseas subsidiary.
Financial instruments held by the Company and their carrying
values were as follows
82
GFINITY plc | Annual Report & Financial Statements 2020 Group
June 2020
GBP (£)
USD ($)
990,979
882,474
102,661
1,525,657
(1,861,075)
80,783
316,422
(102,803)
-
-
June 2019
GBP (£)
441,582
354,674
399,288
(1,367,280)
-
USD ($)
0
65,890
92,689
(39,588)
-
118,991
758,223
1,176,876
(171,736)
Company
June 2020
USD ($)
GBP (£)
USD ($)
June 2019
GBP (£)
441,582
-
-
31,645
-
-
990,979
843,801
1,505,740
102,661
1,505,775
(1,846,869)
-
1,532,050
265,100
(86,079)
354,674
394,324
(1,345,017)
-
-
-
31,645
2,258,286
1,022,822
1,377,613
Trade and other
receivables
Accrued income
Cash
Trade and other
payables
Derivative Financial
Instruments
Net Current Assets/
Liabilities
Trade and other
receivables
Amounts due from
Group Undertakings
Accrued income
Cash
Trade and other
payables
Derivative Financial
Instruments
Net Current Assets/
Liabilities
Financial liabilities included in the balance sheet relate to the IAS
39 category of other financial liabilities held at amortised cost.
As cash is held at floating interest rates, its carrying value
approximates to fair value.
Assets relate to loans and receivables with the exception of other
receivables and prepayments which are classified as non-financial
assets.
Fair value estimation
The aggregate fair values of all financial assets and liabilities are
consistent with their carrying values due to the relatively short-
term maturity of these financial instruments.
Capital management
The Company is funded entirely through shareholders’ funds.
If financing is required, the Board will consider whether debt or
equity financing is more appropriate and proceed accordingly.
The Company is not subject to any externally imposed capital
requirements.
83
GFINITY plc | Annual Report & Financial Statements 2020
28. Deferred tax
Group
At 1 July
Acquisition of subsidiary
Credited to profit or loss
At 30 June
The provision for deferred taxation is made up as follows:
Temporary timing differences on
intangible assets
2020
£
(322,718)
-
230,659
(92,059)
2020
£
92,059
92,059
2019
£
(366,245)
-
43,526
(322,718)
2019
£
322, 719
322,719
84
GFINITY plc | Annual Report & Financial Statements 2020
29. Discontinued operations
Profit on sale of subsidiary
Consideration received or receivable:
Cash
Total disposal consideration
Carrying amount of net assets sold
Gain on sale before income tax
Tax expense on gain
Gain on sale after income tax
Losses of Subsidiary in the year
Revenue
Cost of Sales
Gross Profit / (Loss)
Administrative Expenses
Profit / (Loss)
1 July 2019
to 30 June 2020
1 July 2018
to 30 June 2019
-
-
-
-
-
-
45,000
45,000
(37,982)
82,982
(15,767)
67,215
1 July 2019
to 30 June 2020
1 July 2018
to 30 June 2019
-
-
-
-
-
-
(17,914)
(17,914)
(47,389)
(65,303)
85
GFINITY plc | Annual Report & Financial Statements 2020 APPENDIX
Image Credits
Photographer
Joe Brady
Photographer
Torrin Holland
Photographer
Susie Fisher
86
Page Credit
Cover Image 1
Cover Image 2
Cover Image 3
Cover Image 4
Page 2
Page 7
Page 11
Page 16
Page 21
Page 31
Page 38
Page Credit
Page 9
Page 24
Page Credit
Page 32
GFINITY plc | Annual Report & Financial Statements 2020 87
GFINITY plc | Annual Report & Financial Statements 2020 35 New Bridge Street,
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EC4V 6BW
gfinityplc.com
88
GFINITY plc | Annual Report & Financial Statements 2020