3
Contents
Page
Chairman’s statement
4
Chief Executive’s statement
7
Risks and uncertainties
14
Corporate and social responsibility statement
18
Corporate governance
20
Audit committee report
25
Remuneration committee report
26
Directors’ report
28
Directors’ responsibilities statement
31
Independent auditor’s report
32
Consolidated statement of comprehensive income
38
Consolidated statement of changes in equity
40
Consolidated statement of financial position
41
Consolidated statement of cash flows
42
Notes forming part of the consolidated financial statements
45
Company statement of financial position
78
Company statement of changes in equity
79
Company statement of cash flows
80
Notes forming part of Company financial statements
81
Advisors
86
IMMOTION
GROUP PLC
ANNUAL REPORT
AND ACCOUNTS
FOR THE YEAR ENDED
31 DECEMBER 2021
Immotion
Group plc
Annual Report
& Accounts 2021
Chairman’s Statement
The second half of 2021
turned out to be one of
recovery and progress,
particularly for LBE, at
a much faster rate than
we anticipated.
Little more than a year ago the Company, along with
many others, was suffering from declining or zero
revenue as Covid-19, having caused the lockdown of
many of the partner sites through which our core
Location Based Entertainment (LBE) business functioned,
continued its seemingly unstoppable advance. The name
of the game became survival via cost cutting, seeking
all available government support and a decision to go
direct to our audience with the Let’s Explore product and
the related formation of our Home Based Entertainment
(HBE) division.
As the Chief Executive describes in his review, the second
half of 2021 turned out to be one of recovery and progress,
particularly for LBE, at a much faster rate than we
anticipated, as sites reopened and confidence returned,
providing further opportunities to launch new sites at
aquariums and now zoos. This, particularly in the United
States, boosted our confidence in the potential of this
part of our business as illustrated by very strong revenue
and contribution growth to match.
It has also made us reconsider our strategy relating to our
other two businesses, HBE and Uvisan, and we have come
to the conclusion that we need to focus all our resources
on LBE which has a strong pipeline.
We therefore intend to spin out HBE and Uvisan in the
short term to enable us to be fully focused on LBE as
we are confident that this compelling business model
is highly scalable and can drive superior shareholder
returns.
Sir Robin Miller
Chairman, 25 April 2022
S I R R O B I N M I L L E R
C H A I R M A N , 2 5 A P R I L 2 0 2 2
5
Immotion
Group plc
Annual Report
& Accounts 2021
Chief Executive’s Report
7
A year
of recovery
and progress
for the Group.
M A R T I N H I G G I N S O N
C H I E F E X E C U T I V E O F F I C E R ,
2 5 A P R I L 2 0 2 2
Overview
2021 was a year of recovery and progress. The Group’s
core LBE business recovered well despite conditions
remaining challenging in the first half, particularly in Q1,
as Covid-19 related closures and disruption continued.
H2 2021 saw a return to more normal trading conditions,
as the majority of our LBE sites were reopened,
restrictions at partner sites were eased, and attendances
recovered towards pre-Covid levels. Overall, we were
extremely pleased to be back in business with solid
revenue performance, although we remained cautious
when it came to expanding our core LBE estate as we
sought to consolidate our finances and develop greater
confidence in the market recovery.
As we ended the year, it was clear the LBE business had
not only recovered, but was flourishing. This recovery,
combined with increased demand from potential
partner locations, has forced us to review our operations,
allocation of resources and how we can best deliver
maximum shareholder value.
Whilst we rightly took the decision in the middle of the
Covid pandemic to launch two new businesses, HBE
and Uvisan, as a way of hedging our position, we have
decided it is in the best interest of our shareholders that
we allocate all our resources to the LBE business. We
believe this will maximise returns, and therefore we will
be looking to spin out HBE and Uvisan, seeking external
investment for both.
Outcome
The landscape continued to be challenging in 2021,
although significantly less so than the previous year, and
I am pleased to report overall Group revenue was £9.4m
(2020: £2.8m), with adjusted positive EBITDA of £0.9m, a
significant improvement on 2020, where we were in the
throes of the pandemic and suffered a negative adjusted
EBITDA of £1.7m. The split of revenue and EBITDA for 2021
was as follows:
Further details of divisional performance are discussed in the Review of Operations overleaf.
1 Adjusted EBITDA stated before depreciation, amortisation, impairment, share based payments and other one-off costs and income.
LBE
HBE
Uvisan
Head Office
Total
£m
£m
£m
£m
£m
Revenue
6.3
2.5
0.5
0.1
9.4
Adjusted EBITDA1
2.3
(0.4)
0.1
(1.0)
0.9
Immotion
Group plc
Annual Report
& Accounts 2021
Chief Executive’s Report
As our refocused business builds a track record of
profitability and operating cash flow generation we can
fund our plans by reinvesting the cash generated in order
to further expand the business.
2022 has begun in a very promising fashion with Q1 Group
revenue of £2.1m (2020: £0.8m). LBE revenue has tripled
to £1.8m versus £0.6m in the same period in 2020. The
growth in LBE revenues is continuing and, with a buoyant
Easter period, we expect April LBE revenues to exceed
£800k.
We are at a very advanced stage for the signing of
our first major zoo installation which we expect to be
this week, with an agreement for another large zoo
installation in the USA also imminent.
We are also developing a new ‘plug and play’ solution for
zoos; a containerised solution that can be delivered to site
with minimum setup required. This will be particularly
useful for many zoo sites that do not have available indoor
space. We will look for a trial later in the year with a view
to finessing and being ready to scale this additional
model in 2023.
The combination of large purpose-built theatre solutions,
including pre-show experiences, along with a modular
solution and our existing mini theatre offering will allow
us to address all potential partner opportunities and
choose the appropriate model for each partner site.
Since the period end, we have added significantly to the
portfolio in the first quarter including the expansion of
some of our best performing sites: taking our installation
at Shark Reef Aquarium at Mandalay Bay from 36
headsets to 48 headsets (along with a contract extension
to 31 January 2024); and doubling our capacity at both
Sea Life London (under a new three year contract) and
Odysea Aquarium. These sites are illustrative of our future
direction – larger installations which represent significant
new key attractions for our partners, in high traffic,
established destinations, driving significant revenue for
both parties.
We believe that there remains significant potential in the
aquarium sector, as we have seen by the scaling up of a
number of our existing sites, as well as the active pipeline
of new sites with new partners.
The combination of ‘on message’ proprietary content,
immersive motion platform technology, and locations
that deliver large and predictable footfall underpins our
belief that we can achieve very significant enhancement
in shareholder value moving forwards.
Naturally, uncertainties remain, not least the appalling
situation in Ukraine, but it now feels like a wholly different
trading picture compared to the same period last year.
Outlook
The Board’s focus is now about driving growth of Group revenue and profit based on the following pillars of growth:
•
Focus on core LBE business: Given renewed confidence and growth prospects.
•
Uninterrupted trading position: Trading in 2021 was impacted by lockdowns and capacity restrictions affecting
certain locations. We do not anticipate any further disruption in our key markets and we expect 2022 to be our first
full year of trading without capacity restrictions at our Mandalay Bay site.
•
Expansion of key locations: We have expanded capacity at some of our best performing locations:
•
Shark Reef at Mandalay Bay, Las Vegas, USA
•
Sea Life London, UK
•
Odysea Aquarium, Arizona, USA
•
Additional new sites: We have a strong pipeline of new sites.
•
Operational gearing: With a fixed cost base that we do not believe will increase proportionately
with revenue, every new site’s contribution flows straight to the bottom line.
9
Review of Group Operations
Location Based Entertainment
Our LBE division recovered strongly in H2 of 2021 but the
first half, and in particular Q1 2021, was heavily impacted
by the Covid-19 pandemic. H1 revenue was £2.3m, an
increase of 186% versus 2020 (£0.8m) and H1 divisional
adjusted EBITDA was £0.9m (2020: £0.5m negative).
The second half saw much more normalised trading
conditions, as can be seen from the table below:
We installed 62 headsets across seven new sites in 2021, and 43 headsets were removed from predominantly
underperforming sites for redeployment elsewhere, giving us a net increase of 19 headsets during the period and taking
us to 364 installed headsets by the period end (302 in our partner estate and 62 in our ImmotionVR sites). These numbers
reflect our cautious view of capital expenditure and also the initial focus of prospective partners on their own re-openings
and recovery.
We currently have 402 headsets in operation (338 partner and 64 ImmotionVR) across 49 sites as shown in the table below:
Notes: LBE revenue is the total charged to consumers (excluding VAT and sales taxes). Gross profit is revenue charged to consumers (net of VAT or sales taxes),
less partners’ shares of revenue and other direct costs of delivering revenue. Overhead includes direct and apportioned overhead and excludes Head Office
(unallocated) overheads.
2 Adjusted EBITDA stated before depreciation, amortisation, impairment, share based payments and other one-off costs and income.
H1 2021
H2 2021
FY 2021
H1 2020
H2 2020
FY 2020
£000
£000
£000
£000
£000
£000
Revenue
2,302
4,001
6,303
806
1,269
2,075
Gross profit
1,000
1,769
2,769
70
259
329
Overhead
(439)
(473)
(912)
(617)
(681)
(1,298)
Other income
313
135
448
-
484
484
EBITDA2
874
1,431
2,305
(547)
62
(485)
USA
UK
ROW
TOTAL
As at 1 January 2021
Headsets
163
121
61
345
Sites
24
14
10
48
Net changes in 2021
Headsets
41
(16)
(6)
19
Sites
2
(1)
(1)
0
As at 31 December 2021
Headsets
204
105
55
364
Sites
26
13
9
48
Net changes 2022
Headsets
28
10
0
38
Sites
1
0
0
1
As at 26 April 2022
Headsets
232
115
55
402
Sites
27
13
9
49
Immotion
Group plc
Annual Report
& Accounts 2021
Chief Executive’s Report
11
Home Based Entertainment
During the year progress was made in the HBE business.
A distribution partnership was established in Australia,
as well as direct to Amazon relationships in both the USA
and Canada, to add to the already existing UK setup. Third
party distribution centres were opened in the USA and
Hong Kong allowing us to supply goods directly to North
American and Asia Pacific customers.
Whilst sales increased to £2.5m the business was severely
impacted by the global logistical problems resulting on
occasion in much of the stock either being stuck at port
or having to be air freighted at a significant cost to the
business. We took the decision that we needed to turn
bought stock into cash, but we also recognised there was
a significant impact on the margin in doing so.
With the vast majority of stock sold during the period
the team turned their attention to future years and how
to grow the market. The idea of Vodiac arose following
feedback from Let’s Explore customers. In the main they
wanted to see more content, and a more user-friendly
menu system.
Vodiac was ‘beta’ launched earlier this year. Initial
feedback showed the need for an even greater library of
content, as well as the need for the VR menu system to
be fully operational whilst wearing the VR headset.
The concept of delivering a VR video streaming solution,
combined with an affordable VR headset is a “big idea”
and as such we accept if this business is to fulfil its
ambitions it may be loss making for some time and is
likely to consume significant capital. We have therefore
taken the view that it is not appropriate to embark on this
using Immotion’s balance sheet.
Uvisan
Uvisan made good progress in its first full year of
trading. Revenue increased by 669 per cent to £477,000
(2020: £62,000). A small divisional profit of £67,000 was
reported (2020: loss of £6,000).
In 2021, the business was focused on the sale of UVC
sanitising cabinets (three size options) through our
growing network of resellers and distributors, as well as
direct. Notably, we signed our first distributor in the USA
and one that covers both Australia and New Zealand.
We delayed the launch of Cleanroom, our room and
surface sanitising system, whilst we put the finishing
touches to our proprietary control system and app. We
believe it has application in settings (both new build
and retrofit) where hygiene is key - such as hospitals,
laboratories and cleanroom manufacturing/engineering.
We are also looking at its potential application for
pathogen control in indoor farming facilities.
Whilst Uvisan made a promising start in 2022 having
completed its first major customer delivery in the USA it
will also require capital for growth, as such this too should
not be done using Immotion’s balance sheet.
The partner portfolio performed well with overall weekly average revenue per headset of £4413 compared to £3294 in 2020.
Average revenue per headset per week at our ImmotionVR sites was £284 in 2021 compared to £175 in 2020.
3 The average revenue per headset per week of £441 ignores one partner site which had a large
number of headsets installed from remnant stock which would not otherwise have been used.
4 The average revenue per headset per week of £329 ignores one partner site which had a large
number of headsets installed from remnant stock which would not otherwise have been used.
£441
£284
AVERAGE REVENUE
PER HEADSET PER WEEK
PARTNER PORTFOLIO
AVERAGE REVENUE
PER HEADSET PER WEEK
IMMOTIONVR SITES
Immotion
Group plc
Annual Report
& Accounts 2021
Chief Executive’s Report
The Group made gross profit in the period of £3,196,000
(2020: £466,000), a gross profit margin of 34.0% (2020:
16.4%).
The Group benefited from other income of £532,000
in the period (2020: £575,000), £503,000 of which came
from Covid-19 government support packages (2020:
£479,000) and £29,000 being sublease rents (2020:
£96,000). Government support in the period included
£235,000 relating to the forgiveness of both the 2020
and 2021 Paycheck Protection Program loans in the
USA and £206,000 received under the UK government’s
Coronavirus Job Retention Scheme.
Despite the significant growth in revenue, administrative
expenses (excluding depreciation, amortisation,
impairment, share based payments and one-off items)
remained relatively flat at £2,820,000 (2020: £2,731,000).
The Group achieved a full year positive adjusted EBITDA5
result for the first time since its inception of £908,000
(2020: £1,690,000 negative).
The Group’s loss after tax reduced to £1,999,000 (2020:
£4,732,000). The adjusted loss6 per share was 0.28p (2020:
1.17p).
The overall cash outflow in the period was £565,000 (2020:
inflow of £1,190,000). The distinction between H1 and
H2 trading illustrated above can also been seen in the
cash flows for the respective periods with strong cash
generated from operations in the second half, as shown in
the table to the right:
Financial review
Revenue for the year increased 230% to £9,391,000 (2020: £2,848,000). The Group’s H1 revenue was suppressed by
Covid-19, with no revenue coming from its UK operations until leisure businesses were able to reopen on 17 May 2021. The
table below shows the split of revenue between H1 and H2, and by segment:
H1 2021
H2 2021
FY 2021
£000
£000
£000
LBE
2,302
4,001
6,303
HBE
337
2,189
2,526
Uvisan
88
389
477
Other (inc licensing)
33
52
85
Total
2,760
6,631
9,391
5 Adjusted EBITDA stated before depreciation, amortisation, impairment, share based payments and other one-off costs and income.
6 Adjusted loss is the loss after taxation, adjusted for share based payments, impairment charges and one-off costs and income.
13
Conclusion
Overall, we are satisfied with the progress we’ve made.
The second half of 2021 underpinned our belief in the core
LBE business, with 2022 to date providing further support
for our decision to focus solely on this business as we
move forward. We are seeing high levels of engagement
from prospective partners, and with the new ‘plug and
play’ solution in the wings we are confident we will have
the tools at our disposal to continue a significant and
rapid roll out of partner solutions.
2022 has got off to a great start with very strong Easter
trading. This combined with a strong pipeline of new
partner sites and the summer season ahead of us gives
the Board considerable confidence in the business and
its future.
Martin Higginson
Chief Executive Officer
25 April 2022
2 Adjusted EBITDA stated before depreciation, amortisation, impairment, share based payments and other one-off costs and income.
H1 2021
H2 2021
FY 2021
£000
£000
£000
Opening cash
1,664
629
1,664
Operating activities
(847)
1,139
292
Investing activities
(278)
(539)
(817)
Financing activities
90
(130)
(40)
Closing cash
629
1,099
1,099
The operating cash inflow of £292,000 (2020: £2,012,000
outflow) was net of a working capital outflow of £725,000
(2020: £192,000 outflow). This was primarily driven by
a £989,000 increase in trade and other receivables
(including prepayments and accrued income), which
itself resulted from the low levels of trading activity at year
end 2020. This was partially offset by inflows of £49,000
and £215,000 in respect of inventories and trade and other
payables (including deferred income) respectively.
Investing cash outflows reduced to £817,000 (2020:
£1,393,000 outflow), largely a result of a cautious approach
to capital expenditure in the period and the deployment
of hardware which had been acquired prior to Covid-19.
The Group had a net financing cash outflow of £40,000
(2020: £4,595,000 inflow). During the year, the Group
received net equity proceeds from an existing investor
of £285,000 and received a Second Draw Paycheck
Protection Program loan of £119,000. Loan and lease
repayments (including rents payable under IFRS 16 leases)
were £405,000.
Net assets at the balance sheet date were £5,720,000
(2020: £6,714,000).
The second half of 2021
underpinned our belief
in the core LBE business,
with 2022 to date providing
further support for our
decision to focus solely
on this business as we
move forward.
Immotion
Group plc
Annual Report
& Accounts 2021
Risks and Uncertainties
CREATE
MITIGATION
STRATEGY
IDENTIFY
RISK
ASSESS
IMPACT OF
RISK
REVIEW
AND
EVALUATE
1
3
2
4
The Group has a Risk Committee to identify and monitor
risks which could threaten the Group’s operations. The
Risk Committee meets at least once each year and is
comprised of the Audit Committee and the Finance
Director.
The Risk Committee has the power to call on Executive
Directors and senior management for the purposes of
seeking information as well as making recommendations.
The Group’s process for managing risks is as follows:
The risks are those which the Board considers, as at the date of this report, are the most critical to the continued
operation of the Group. The risks described do not represent the totality of the risks facing the Group and should not be
relied on as such by any person considering any investment decision in relation to the Company’s ordinary shares.
15
Risk
Potential Impact
Mitigation and Control
Impact of COVID-19 (and
future pandemics)
COVID-19 had a material impact on
the Group’s LBE business during
the lockdowns of 2020 and 2021.
Whilst it seems that the worst of
COVID-19 is behind us, the risk of
future lockdowns or social distancing
measures in relation to COVID-19 or a
future pandemic of similar or greater
proportions cannot be ruled-out.
The LBE business was significantly
disrupted during the COVID-19
lockdowns and restrictions.
Should there be a widespread
resurgence of COVID-19, further
disruption to the business cannot be
ruled out.
The geographical spread of the
Group’s partner sites should act as a
mitigant against localised outbreaks.
Uvisan products developed by
the Group are deployed in high
throughput partner locations to
allow fast disinfection of VR headsets
between uses.
Supply chain issues
The Group experienced challenges
in 2021 resulting from supply chain
pressures. This led to increased costs
and longer lead times which impacted
all three of the Group’s divisions.
The Group plans as far ahead as
practical when arranging shipping in
an attempt to secure the best possible
rates.
The Group has taken steps to amass
buffer stock of key hardware where
feasible in order to protect it against
supply chain shocks
Failure to deliver the
Group’s strategy
Failure to deliver the Group’s strategy
may have an adverse impact on
its business, financial and other
conditions, profitability and results of
operations. There can be no assurance
that the Group will be able to maintain
or grow its financial performance to
anticipated future levels.
The Group has regular Board
meetings as well as constant
communication with senior
management to monitor and refine
progress against its targets.
Weekly KPIs are distributed to senior
management to enable them to
monitor performance.
Immotion
Group plc
Annual Report
& Accounts 2021
Risks and Uncertainties
Risk
Potential Impact
Mitigation and Control
Technological advances
within the industry
There is a risk that the technologies
adopted by the Group could become
obsolete or uncompetitive which
could have a material adverse
impact on its prospects. Additionally,
advances in hardware may require
the Group to incur additional capital
expenditure that is not currently
foreseen, which could have an adverse
material impact on the cash position
of the Group, and potentially trigger
the requirement for further capital.
Industry trends are monitored, and
new hardware is purchased and
tested to ensure the Group’s offerings
remain relevant.
Competition
The Group may be challenged by
new or incumbent competitors
(which could include well resourced,
international players in the
entertainment industry) which, in
comparison with the Group, have
greater market presence or brand
recognition, access to more popular
and/or engaging content, superior
financial resources, economies of scale
or lower cost bases, or the ability to
withstand or respond more swiftly to
changes in market conditions.
It is the Group’s intent to create
barriers to entry in the in the following
ways:
(i) by building up an install base of
Immotion hardware on long term
contracts with high quality partners;
(ii) by offering hardware and VR
experiences which are amongst the
best and most relevant in the market;
and
(iii) through the provision of hardware
and experiences at no up-front cost to
partners.
Cash requirement
The Group’s partnership model and
content creation require capital
expenditure in advance of revenue
generation.
Cash forecasts are maintained and
regularly updated.
The Group endeavours to allocate
resources into opportunities which
give the most effective payback.
The Group aims to support its cash
flow with debt financing where
practical.
Industry trends are monitored,
and new hardware is purchased
and tested to ensure the Group’s
offerings remain relevant.
17
Risk
Potential Impact
Mitigation and Control
Foreign exchange
movements
The Group has certain contracts
priced in foreign currencies and also
has employees and operations based
overseas paid in foreign currencies. It
is therefore exposed to the risk that
adverse exchange rate movements
could cause its contribution from
those territories to be reduced (relative
to its reporting currency) resulting in
reduced profitability for the Group.
The Group also procures VR hardware
US dollars. There is a risk that the
costs of such equipment increases
against the Group on a Sterling basis.
The Group has foreign currency
accounts which it uses to hold funds
in Sterling, US Dollars and other
currencies generated from operations
and settle liabilities denominated in
those currencies.
The Group does not use speculative
financial instruments to hedge
against potential currency loss.
Martin Higginson
Chief Executive Officer
25 April 2022
Immotion
Group plc
Annual Report
& Accounts 2021
Corporate and Social Responsibility Report
Stakeholder
Why we engage
How we engage
Our shareholders
We maintain and value regular dialogue
with our shareholders throughout the
year and place great importance on our
relationship with them. We know that
our investors expect a comprehensive
insight into the financial performance
of the Group, and awareness of long-
term strategy and direction. As such,
we aim to provide high levels of
transparency and clarity of our results
and long-term strategy and to build
trust in our future plans.
• Annual Report
• Company website
• Shareholder circulars
• AGM
• RNS announcements
• Press releases
• We have commissioned regular
shareholder register analysis to
enable us to monitor changes to the
shareholder base
Below are a number of the approaches through which this is achieved.
Business Conduct, Ethics and Anti-Corruption
It is the Group’s policy to conduct business in an honest
way and without the use of corrupt practices or acts of
bribery to obtain an unfair advantage.
The Group operates an Anti-Bribery and Anti-Corruption
Policy which is given to all staff. The Group has a zero-
tolerance approach to bribery and corruption and any
breach of the policy results in disciplinary action which
may include dismissal.
Health & Safety
The safety of staff and customers at our ImmotionVR
experience centres and at our partners’ sites is of
paramount importance. The Group conducts regular
audits of its ImmotionVR sites with a significant focus on
health & safety practices.
The Group has deployed its Uvisan UVC cleansing units
at certain high throughput partner sites to sterilise VR
headsets between uses.
Relationship with Stakeholders
Section 172 of the Companies Act 2006 requires that the
Directors act in a way that they consider, in good faith,
would most likely promote the long-term success of the
business, taking into consideration the interests of its
shareholders and other stakeholders.
The table below sets out our key stakeholder groups, their
interests and how the Group engages with them.
The Group aims to
operate ethically and be
socially responsible in
its actions
Stakeholder
Why we engage
How we engage
Our employees
Without our employees we would not
have a business. Effective employee
engagement leads to a happier,
healthier workforce who are invested
in the success of the Group. We strive
to address any employee concerns
regarding working conditions, health
and safety, training and development,
as well as workforce diversity.
Engagement with our employees
starts from the top and is driven
effectively throughout the Group.
• Evaluation and feedback processes
for employees and management
• Competitive rewards packages
• Encouraging employee training and
development
• Board level access and a relatively
flat organisational structure
Regulatory bodies
The Group’s operations are subject
to a wide range of laws, regulations,
and listing requirements including
data protection, tax, employment,
environmental and health and safety
legislation, along with contractual
terms
• Direct contact with regulators
• Compliance updates at board
meetings
• Consistent risk review
• Liaison with professional advisors
Our customers
Our relationship with our customers
is collaborative and we are in constant
dialogue to provide support as
required. We listen to and engage with
our customers on a regular basis to
ensure that we understand their needs
and can provide solutions that address
them. We work hard to ensure that
customer concerns are dealt with in a
timely and professional manner.
• Continual dialogue and review
of feedback from partner sites to
ensure satisfaction
• Dedicated teams for support to
ensure consumer concerns are
addressed
Our suppliers
We have a number of key suppliers
with whom we have built strong
relationships. We establish effective
engagement channels to ensure our
relationships remain collaborative
and forward focused, and to foster
relationships of mutual trust and
loyalty.
• Taking a collaborative approach to
problem solving with our suppliers
• Clear parameters are given, backed-
up by written agreements where
required, to ensure the Group and
supplier’s actions are co-ordinated
19
Immotion
Group plc
Annual Report
& Accounts 2021
The necessary mix of
experience, skills and
personal qualities
The three Executive Directors are full time and are
contracted to work for a minimum of forty hours per week.
The two Non-Executive Directors are expected to devote
such time as is necessary for proper performance of their
duties.
The Board are of the view that the Directors have the
necessary mix of experience, skills and personal qualities to
enable the Group to deliver its strategy, although there is
currently no gender diversity. The Board’s composition is
kept under continuous review.
The Directors are encouraged to undertake any activities or
further training they deem necessary in order to keep their
skills and knowledge relevant to the business.
Details of the current Directors, their roles and background
are as follows:
SIR ROBIN MILLER
N O N - E X E C U T I V E C H A I R M A N
Robin has extensive PLC experience
spanning many years, particularly in
the media sector. He was formerly
Chief Executive (1985-1998 and 2001-
2003) and Chairman (1998-2001) of
Emap Plc, a leading international
media group in consumer and trade
publishing, commercial radio, music TV channels and
events. Robin is currently Non-Executive Director of Dennis
Maps Ltd and Crash Media Group Ltd.
MARTIN HIGGINSON
C O - F O U N D E R A N D C H I E F
E X E C U T I V E O F F I C E R
Martin is a seasoned Technology,
Media and Telecoms (TMT)
entrepreneur.
He has set up sold and listed multiple
businesses. His first business, a BMX
magazine, was sold to IPC Magazines in 1982. Following
three years with IPC he left to set up his own publishing and
telecoms business Megafone. This was subsequently sold to
Scottish Power Plc.
During his time with Scottish Power he joined its subsidiary,
Scottish Telecom, as Managing Director of the Internet and
Interactive division, including Internet ISP Demon Internet.
Following the flotation of Thus plc (formerly Scottish
Telecom) Martin moved on to establish Monstermob Group
Plc which listed on AIM in 2003.
Over a three year period it grew to become a Top 50 AIM
listed business with a market capitalisation of £192m. This
business was sold to Zed Worldwide in late 2006. Martin
has subsequently founded a range of businesses including
Cityblock plc, a luxury student accommodation business
which was privatised and sold to management in 2009;
NetPlayTV plc, an interactive TV gaming business which
boasted exclusive partnerships with Virgin Media, Channel
Five, and ITV; and Digitalbox Plc, a digital media business.
Digitalbox was ranked in The Sunday Times Tech Track
100 in both 2015 and 2016 and listed on AIM in February
2019. Martin holds the position of Non-Executive Director
of Digitalbox Plc and has previously held Non-Executive
Director positions with Legend Plc and Cupid Plc.
The Board
The Board is comprised of three Executive Directors and two Non-Executive Directors. Both of the Non-Executive Directors are
deemed to be independent.
Corporate Governance Report
21
DAVID MARKS
C O - F O U N D E R A N D G R O U P
F I N A N C E A N D E X E C U T I V E
D I R E C T O R
David began his career with Arthur
Andersen in its corporate recovery
& restructuring department, during
which time he was involved in some
of the largest and most complex
restructuring assignments in the UK.
David then pursued a career in corporate finance and M&A,
initially with UBS and latterly with Deutsche Bank. In 2001,
David was appointed as a Partner responsible for making
private equity investment at Nikko Principal Investments
Limited, the European Principal Finance arm of Nikko
Cordial, one of Japan’s largest securities businesses.
David subsequently joined AIM-listed Monstermob Group
Plc, initially as a Non-Executive Director and subsequently
as Group Finance Director. He steered the company as it
rapidly expanded internationally across Europe, USA and
Asia.
David has also been involved in a number of early-stage
ventures as both an investor and board member and with
Martin Higginson created Digitalbox Group which was a
member of The Sunday Times Tech Track 100 in both 2015
and 2016.
David has an honours degree in Law from the University
of Glasgow and is a member of the Institute of Chartered
Accountants of Scotland.
ROD FINDLEY
P R E S I D E N T ( L O C A T I O N - B A S E D
E N T E R T A I N M E N T ) & G R O U P
C O M M E R C I A L D I R E C T O R
Rod has over 25 years’ experience
as a director, creative director and
business leader and has won a range
of international awards for his work.
He is a recognised expert in the field
of immersive technology (VR, AR) speaking and leading
panels around the world, from Singapore to Dubai. With a
BA from McGill University in Montreal and an MFA in Film
at USC, he founded C.2K Entertainment, with partner Ken
Musen, a creative advertising agency based in Los Angeles.
Working with blue-chip clients such as Toyota, Sony and
Emaar, Rod grew the company and expanded its footprint
globally with offices in Tokyo and Dubai.
Seeing the dramatic opportunities in immersive technology
such as VR and AR, Rod pioneered a string of immersive
campaigns for his major brand clients. C.2K was acquired
by Immotion Group in December 2017, since when Rod has
utilised his skills in engaging clients and audiences using
pioneering technologies to deliver significant growth in the
location-based entertainment division.
NICHOLAS LEE
N O N - E X E C U T I V E D I R E C T O R
Nicholas has extensive investment
banking and capital markets
experience and is actively involved in
public markets.
Having read Engineering at St. John’s
College, Cambridge, he commenced
his career at Coopers & Lybrand where he qualified as a
chartered accountant.
He joined Dresdner Kleinwort, where he worked in
the corporate finance department advising a range of
companies across a number of different sectors. When
he left in 2009, he was a Managing Director and Head of
Investment Banking for Dresdner Kleinwort’s hedge fund/
alternative asset manager clients. He now holds a number
of directorships of public companies with a particular focus
on technology and financial sectors.
Board Meetings
The Board typically meets once every two months to
discuss significant matters including strategic decisions
and performance. The Company’s day-to-day operations
are managed by the Executive Directors. Any Director
needing independent professional advice in the furtherance
of his duties may obtain this advice at the expense of the
Company.
The Company Secretary also attends meetings of the Board,
takes minutes and circulates them shortly thereafter. The
Company Secretary is also responsible for coordinating
Board meetings and circulating Board papers in advance.
The Board has established Audit, Disclosure, Nomination,
Remuneration and Risk Committees with formally
delegated duties and responsibilities, details of which are
provided below.
Immotion
Group plc
Annual Report
& Accounts 2021
Audit Committee
The Audit Committee is chaired by Nicholas Lee and meets
at least twice per year. Sir Robin Miller also serves on the
Audit Committee. The Audit Committee’s responsibilities
include:
(i)
ensuring that appropriate financial reporting
procedures are properly maintained and reported on;
(ii) meeting with the Group’s auditors to discuss matters of
relevance, including risk issues;
(iii) ensuring the internal controls of the Group are properly
maintained;
(iv) reviewing the financial statements prior to issue to the
shareholders;
(v) reviewing reports from the Group’s auditors;
(vi) reviewing and approving the scope and content of the
Group’s annual risk assessment programme and the
annual audit; and
(vii) monitoring the independence of the external auditors.
The Group’s Finance Director and the external auditors
attend meetings of the Audit Committee by invitation. The
Committee also holds separate meetings with the auditors
as appropriate.
The Group does not have an internal audit function as this
is not considered appropriate given the scale of the Group’s
operations. However, the Group operates internal peer
review with the scope of evaluating and testing the Group’s
internal control procedures to standardise processes around
best practice. Any significant issues are reported to the
Chair of the Audit Committee and shared with the external
auditors as appropriate.
Disclosure Committee
The Disclosure Committee is chaired by Martin Higginson
and has been established to ensure compliance with
the AIM Rules and the Market Abuse Regulations (MAR)
concerning the management of inside information. The
Disclosure Committee works closely with the Board to
ensure that the Company’s nominated adviser is provided
with any information it reasonably request or requires in
order for it to carry out its responsibilities under the AIM
Rules and the AIM Rules for Nominated Advisers. The
Disclosure Committee meet as required. David Marks and
Sir Robin Miller also sit on the Disclosure Committee.
Nomination Committee
The Nomination Committee is chaired by Sir Robin Miller
and has been established to identify and nominate, for the
approval of the Board, candidates to fill Board vacancies as
and when they arise. The Nomination Committee will meet
as required. Nicholas Lee also serves on the Nomination
Committee.
Remuneration Committee
The Remuneration Committee is chaired by Sir Robin Miller
and meets at least once per year. Nicholas Lee also serves
on the Remuneration Committee. The Remuneration
Committee’s responsibilities include reviewing the
performance of the Executive Directors, setting their
remuneration levels, determining the payment of bonuses
and considering the grant of options under the share option
schemes.
Members of the Remuneration Committee do not
participate in decisions concerning their own remuneration.
Whilst the Quoted Companies Alliance Corporate
Governance Code suggests that the Chairman of the
Board should not also chair the Remuneration Committee,
given that Sir Robin Miller is only one of two independent
Non-Executive Directors, it is considered appropriate by the
Group for him to serve in this position.
Corporate Governance Report
23
Risk Committee
The Company has a Risk Committee, comprised of the Audit Committee and the Finance Director, which meets at least once
each year. The committee examines the key risks that impact the Company and assesses the adequacy of the Company’s
mitigation strategies. It has the power to call on Executive Directors and senior management for the purposes of seeking
information as well as making recommendations.
Attendance
Directors’ attendance at meetings of the Board and its Committees during 2021 were as follows:
No formal meetings of the Nomination Committee took place during the year. The Board keep under review the effectiveness
of its performance, the performance of the Committees and the performance of individual Directors. It is the view of the Board
that no changes to the composition of the Board are required at the current time.
Compliance with Corporate Governance Codes
As an AIM-quoted company, the Company is required
to apply a recognised corporate governance code and
demonstrate how it complies with that code and where it
departs from it.
The Directors of the Company have taken the decision
to apply the Quoted Companies’ Alliance Corporate
Governance Code (the “QCA Code”).
As far as the Directors are aware, the Company is fully
compliant with the principles of the QCA Code other
than the Chairman of the Board also being chair of the
Remuneration Committee.
Full details of the QCA Code’s ten principles and the steps
the Company takes to adhere to them can be found at:
https://immotion.co.uk/investors
Board
Audit
Disclosure
Nomination
Remuneration
Risk
Martin Higginson
7/7
-
-
-
1/4
-
David Marks
7/7
2/2
1/1
-
2/4
1/1
Rod Findley
7/7
-
-
-
-
-
Sir Robin Miller
7/7
2/2
1/1
-
4/4
1/1
Nicholas Lee
7/7
2/2
1/1
-
4/4
1/1
Immotion
Group plc
Annual Report
& Accounts 2021
Corporate Governance Report
Financial Controls
The Board has overall responsibility for the Group’s system of
internal financial control and for reviewing its effectiveness.
The purpose of the system of control is to manage rather
than eliminate the risk of failure to achieve business
objectives and can only provide reasonable, but not
absolute, assurance against misstatement or loss.
The Audit Committee keeps the Company’s internal
controls and risk management systems under review.
The Finance Director is the executive within the Group
responsible for day-to-day financial management of the
Group’s affairs and its internal accounting.
Risk Management Review
Risk management is ultimately the responsibility of
the Board but is overseen by the Risk Committee. The
Group’s key risks are recorded in a risk register and those
risks together with their respective mitigants, controls
and corrective actions are reviewed regularly by the Risk
Committee.
Shareholder Relations
The Company regularly updates its investor relations
website which can be found at: immotion.co.uk/investors.
The Company is happy to engage directly with shareholders
to answer any questions they have where it is possible to do
so without releasing price-sensitive information.
The investor relations website includes details of how to
contact the Company by email and telephone.
Going Concern
At the time of approving the financial statements, the
Directors have a reasonable expectation that the Company
and the Group have adequate resources to continue in
operational existence for the foreseeable future. The going
concern basis of accounting has therefore been adopted in
preparing the financial statements.
In reaching this conclusion, the Directors have considered
the financial position of the Group, together with its
forecasts and projections for the next 12 months, taking
into account reasonably possible changes in trading
performance and capital expenditure requirements.
The Group’s forecasts assumed no further significant
disruption resulting from COVID-19.
Culture
The Directors recognise the importance of creating a
corporate culture which is consistent with the Group’s
business models and strategy.
Virtual Reality has a broad appeal and is enjoyed by people
of all genders and ages. It is the Group’s intention that its
non-discriminatory policy when hiring staff will produce a
workforce as diverse as its customer base, increasing the
value of feedback from within the organisation.
The Group is geographically spread with operations in the
UK and USA, and partner sites further afield. It is therefore
crucial that knowledge sharing across regions is facilitated
and encouraged.
The Group encourages an environment of openness and
debate and welcomes all feedback from within.
Each department within the Group prepares a weekly
report of key issues which are circulated amongst the
Executive Directors and senior management, a process
which facilitates internal feedback and knowledge sharing.
The Board believes that the current culture is appropriate
to enable the Group to deliver its strategy, though they also
recognise that it is inevitable that there is always room for
improvement in this area and any new initiatives to facilitate
communication and promote diversity will be implemented
as required.
Audit Committee Report
The Audit Committee is chaired by Nicholas Lee and meets
at least twice per year. Sir Robin Miller also serves on the
Audit Committee. The Audit Committee’s responsibilities
include:
(i)
ensuring that appropriate financial reporting
procedures are properly maintained and reported on;
(ii) meeting with the Group’s auditors to discuss matters of
relevance, including risk issues;
(iii) ensuring the internal controls of the Group are properly
maintained;
(iv) reviewing the financial statements prior to issue to the
shareholders;
(v) reviewing reports from the Group’s auditors;
(vi) reviewing and approving the scope and content of the
Group’s annual risk assessment programme and the
annual audit; and
(vii) monitoring the independence of the external auditors.
The Group’s Finance Director and the external auditors
attend meetings of the Audit Committee by invitation. The
Committee also holds separate meetings with the auditors
as appropriate.
The Audit Committee met twice during the year: to
approve the 2020 accounts and to approve the 2021 interim
accounts.
Significant Accounting Issues
The main accounting issues which the Audit Committee
focused their attention on during the period were:
(i)
The carrying value of the Group’s goodwill and
intangible assets – the Audit Committee have reviewed
the goodwill and intangible assets on the Group’s
balance sheet in the context of future earnings
expected to be generated from those assets. The
decision has been taken to fully impair certain VR
experiences developed or partially developed where
their expected future earnings are expected to be
negligible; and
(ii) The capitalisation of staff time spent creating VR and
AR content – employees of the Group have created
VR content and software during the period which are
generating revenue for the Group and are expected to
continue doing so. Where the conditions of IAS 38 are
met, the Group capitalises internal and external costs
associated with development of these experiences as
intangible assets. The Audit Committee concluded that
they were satisfied that the Group’s accounting policy
was compliant with IAS 38.
Impact of New Accounting Standards
on Future Reports
The new International Financial Reporting Standards (IFRS)
to be adopted by the Group from 1 January 2022 onwards
are set out in note 3. They are not expected to have a
material impact on the Group.
Internal Audit
The Group does not have an internal audit function as this
is not considered appropriate given the scale of the Group’s
operations, however the Group operates internal peer
review with the scope of evaluating and testing the Group’s
internal control procedures to standardise processes around
best practice. Any significant issues are reported to the
Chair of the Audit Committee and shared with the external
auditors as appropriate.
Internal Controls
The Board has overall responsibility for the Group’s system of
internal financial control and for reviewing its effectiveness.
The purpose of the system of control is to manage rather
than eliminate the risk of failure to achieve business
objectives and can only provide reasonable, but not
absolute, assurance against misstatement or loss.
The Audit Committee keeps the Company’s internal
controls and risk management systems under review.
The Finance Director is the executive within the Group
responsible for day-to-day financial management of the
Group’s affairs and its internal accounting.
External Auditors
The Audit Committee have reviewed the independence and
effectiveness of Haysmacintyre LLP, the Group’s external
auditors, and are satisfied in both respects.
Haysmacintyre LLP’s fees in the year in respect of audit
services were £70k (2020: £60k) and in respect of non-audit
services were £12k (2020: £11k) as detailed in note 9.
Haysmacintyre LLP have signified their willingness
to continue in office and a resolution to reappoint
Haysmacintyre LLP as auditor to the Company will be
proposed at the AGM.
Nicholas Lee
Chairman of the Audit Committee
25 April 2022
25
Immotion
Group plc
Annual Report
& Accounts 2021
Remuneration Committee Report
The Remuneration Committee determines the
remuneration packages for Executive Directors and other
senior employees and keeps the Group’s policy on pay and
benefits under review generally.
The Remuneration Committee will keep under review
the long-term incentivisation of Executive Directors and
senior employees, balancing the need to control costs while
ensuring that pay and benefits offered by the Group are
appropriate for attracting and retaining high calibre staff.
The Committee will continue to have due regard to
remuneration reports from independent sources, to the
guidance of its professional advisers and to good practice
generally.
Directors’ Remuneration
Directors’ remuneration for the year of 2021 is shown in the
table below:
Service contracts
There are no Directors’ service contracts with notice periods in excess of 12 months.
Salary
Consultancy
Bonus
Benefits
Pension
Total
Total
2021
2021
2021
2021
2021
2021
2020
£
£
£
£
£
£
£
M Higginson
133,953
64,094
-
8,112
1,128
207,287
175,286
D Marks
178,646
-
-
4,200
1,318
184,164
156,347
R Findley
106,709
-
20,717
27,325
-
154,751
147,034
R Miller
23,906
15,234
-
-
-
39,140
36,563
N Lee
30,443
-
-
-
726
31,169
29,105
Total
473,657
79,328
20,717
39,637
3,172
616,511
544,335
Balancing the need to control
costs while ensuring that pay
and benefits offered by the Group
are appropriate for attracting
and retaining high calibre staff.
27
Directors and their interests
The Directors’ beneficial interests in the Company were as follows:
The Directors hold share options in the Company as detailed below:
All of the above options were issued on 19 November 2020 and have an exercise price of 2.5 pence.
The vesting status of the Directors’ options is as follows:
The vesting criteria of the unvested share options is as follows:
(i) 11,175,288 of the unvested options will vest if the volume-weighted average price of the Company’s shares is 7.5 pence or
greater for twenty consecutive days; and
(ii) 11,175,289 of the unvested options will vest if the volume-weighted average price of the Company’s shares is 10 pence or
greater for twenty consecutive days.
Sir Robin Miller
Chairman of the Remuneration Committee
1 Includes shares indirectly held in M Higginson’s personal pension scheme
25 April 2022
31 December 2021
31 December 2020
Shares of
£0.00040108663
Shares of
£0.00040108663
Shares of
£0.00040108663
M Higginson1
24,026,945
24,026,945
24,026,945
D Marks
10,292,663
10,292,663
10,292,663
R Findley
10,584,349
10,584,349
10,584,349
R Miller
385,000
385,000
385,000
N Lee
241,743
241,743
241,743
EMI Options
Unapproved Options
Total Options
Shares
Shares
Shares
M Higginson
6,578,921
9,551,448
16,130,369
D Marks
6,578,921
3,858,376
10,437,297
R Findley
-
10,437,297
10,437,297
Total
13,157,842
23,847,121
37,004,963
Vested Options
Unvested Options
Total Options
Shares
Shares
Shares
M Higginson
5,376,789
10,753,580
16,130,369
D Marks
3,479,099
6,958,198
10,437,297
R Findley
5,798,498
4,638,799
10,437,297
Total
14,654,386
22,350,577
37,004,963
Immotion
Group plc
Annual Report
& Accounts 2021
Director’s Report
Principal Activities
The principal activities of the Group are: (i) the provision of
virtual reality (VR) experiences to partner sites on a revenue
share basis and in its own ImmotionVR sites; (ii) the sale of
the Group’s Let’s Explore consumer product; and (iii) the sale
of the Group’s Uvisan UV-C cleansing products.
The principal activity of the Company is that of a holding
company.
Board of Directors
The Directors who served during the year were:
Martin Higginson
David Marks
Rodney Findley
Sir Robin Miller
Nicholas Lee
Future Developments
The Company has chosen in accordance with section
414C(11) of the Companies Act 2006 to include the disclosure
of likely future developments in the Chief Executive’s
Statement on pages 7 to 13.
Dividends
No dividends were paid during the year (2020: £Nil). The
Board is not recommending the payment of a final
dividend in respect of the year ended 31 December 2021.
Earnings per Share
Loss per share in the period was 0.48p (2020: 1.33p).
Going Concern
At the time of approving the financial statements, the
Directors have a reasonable expectation that the Company
and the Group have adequate resources to continue in
operational existence for the foreseeable future. The going
concern basis of accounting has therefore been adopted in
preparing the financial statements.
In reaching this conclusion, the Directors have considered
the financial position of the Group, together with its
forecasts and projections for the next 12 months, taking
into account reasonably possible changes in trading
performance and capital expenditure requirements. The
Group’s forecasts assumed no further significant disruption
resulting from COVID-19.
Post Balance Sheet Events
As outlined in the Chairman’s Statement, the Board have
taken the decision to divest the Group’s non-core Home
Based Entertainment and Uvisan divisions. The terms
and timing of the disposals are yet to be confirmed and
as such the Board cannot be certain that the plan won’t
be significantly changed or withdrawn. This decision is
considered to be a non-adjusting post balance sheet event
as it was made subsequent to 31 December 2021.
Treasury Operations and Financial Instruments
The Group operates a centralised treasury function which
is responsible for managing liquidity, interest and foreign
currency risks associated with the Group’s activities. The
Group’s principal financial instrument is cash, the main
purpose of which is to fund the Group’s operations. The
Group has various other financial assets and liabilities such
as trade receivables and trade payables naturally arising
from its operations.
The Group’s exposure and approach to capital and financial
risk, and approach to managing these is set out in note 26 to
the consolidated financial statements.
The Directors present their report and audited financial
statements for the year ended 31 December 2021.
The
Directors’
Report.
29
Research & Development
During the year the Group invested in research and
development in order to continue its products and services.
The Group claims R&D tax credits where eligible.
Employee Engagements
The Group engages with its employees regularly in
numerous ways. Details of the Group’s performance are
shared with employees at appropriate times.
Employee Policies
The Group has established employment policies which are
compliant with current legislation and codes of practice.
The Group is an equal opportunities employer.
Payment of Suppliers
The Group’s policy is to pay suppliers in accordance with
the relevant contractual terms between the Group and the
supplier. Where no specific terms are agreed, the Group’s
standard policy is 30 days.
Directors’ Indemnity
The Company’s Articles of Association provide, subject to
the provisions of UK legislation, an indemnity for Directors
and officers of the Company in respect of liabilities they may
incur in the discharge of their duties or in the exercise of
their powers, including any liabilities relating to the defence
of any proceedings brought against them which relate to
anything done or omitted, or alleged to have been done or
omitted, by them as officers or employees of the Company.
Appropriate directors’ and officers’ liability insurance cover is
in place in respect of all the Directors.
Directors’ Conflicts of Interest
In the event that a Director becomes aware that they,
or their connected parties, have an interest in an existing
or proposed transaction involving the Group, they will notify
the Board in writing or at the next Board meeting.
Political Donations
The Group did not make any political donations during 2021
(2020: £Nil).
Immotion
Group plc
Annual Report
& Accounts 2021
Director’s Report
Significant Shareholdings
As at 31 December 2021, the following shareholders owned
3% or more of the Company:
As at 25 April 2022, the following shareholders owned 3% or
more of the Company:
Matters Covered in the Chairman’s Statement and
Financial Statements
Certain matters which are required to be disclosed in the
Directors’ Report (such as review of the business and future
developments) have been omitted as they are included
within the Chief Executive’s Statement (on pages 7 to 13)
and within the notes to the Financial Statements.
Annual General Meeting
The Company’s Annual General Meeting will be held later in
the year.
Statement as to Disclosure of Information to the
Auditor
As far as the Directors are aware they have each taken all
necessary steps to make themselves aware of any relevant
audit information and to establish that the auditor is 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.
Auditors
Haysmacintyre LLP have signified their willingness
to continue in office and a resolution to reappoint
Haysmacintyre LLP as auditor to the Company will be
proposed at the AGM.
Approved by the Board on 25 April 2022
and signed on its behalf
Martin Higginson
Director
1 Includes shares held by M Higginson’s pension scheme
1 Includes shares held by M Higginson’s pension scheme
Shareholder
Shares
%
Stonehage Fleming
38,035,010
9.15%
Hargreaves Lansdown
(Nominees) Limited
36,362,772
8.75%
Rathbone Nominees Limited
33,216,858
7.99%
Unicorn AIM VCT
29,137,930
7.01%
Martin Higginson1
24,026,945
5.78%
Interactive Investor Services
Nominees Limited
23,154,748
5.57%
Lawshare Nominees Limited
18,390,245
4.43%
Halifax Share Dealing
12,954,710
3.12%
Herald Investment Trust
12,896,551
3.10%
Shareholder
Shares
%
Stonehage Fleming
38,035,010
9.15%
Hargreaves Lansdown
(Nominees) Limited
36,147,205
8.70%
Rathbone Nominees Limited
32,602,113
7.85%
Unicorn AIM VCT
29,137,930
7.01%
Martin Higginson1
24,026,945
5.78%
Interactive Investor Services
Nominees Limited
22,025,079
5.30%
Lawshare Nominees Limited
20,554,533
4.95%
Herald Investment Trust
12,896,551
3.10%
31
The Directors are responsible for preparing the Directors’
Report and the financial statements in accordance with
applicable law and regulations.
Company law requires the Directors to prepare financial
statements for each financial year. Under that law the
Directors have elected to prepare the financial statements
in accordance with International Financial Reporting
Standards (“IFRS”) as adopted by the European Union and
applicable law. 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 the Group and of the profit or loss of the
Company and the Group for that period.
In preparing these financial statements, the Directors are
required to:
•
select suitable accounting policies and then apply them
consistently;
•
make judgments and accounting estimates that are
reasonable and prudent;
•
state whether IFRSs as adopted by the European Union
have been followed subject to any material departures
disclosed and explained in the financial statements;
•
provide additional disclosures when compliance with
specific requirements in IFRSs are insufficient to
enable users to understand the impact of particular
transactions, other events and conditions on the
Company’s and the Group’s financial position and
financial performance; and
•
prepare the financial statements on the going concern
basis unless it is inappropriate to assume that the
Company and the Group will continue in business.
Financial statements are published on the Group’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 maintenance and integrity of
the corporate and financial information on the Group’s
website is the responsibility of the Directors. The Directors’
responsibility also extends to the ongoing integrity of the
financial statements contained therein. The work carried
out by the auditors does not include consideration of
the maintenance and the integrity of the website and
accordingly the auditor accepts no responsibility for any
changes that have occurred to the financial statements
when they are presented on the website.
The Directors’
Responsibilities
Statement
Immotion
Group plc
Annual Report
& Accounts 2021
Independent Auditor’s Report
Opinion
We have audited the financial statements of Immotion
Group PLC (the ‘parent company’) and its subsidiaries
(the ‘group’) for the year ended 31 December 2021 which
comprise the Consolidated Statement of Comprehensive
Income, the Consolidated and parent company Statements
of Financial Position, the Consolidated and parent company
Statements of Changes in Equity, the Consolidated and
parent 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 United Kingdom adopted international accounting
standards.
In our opinion, the financial statements:
•
give a true and fair view of the state of the group’s and of
the parent company’s affairs as at 31 December 2021 and
of the group’s loss for the year then ended;
•
have been properly prepared in accordance with United
Kingdom adopted IFRSs; and
•
have been prepared in accordance with the
requirements of the Companies Act 2006.
Basis for opinion
We conducted our audit in accordance with International
Standards on Auditing (UK) (ISAs (UK)) and applicable
law. Our responsibilities under those standards are further
described in the Auditor’s responsibilities for the audit
of the financial statements section of our report. We
are independent of the group 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 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
In auditing the financial statements, we have concluded
that the directors’ use of the going concern basis of
accounting in the preparation of the financial statements is
appropriate. Our evaluation of the directors’ assessment of
the entity’s ability to continue to adopt the going concern
basis of accounting included but was not limited to:
•
The review of management’s going concern assessment
which incorporate scrutiny of working capital projections
for a period of at least twelve months from the date of
approval of the financial statements;
•
The review and consideration of the appropriateness of
sensitivity analysis of trading performance and cash flow
forecasts prepared by management;
•
Challenging and assessing the underlying assumptions
of the cash flow forecasts and considering whether the
period of the forecast is appropriate;
•
The review of post balance sheet trading performance
and cash flow to assess the reasonableness of
management’s forecasting; and
•
A consideration of management’s assertion of risk
mitigation measures available to the group should there
be a materially adverse decline in trading performance
or cash flow.
Based on the work we have performed, we have not
identified any material uncertainties relating to events
or conditions that, individually or collectively, may cast
significant doubt on the group’s and parent company’s
ability to continue as a going concern for a period of at least
twelve months from when the financial statements are
authorised for issue.
Independent
Auditor’s
Report.
33
An overview of the scope of our audit
As part of designing our audit, we determined materiality
and assessed the risks of material misstatement in the
financial statements. In particular, we considered areas
where subjective judgement was exercised by the directors,
for example in respect of significant accounting estimates
that involved making assumptions and considering future
events that are inherently uncertain. We also assessed
the risk of management override of controls, including
evaluating whether there was evidence of bias by the
directors that represented a risk of material misstatement
due to fraud. We tailored the scope of our audit to ensure
that we performed sufficient 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.
Our audit scope included the statutory audit of each of the
group’s subsidiaries incorporated in the United Kingdom
for the year ended 31 December 2021. It excludes the two US
subsidiaries C.2K Entertainment Inc and Let’s Explore Inc
and those outlined below that are exempt from statutory
audit. These subsidiary audits, which are exempt from
local statutory audits were performed to component level
materiality, which was lower than group materiality, while
work for the purposes of the group audit was performed on
non-UK subsidiaries using component materiality assessed
in line with their contribution to the Group’s financial
performance. The subsidiaries, Immotion Limited, Ranger
Rob Limited and Vodiac Limited, were exempt from audit
by virtue of S479A of Companies Act 2006 and were audited
to component materiality for the purposes of the group
audit.
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.
KEY AUDIT MATTER
HOW OUR SCOPE ADDRESSED THIS MATTER
Revenue recognition
There is a risk that group revenue, comprising the
sale of content, partner revenue, VR revenue and
hardware, is incorrectly treated under IFRS.
Our audit work included, but was not restricted to,
the following:
• Considering the stated accounting policies in
respect of revenue recognition and whether these
are consistent with IFRS 15;
• A detailed review and assessment of how revenue is
recognised;
• An assessment of deferred and accrued income to
ensure it is correctly calculated, recognised in the
appropriate period and that it is complete;
• A review of deferred and accrued income
judgements made; and
• Substantive procedures on a sample of revenue
transactions, including a review of those around the
reporting date to assess appropriate cut off has been
applied.
Immotion
Group plc
Annual Report
& Accounts 2021
Independent Auditor’s Report
KEY AUDIT MATTER
HOW OUR SCOPE ADDRESSED THIS MATTER
Impairment of goodwill
The group has goodwill arising from previous
acquisitions with a carrying value £2,438k (2020:
£2,438k). There is a risk that the valuation of goodwill
arising from previous acquisitions is impaired and
therefore materially overstated.
Our audit work included, but was not restricted to,
the following:
• Reviewing and assessing the impairment
reviews prepared by management, including
the assessment of the validity of inputs into the
calculation and challenging their underlying
assumptions and sensitivities;
• We challenged management’s allocation of goodwill
to a specific CGU;
• Reviewing and assessing future budgets and cash
flow forecasts used in management’s impairment
reviews;
• Considering whether there were any indications of
impairment for the financial year end; and
• Making enquiries of management and assessing
expected future performance and potential growth
in the business.
Capitalisation of development costs
The group recognises material software and content
developments costs as an intangible asset, rather
than expenditure. Given that such capitalisation and
ongoing recognition is a matter of judgement, we
considered this area to be a key audit matter.
Our audit work included, but was not restricted to,
the following:
• Reviewing and assessing the criteria for capitalising
development costs under IAS 38 and ensuring these
had been met;
• Vouching items capitalised as development costs
on a sample basis to appropriate supporting
documents such as invoices and timesheets;
• Reviewing and assessing the methodology of
calculating development costs;
• Reviewing and assessing management’s
impairment review of ongoing projects at the
balance sheet date; and
• assessment of whether they meet the criteria of an
intangible asset.
35
Our application of materiality
The scope and focus of our audit was influenced by our
risk assessment and application of materiality. We define
materiality as the magnitude of misstatement that could
reasonably be expected to influence the economic decisions
of the users of the financial statements. We use materiality
to determine the scope of our audit and the nature, timing
and extent of our audit procedures and to evaluate the
effect of misstatements, both individually and on the
financial statements as a whole.
Materiality for the financial statements as a whole was set at
£150,000, determined by reference to 7.5% of the group’s loss
before tax. Based on the group’s KPI’s used in the annual
report, the loss before tax is considered a primary measure
used by the shareholders in assessing the performance of
the group and is a generally accepted auditing benchmark.
We have reported to the audit committee any corrected
or uncorrected misstatements arising exceeding £7,500.
Performance materiality was set at £112,500, being 75% of
materiality.
Materiality for the parent company was set at £100,000,
determined by reference to 1% of its gross asset position.
We have reported to the audit committee any corrected
or uncorrected misstatements arising exceeding £5,000.
Performance materiality was set at £75,000, being 75% of
materiality.
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.
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 its 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.
Immotion
Group plc
Annual Report
& Accounts 2021
Independent Auditor’s Report
Responsibilities of directors
As explained more fully in the directors’ responsibilities
statement set out on page 31, the directors are responsible
for the preparation of the financial statements and for being
satisfied that they give a true and fair view, and for such
internal control as the 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.
Irregularities, including fraud, are instances of non-
compliance with laws and regulations. We design
procedures in line with our responsibilities, outlined above,
to detect material misstatements in respect of irregularities,
including fraud. The extent to which our procedures are
capable of detecting irregularities, including fraud is
detailed below:
Explanation as to what extent the audit was
considered capable of detecting irregularities,
including fraud.
The objectives of our audit, in respect to fraud are: to
identify and assess the risks of material misstatement of
the financial statements due to fraud; to obtain sufficient
appropriate audit evidence regarding the assessed risks of
material misstatement due to fraud, through designing
and implementing appropriate responses; and to respond
appropriately to fraud or suspected fraud identified during
the audit. However, the primary responsibility for the
prevention and detection of fraud rests with both those
charged with governance of the entity and management.
Our approach was as follows: Based on our understanding
of the company and industry, we identified that the
principal risks of non-compliance with laws and regulations
related to regulatory requirements related to the AIM rules
for this business and we considered the extent to which
non-compliance might have a material effect on the
financial statements. We also considered those laws and
regulations that have a direct impact on the preparation of
the financial statements such as the Companies Act 2006,
income tax, payroll tax and sales tax.
•
Inspecting correspondence with regulators and tax
authorities;
•
Discussions with management including consideration
of known or suspected instances of non-compliance
with laws and regulation and fraud;
•
Evaluating management’s controls designed to prevent
and detect irregularities;
•
Identifying and testing journals, in particular journal
entries which exhibited certain characteristics which
could indicate risks, including those posted with unusual
narratives, those posted at unusual dates or unusual
times and journals posted with round or consistent
ending numbers; and
•
Challenging assumptions and judgements made by
management in their critical accounting estimates.
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.
37
Use of our report
This report is made solely to the company’s members,
as a body, in accordance with Chapter 3 of Part 16 of the
Companies Act 2006. Our audit work has been undertaken
so that we might state to the company’s members those
matters we are required to state to them in an Auditor’s
report and for no other purpose. To the fullest extent
permitted by law, we do not accept or assume responsibility
to anyone other than the company and the company’s
members as a body, for our audit work, for this report, or for
the opinions we have formed.
Christopher Cork
(Senior Statutory Auditor)
For and on behalf of Haysmacintyre LLP, Statutory Auditors
10 Queen Street Place, London EC4R 1AG
25 April 2022
Immotion
Group plc
Annual Report
& Accounts 2021
Consolidated Statement of Comprehensive Income
for the Year Ended 31 December 2021
Year ended
Year ended
31 December 2021
31 December 2020
Note
£’000
£’000
Revenue
7
9,391
2,848
Cost of sales
(6,195 )
(2,382 )
Gross profit
3,196
466
Administrative expenses
(5,722 )
(5,779 )
Other operating income
8
532
575
Loss from operations
9
(1,994 )
(4,738 )
Memorandum:
Adjusted EBITDA
908
(1,690 )
Depreciation
(1,470 )
(1,751 )
Amortisation
(641 )
(719 )
Impairment of tangible and intangible assets
(82 )
(253 )
Share based payments
(676 )
(194 )
Profit / (loss) on disposal of fixed assets
18
(35 )
One-off costs & income
(51 )
(96 )
Loss from operations
(1,994 )
(4,738 )
Finance costs
11
(44 )
(82 )
Finance income
12
1
2
Loss before taxation and attributable to equity
holders of the parent
(2,037 )
(4,818 )
Taxation
13
38
86
Loss after taxation
(1,999 )
(4,732 )
Other comprehensive expense
Profit / (loss) on translation of subsidiary
44
(35 )
Loss after taxation and attributable to equity holders of
the parent and total comprehensive income for the period
(1,955 )
(4,767 )
All results arose from continuing operations.
39
The notes on pages 44 to 77 form part of the group financial statements.
Year ended
Year ended
31 December 2021
31 December 2020
Note
£0.01
£0.01
Loss per share
Basic
14
(0.48 )
(1.33 )
Diluted
14
(0.48 )
(1.33 )
Immotion
Group plc
Annual Report
& Accounts 2021
Consolidated Statement of Changes in Equity
for the Year Ended 31 December 2021
Share
Share
Foreign
Retained
Total
capital
premium
exchange
deficit
equity
reserve
£’000
£’000
£’000
£’000
£’000
Balance at 1 January 2020
115
15,310
(45 )
(9,105 )
6,275
Issue of shares
49
5,352
-
-
5,401
Issue costs deducted from equity
-
(389 )
-
-
(389 )
Loss after tax
-
-
-
(4,732 )
(4,732 )
Equity settled share-based payments
-
-
-
194
194
Currency translation of overseas subsidiary
-
-
(35 )
-
(35 )
Balance at 31 December 2020
164
20,273
(80 )
(13,643 )
6,714
Issue of shares
2
298
-
-
300
Issue costs deducted from equity
-
(15 )
-
-
(15 )
Loss after tax
-
-
-
(1,999 )
(1,999 )
Equity settled share-based payments
-
-
-
676
676
Currency translation of overseas subsidiary
-
-
44
-
44
Balance at 31 December 2021
166
20,556
(36 )
(14,966 )
5,720
The notes on pages 44 to 77 form part of the group financial statements.
41
Consolidated Statement of Financial Position
as at 31 December 2021
Year ended
Year ended
31 December 2021
31 December 2020
Note
£’000
£’000
ASSETS
Non-current assets
Property, plant and equipment
15
1,188
2,260
Intangible fixed assets
16
3,305
3,625
Total non-current assets
4,493
5,885
Current assets
Inventories
17
103
152
Trade and other receivables
18
1,783
829
Contract assets
19
83
91
Cash and cash equivalents
20
1,099
1,664
Total current assets
3,068
2,736
Total assets
7,561
8,621
LIABILITIES
Current liabilities
Trade and other payables
21
(1,103 )
(1,153 )
Loans and borrowings
21
(130 )
(175 )
Lease liabilities
21
(171 )
(231 )
Contract liabilities
22
(278 )
(12 )
Total current liabilities
(1,682 )
(1,571 )
Non-current liabilities
Loans
21
(155 )
(160 )
Lease liabilities
21
(4 )
(176 )
Total non-current liabilities
(159 )
(336 )
Total liabilities
(1,841 )
(1,907 )
Total net assets
5,720
6,714
Capital and reserves attributable to owners of the parent
Share capital
27
166
164
Share premium
29
20,556
20,273
Foreign exchange reserve
29
(36 )
(80 )
Retained deficit
29
(14,966 )
(13,643 )
Total equity
5,720
6,714
The financial statements were approved by the Board and authorised for issue on 25 April 2022
Martin Higginson
David Marks
Chief Executive Officer
Group Finance Director
The notes on pages 44 to 77 form part of the group financial statements.
Year ended
Year ended
31 December 2021
31 December 2020
£’000
£’000
Cash flows from operating activities
Loss before tax
(2,037 )
(4,818 )
Adjustments for:
Share based payments
676
194
Depreciation on property plant and equipment
1,470
1,751
Profit/(loss) on disposal of fixed assets
(18 )
35
Amortisation of intangible assets
641
719
Impairment of tangible and intangible assets
82
253
Finance costs
44
82
Finance income
(1 )
(2 )
Foreign exchange on retranslation of fixed assets
35
(72 )
Foreign exchange profit/(loss)
44
(35 )
Foreign corporate tax payment
(3 )
-
Corporation tax repayment received
84
73
Cash inflows/(outflows) from operating activities before
changes in working capital
1,017
(1,820 )
Decrease/(increase) in inventories
49
(152 )
Increase in trade and other receivables
(989 )
(132 )
Increase in trade & other payables and contract liabilities
215
92
Cash generated/(used) in operations
292
(2,012 )
Investing activities
Purchase of intangible assets
(404 )
(545 )
Purchase of property, plant and equipment
(425 )
(1,069 )
Proceeds from disposals of property, plant and equipment
41
159
Foreign exchange on retranslation of fixed assets
(29 )
62
Net cash used in investing activities
(817 )
(1,393 )
Financing activities
Finance costs
(44 )
(82 )
Finance income
1
2
New loans and finance leases
119
302
Loan and finance lease repayments
(405 )
(615 )
Foreign exchange on retranslation of financing
4
(24 )
Issue of new share capital
300
5,401
Costs on issue of shares
(15 )
(389 )
Net cash from financing activities
(40 )
4,595
Net (decrease)/increase in cash and cash equivalents
(565 )
1,190
Cash and cash equivalents at beginning of the period
1,664
474
Cash and cash equivalents at end of the period
1,099
1,664
Immotion
Group plc
Annual Report
& Accounts 2021
Consolidated Statement of Cash Flows
for the Year Ended 31 December 2021
Year ended
Year ended
31 December 2021
31 December 2020
£’000
£’000
Reconciliation of net cashflow to movement in net debt:
Net (decrease)/increase in cash and cash equivalents
(565 )
1,190
New loans and finance leases
(119 )
(328 )
Repayment of loans and finance leases
405
615
Foreign exchange on retranslation of financing
(4 )
24
Movement in net funds in the year
(283 )
1,501
Net funds/(debt) at 1 January
922
(579 )
Net funds at 31 December
639
922
Breakdown of net funds/(debts)
Cash and cash equivalents
1,099
1,664
Loans and borrowings
(285 )
(335 )
Lease liabilities
(175 )
(407 )
Net funds at 31 December
639
922
43
Consolidated Statement of Cash Flows
for the Year Ended 31 December 2021
The notes on pages 44 to 77 form part of the group financial statements.
Immotion
Group plc
Annual Report
& Accounts 2021
Notes to the Consolidated Financial Statements
for the Year Ended 31 December 2021
1. GENERAL INFORMATION
Immotion Group plc is a public limited company
incorporated and domiciled in the United Kingdom. The
address of the registered office is Cumberland Court, 80
Mount Street, Nottingham, England, NG1 6HH. The Group
is listed on AIM.
The principal activities of the Group during the year were
the provision of virtual reality (VR) experiences to partner
sites and via its own ImmotionVR sites; the sale of the
Let’s Explore virtual and augmented reality consumer
product; and the sale of UV sanitisation equipment.
These financial statements are presented in pounds
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 4.
2. STANDARDS, AMENDMENTS AND INTERPRETATIONS
ADOPTED IN THE CURRENT FINANCIAL YEAR ENDED 31
DECEMBER 2021
The principal accounting policies adopted in the
preparation of these consolidated financial statements
are consistent with those followed in the preparation
of the Group’s annual audited consolidated financial
statements for the year ended 31 December 2020, except
for any new and revised IFRSs effective 1 January 2021.
None of the new IFRSs and IFRS amendments effective
in the year ended 31 December 2021 have had a material
impact on the consolidated financial statements of the
Group.
3. NEW AND REVISED IFRS STANDARDS IN ISSUE BUT
NOT YET EFFECTIVE
The following new accounting standards and
amendments to new accounting standards have been
issued but are not yet effective and have not yet been
endorsed by the UK Endorsement Board:
• IFRS 17 ‘Insurance contracts’ – effective 1 January 2023;
• Amendments to IFRS 3 ’Reference to the conceptual
framework’ – effective 1 January 2022;
• Amendments to IAS 1 ‘Disclosure of accounting policies’
– effective 1 January 2023;
• Amendments to IAS 1 ‘Classification of liabilities as
current or non-current’ – effective 1 January 2023;
• Amendments to IAS 8 ‘Definition of accounting
estimates’ – effective 1 January 2023;
• Amendments to IAS 12 ‘Deferred tax related to assets
and liabilities arising from a single transaction’ –
effective 1 January 2023;
• Amendments to IAS 16 ‘Proceeds before intended use’ –
effective 1 January 2022;
• Amendments to IAS 37 ‘Onerous contracts – costs of
fulfilling a contract’ – effective 1 January 2022; and
• Annual improvements to IFRS 2018-2020 – effective 1
January 2022.
The Group is currently assessing the impact of the above
changes, but they are not expected to have a material
impact. The Group has not adopted any other standard,
amendment or interpretation that has been issued but is
not yet effective.
4. ACCOUNTING POLICIES
Principal accounting policies
The Company is a public company incorporated
and domiciled in the United Kingdom. The principal
accounting policies applied in the preparation of these
consolidated financial statements are set out below.
These policies have been consistently applied to all the
periods presented, unless otherwise stated.
Basis of preparation
The financial statements have been prepared in
accordance with International Financial Reporting
Standards, International Accounting Standards
and Interpretations (collectively IFRS) issued by the
International Accounting Standards Board (IASB) as
adopted by the United Kingdom (“adopted IFRSs”) and
those parts of the Companies Act 2006 which apply to
companies preparing their financial statements under
IFRSs. The financial statements are presented to the
nearest round thousand (£’000) except when otherwise
indicated.
Basis of Consolidation
The Group comprises a holding company and a number
of individual subsidiaries and all of these have been
included in the consolidated financial statements in
accordance with the principles of acquisition accounting
as laid out by IFRS 3 Business Combinations.
Going concern
At the time of approving the financial statements,
the Directors have a reasonable expectation that the
Company and the Group have adequate resources to
continue in operational existence for the foreseeable
future. The going concern basis of accounting has
therefore been adopted in preparing the financial
statements.
In reaching this conclusion, the Directors have considered
the financial position of the Group, together with its
forecasts and projections for the next 12 months, taking
45
into account reasonably possible changes in trading
performance and capital expenditure requirements.
The Group’s forecasts assumed no further significant
disruption resulting from COVID-19. The Directors
consider that while such disruption remains a risk, it is no
longer considered to be sufficiently likely to an extent that
creates a material uncertainty around the Group’s ability
to continue as a going concern.
The financial statements do not include any adjustments
that would result from the going concern basis of
preparation being inappropriate.
Business combinations and goodwill
Acquisitions of subsidiaries and business are accounted
for using the acquisition method. The assets and liabilities
and contingent liabilities of the subsidiaries are measured
at their fair value at the date of acquisition. Any excess of
acquisition over fair values of the identifiable net assets
acquired is recognised as goodwill. Goodwill arising on
consolidation is recognised as an asset and reviewed
for impairment twice annually. Any impairment is
recognised immediately in profit or loss accounts and is
not subsequently reversed. Acquisition related costs are
recognised in the income statement as incurred.
Revenue recognition
Revenue is recognised to the extent that it is probable
that the economic benefits will flow to the Group and
the revenue can be reliably measured. Revenue is
measured as the fair value of the consideration received
or receivable, excluding discounts, rebates, value added
tax and other sales taxes. The following criteria must also
be met before revenue is recognised:
Location Based Entertainment
Partner revenue is recognised on the date which the
sale to the customer takes place. The Group acts as the
principal in the transaction and therefore recognises
the revenue charged to the end user in full with the
concession partners’ shares deducted as a cost of sale.
Home Based Entertainment
Revenue is recognised on sales of the Let’s Explore
products in the period in which the corresponding order
is placed and paid for.
Uvisan and other hardware sales
Revenue from the sale of goods is recognised when all of
the following conditions are satisfied:
• the Group has transferred the significant risks and
rewards of ownership to the buyer;
• the Group retains neither continuing managerial
involvement to the degree usually associated with
ownership nor effective control over the goods sold;
• the amount of revenue can be reliably measured;
• it is probable that the Group will receive the
consideration due under the transaction; and
• the costs incurred or to be incurred in respect of the
transaction can be reliably measured.
Content
Revenue from a contract to provide services is recognised
in the period in which the services are provided in
accordance with the stage of completion of the contract
when all of the following conditions are satisfied:
• the amount of revenue can be measured reliably;
• it is probable that the Group will receive the
consideration due under the contract;
• the performance obligations of the contract at the end
of the reporting period can be measured reliably; and
• the costs incurred and the costs to complete the
contract can be measured reliably.
Content licensing revenue is recognised on the date on
which the related sale of that content by the licensee
takes place where agreements do not provide for new or
updated content to be supplied. Where Immotion Group
is committed under licensing agreements to producing
new content, or material updates, revenue is recognised
over the period of the agreement. No element of
financing is deemed present as the sales are made with
standard credit terms of 30 days which is consistent with
market practice. The Group does not expect to have any
contracts where the period between the transfer of the
promised services or goods to the customer and payment
by the customer exceeds one year. As a consequence, the
Group does not adjust any of the transaction prices for
the time value of money.
Leases
The Group assesses whether a contract is or contains a
lease, at inception of a contract. The Group recognises a
right-of-use asset and a corresponding lease liability with
respect to all lease agreements in which it is the lessee,
except for short-term leases (defined as leases with a
lease term of 12 months or less) and leases of low value
assets. In the latter cases, the Group recognises the lease
payments as an operating expense on a straight-line
basis over the term of the lease unless another systematic
basis is more representative of the time pattern in which
economic benefits from the leased asset are consumed.
The lease liability is initially measured at the present
value of the lease payments that are not paid at the
commencement date, discounted by using the
rate implicit in the lease. If this rate cannot be readily
determined, the Group uses its incremental
borrowing rate.
Immotion
Group plc
Annual Report
& Accounts 2021
Notes to the Consolidated Financial Statements
for the Year Ended 31 December 2021
4. ACCOUNTING POLICIES (continued)
Lease payments included in the measurement of the
lease liability comprise fixed lease payments (including
in-substance fixed payments), less any lease incentives.
The lease liability is included in liabilities in the statement
of financial position.
The lease liability is subsequently measured by increasing
the carrying amount to reflect interest on the lease
liability (using the effective interest method) and
by reducing the carrying amount to reflect the
payments made.
The right-of-use assets comprise the initial measurement
of the corresponding lease liability, lease payments made
at or before the commencement day and any initial
direct costs. They are subsequently measured at cost less
accumulated depreciation and impairment losses.
Right-of-use assets are depreciated over the shorter
period of lease term and useful life of the underlying
asset. If a lease transfers ownership of the underlying
asset or the cost of the right-of-use asset reflects that
the Group expects to exercise a purchase option, the
related right-of-use asset is depreciated over the useful
life of the underlying asset. The depreciation starts at the
commencement date of the lease.
The right-of-use assets are included in the tangible fixed
assets in the statement of financial position.
The Group applies IAS 36 to determine whether a right-
of-use asset is impaired and accounts for any identified
impairment losses where applicable.
Foreign currency
The individual financial statements of each group
company are presented in the currency of the primary
economic environment in which it operates (its functional
currency). For the purpose of the consolidated financial
statements, the results and financial position of each
group company are expressed in pound sterling,
which is the functional currency of the Group, and the
presentational currency for the consolidated financial
statements.
In preparing the financial statements of the individual
companies, transactions in currencies other than the
Group company’s functional currency (foreign currencies)
are recorded at rates of exchange prevailing on the dates
of the transactions. At the reporting date, monetary
assets and liabilities that are denominated in foreign
currencies are retranslated at the rates prevailing on
the reporting date. Non-monetary items carried at fair
value that are denominated in foreign currencies are
translated at the rates prevailing at the date when the
fair value was determined. Non-monetary items that are
measured in terms of historical cost in foreign currency
are not retranslated. Exchange differences arising on the
settlement of monetary items, and on the retranslation
of monetary items, are included in profit or loss for the
period. Exchange differences arising on the retranslation
of non-monetary items carried at fair value are included in
profit or loss for the period except for differences arising
on the retranslation of non-monetary items in respect of
which gains and losses are recognised directly in equity.
For such non-monetary items, any exchange component
of the gain or loss is also recognised directly in equity.
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 reporting date. Income and expense items are
translated at the average exchange rates for the period,
unless exchange rates fluctuate significantly during the
period, in which case the exchange rates at the date
of transactions are used. Exchange differences arising,
if any, are classified as equity and transferred to the
Group’s translation reserve. Such translation differences
are recognised as income and expense in the period of
the disposal of the operation. Goodwill and fair value
adjustments arising on the acquisition of a foreign entity
are treated as assets and liabilities of the foreign entity
and translated at the closing rates.
Tangible assets
Property, plant and equipment are stated at cost net of
accumulated depreciation and provision for impairment.
Depreciation is provided on all property plant and
equipment, at rates calculated to write off the cost less
estimated residual value, of each asset on a straight-line
basis over its expected useful life.
The residual value is the estimated amount that would
currently be obtained from disposal of the asset if the
asset were already of the age and in the condition
expected at the end of its useful economic life.
The method of depreciation for each class of depreciable
asset is:
Intangible assets
Intangible assets include goodwill arising on the
acquisition of subsidiaries and represents the difference
between the fair value of the consideration payable and
the fair value of the net assets that have been acquired.
The residual element of goodwill is not being amortised
but is subject to twice-annual impairment review.
Leasehold property
Over term of lease
Fixtures, fittings and equipment
33%-50% straight line
IFRS 16 right of use assets
Over term of lease
47
Also included within intangible assets are various assets
separately identified in business combinations (such as
customer lists) to which the Directors have ascribed a
commercial value and a useful economic life. The ascribed
value of these intangible assets has been amortised on a
straight-line basis over their estimated useful economic
lives, which is considered to be 3 years.
Internally-generated intangible assets
An internally-generated intangible asset arising from the
Group’s development activities is capitalised and held as
an intangible asset in the statement of financial position
when the costs relate to a clearly defined project; the
costs are separately identifiable; the outcome of such a
project has been assessed with reasonable certainty as
to its technical feasibility and its ultimate commercial
viability; the aggregate of the defined costs plus all
future expected costs in bringing the product to market
is exceeded by the future expected sales revenue; and
adequate resources are expected to exist to enable the
project to be completed. Internally generated intangible
assets are amortised over their estimated useful lives,
being 3 years from completion of development. Other
development expenditure is recognised as an expense in
the income statement in the period in which it is incurred.
Impairment of assets
Impairment tests on goodwill are undertaken twice-
annually. The recoverable value of goodwill is estimated
on the basis of value in use, defined as the present value
of the cash generating units with which the goodwill is
associated. When value in use is less than the book value,
an impairment is recorded and is irreversible.
Other non-financial assets are subject to impairment
tests whenever circumstances indicate that their carrying
amount may not be recoverable. Where the carrying
value of an asset exceeds its estimated recoverable value
(i.e. the higher of value in use and fair value less costs to
sell), the asset is written down accordingly. Where it is not
possible to estimate the recoverable value of an individual
asset, the impairment test is carried out on the asset’s
cash-generating unit. The carrying value of property,
plant and equipment is assessed in order to determine
if there is an indication of impairment. Any impairment
is charged to the statement of comprehensive income.
Impairment charges are included under administrative
expenses within the consolidated statement of
comprehensive income.
Inventories
Inventories are stated at the lower of cost and net
realisable value. Costs comprise direct materials and,
where applicable, direct labour costs and overheads
that have been incurred in bringing the inventories
to their present location and condition. Net realisable
value represents the estimated selling price less all
estimated costs of completion and costs to be incurred in
marketing, selling and distribution.
Financial instruments
The Group classifies financial instruments, or their
component parts, on initial recognition as a financial
asset, a financial liability or an equity instrument.
The Group recognises lifetime expected credit losses
for trade receivables and amounts due on contracts
with customers when appropriate. The expected credit
losses on these financial assets are estimated based on
the Group’s historical credit loss experience, adjusted for
facts that are specific to the debtors, general economic
conditions and an assessment of both the current as
well as the forecasted conditions at the reporting date,
including time value of money where appropriate.
Lifetime expected credit losses are losses which will result
from all possible default events over the expected life of a
financial instrument.
Contract assets
Contract assets are recognised when the Group has
satisfied a performance obligation but cannot recognise
a receivable until other obligations are satisfied. Contract
assets represent a right to payment that is conditional
on further performance while receivables represent an
unconditional right to payment.
Contract liabilities
Contract liabilities comprise payments in advance
of revenue recognition and revenue deferred due to
contract performance obligations not being completed.
They are classified as current liabilities if the contract
performance obligations are due to be completed
within one year or less (or in the normal operating cycle
of the business if longer). If not, they are presented as
non-current liabilities. Contract liabilities are recognised
initially at fair value and subsequently at amortised cost.
Trade and other receivables
Trade and other receivables are measured at initial
recognition at fair value, and subsequently measured
at amortised cost using the effective interest method. A
provision is established when there is objective evidence
that the Group will not be able to collect all amounts due.
The amount of any provision is recognised in profit or loss.
Cash and cash equivalents
Cash and cash equivalents are recognised as financial
assets. They comprise cash held by the Group and short-
term bank deposits with an original maturity date of three
months or less.
Immotion
Group plc
Annual Report
& Accounts 2021
Notes to the Consolidated Financial Statements
for the Year Ended 31 December 2021
4. ACCOUNTING POLICIES (continued)
Trade payables
Trade payables are initially recognised as financial
liabilities measured at fair value, and subsequent to initial
recognition are measured at amortised cost.
Bank borrowings
Interest bearing bank loans, overdrafts and other loans
are recognised as financial liabilities and recorded at
fair value, net of direct issue costs. Finance costs are
accounted for on an amortised cost basis in the income
statement using the effective interest rate.
Equity instruments
An equity instrument is any contract that evidences a
residual interest in the assets of an entity after deduction
of all its liabilities. Equity instruments issued by the
Company are recorded at the proceeds received net of
direct issue costs.
Share based payments
Where share options are awarded to employees, the fair
value of the options at the date of grant is charged to
the statement of comprehensive income on a straight-
line basis over the vesting period. Non-market vesting
conditions are taken into account by adjusting the
number of options expected to vest at each statement of
financial position date so that, ultimately, the cumulative
amount recognised over the vesting period is based
on the number of options that eventually vest. Market
vesting conditions are factored into the fair value of the
options granted. The cumulative expense is not adjusted
for failure to achieve a market vesting condition.
Where share options are cancelled due to employees
leaving the Group’s employment before they have vested,
cumulative share based payment expenses recognised
in respect of those employees are reversed through the
statement of comprehensive income.
Where share options are replaced the fair value of the
replaced options at the date of grant continues to be
recognised through the statement of comprehensive
income in addition to a charge equating to the
incremental value of the new options granted.
Fair value is calculated either using the Monte-Carlo
model or Black-Scholes model, details of which are given
in note 28.
Pensions
The pension schemes operated by the Group are
defined contribution schemes. The pension cost charge
represents the contributions payable by the Group.
Taxation and deferred taxation
Corporation tax payable is provided on taxable profits at
prevailing rates.
Deferred tax assets and liabilities are recognised where
the carrying amount of an asset or liability in the balance
sheet differs from its tax base, except for differences
arising on:
• the initial recognition of goodwill; and
• the initial recognition of an asset or liability in a
transaction which is not a business combination and at
the time of the transaction affects neither accounting
nor taxable profit.
Recognition of deferred tax assets is restricted to those
instances where it is probable that future taxable profit
will be available against which the asset can be utilised.
The amount of the asset or liability is determined using
tax rates that have been enacted or substantively enacted
by the balance sheet date and are expected to apply
when the deferred tax liabilities/(assets) are settled/
(recovered).
Deferred tax assets and liabilities are offset when the
Group has a legally enforceable right to offset current
tax assets and liabilities and the deferred tax assets and
liabilities relate to taxes levied by the same tax authority
on either:
• the same taxable Group company; or
• different Group entities which intend either to
settle current tax assets and liabilities on a net
basis, or to realise the assets and settle the liabilities
simultaneously, in each future period in which
significant amounts of deferred tax assets or liabilities
are expected to be settled or recovered.
Government grants
The Group recognises government grants when it has
reasonable assurance that it will comply with the relevant
conditions and the grant will be received.
Grants related to income are recognised in the profit and
loss account in line with the recognition of the expenses
that the grants are intended to compensate. Such grants
are presented as income and are not deducted from the
related expenditure.
Segmental reporting
Operating segments are reported in a manner consistent
with the internal reporting provided to the Executive
Directors, who are responsible for allocating resources
and assessing performance of the operating segments.
49
A business segment is a group of assets and operations,
engaged in providing products or services that are
subject to risks and returns that are different from those
of other operating segments.
A geographical segment is engaged in providing
products or services within a particular economic
environment that are subject to risks and returns that
are different from those of segments operating in other
economic environments. The Executive Directors assess
the performance of the operating segments based on
the measures of revenue, profit before taxation (PBT)
and profit after taxation (PAT). Central overheads are not
allocated to business segments.
5. CRITICAL ACCOUNTING ESTIMATES AND JUDGMENTS
In the application of the Group’s accounting policies,
which are described in note 4, the Directors are required
to make judgments, estimates and assumptions about
the carrying amounts of assets and liabilities that are not
readily apparent from other sources. The estimates and
associated assumptions are based on experience and
other factors considered to be relevant. Actual results may
differ from these estimates. The estimates and underlying
assumptions are reviewed on an ongoing basis. Revisions
to accounting estimates are recognised in the period in
which the estimate is revised if the revision affects only
that period, or in the period of the revision and future
periods if the revision affects both current and future
periods.
The following are the critical judgments and estimations
that the Directors have made in the process of applying
the Group’s accounting policies and that have the most
significant effect on the amounts recognised in the
financial statements.
Critical accounting judgments
Revenue recognition
Location Based Entertainment revenue is accounted for
on the basis that the Group acts as the principal in the
transactions between partners and customers. Gross sales
of services by partners to end customers are reported to
the Group regularly and are included within the Group’s
turnover without any deductions.
Revenue from the sale of Let’s Explore packages is
recognised on receipt of payment, which is a condition
for an order to be accepted. At each accounting date
provision is made for refunds to be made for orders
received and paid for, prior to the accounting date. This
provision is based on past experience of the level of
refund applications received.
The revenue for the sale of Uvisan products and other
hardware is recognised once the benefits and control of
these items are no longer with the Group and are instead
with the customer. Management exercise judgment to
consider when the risks have been transferred to the
customer.
Recoverability criteria for capitalisation of development
expenditure
The Group recognises costs incurred on development
projects as an intangible asset which satisfies the
requirements of IAS 38. The calculation of the costs
incurred includes the percentage of time spent by
certain employees on the development project. The
decision whether to capitalise and how to determine the
period of economic benefit of a development project
requires an assessment of the commercial viability of the
project and the prospect of selling the project to new
or existing customers. An assessment is made as to the
future economic benefits of the project and whether an
impairment is needed.
Impairment of goodwill
Impairment of the valuation of the goodwill relating
to the acquisition of subsidiaries is considered twice
annually for indicators of impairment to ensure that the
asset is not overstated within the financial statements.
The twice annual impairment assessment in respect of
goodwill requires estimates of the value in use (or fair
value less costs to sell) of subsidiaries to which goodwill
has been allocated. As a result, estimates of future cash
flows are required, together with an appropriate discount
factor for the purpose of determining the present value of
those cash flows.
R&D tax credits
Uncertainties exist in relation to the interpretation of
complex tax legislation, changes in tax laws and the
amount and timing of future taxable income. This could
necessitate future adjustments to taxable income and
expenses already recorded.
At the year-end date, tax liabilities and assets reflect
management’s judgments in respect of the application of
the tax regulations, in particular the R&D tax regulations
and management’s estimate of the future amounts that
will be settled.
In assessing the year-end tax balance, the Group has
made a provisional assessment as to the likely amount
of development expenditure that will be eligible under
HMRC’s R&D tax credit schemes.
Immotion
Group plc
Annual Report
& Accounts 2021
Notes to the Consolidated Financial Statements
for the Year Ended 31 December 2021
Critical accounting estimates
Amortisation of intangible assets
The periods of amortisation adopted to write down
capitalised intangible assets and capitalised staff costs
requires judgments to be made in respect of estimating
the useful lives of the intangible assets to determine an
appropriate amortisation rate. Capitalised development
costs are being amortised on a straight-line basis over
the period when economic benefits are expected to be
received, which has been estimated at 3 years.
Depreciation
The useful economic lives of tangible fixed assets are
based on management’s judgment and experience.
When management identifies that actual useful
economic lives differ materially from the estimates
used to calculate depreciation, that charge is added
retrospectively. Due to the significance of tangible
fixed assets to the Group, variances between actual and
estimated useful economic lives could impact on the
operating results both positively and negatively.
Share based payments expense
Non-market performance and service conditions are
included in the assumptions about the number of
options that are expected to vest. At the end of each
reporting period the Group revises its estimates of the
number of options that are expected to vest based on
the non-market vesting conditions. It recognises the
impact of the revision to the original estimates, if any, in
the consolidated statement of comprehensive income,
with a corresponding adjustment to equity. This requires
a judgment as to how many options will meet the future
vesting criteria as well as the judgments required in
estimating the fair value of the options. Where options are
cancelled, followed by the grant of new options at or close
to the time of the cancellations, a key judgment, based
on the reasons for the cancellations and the new issues, is
made as to the extent to which the new options granted
are modifications of, or replacements for, the cancelled
options, or new options.
IFRS 16 discount rates
The Group estimates an appropriate discount rate based
on an incremental rate of borrowing for the calculation of
the IFRS 16 right-of-use assets. This requires judgment as
to an appropriate discount rate.
LBE
HBE
UV
HO
Total
£’000
£’000
£’000
£’000
£’000
Revenue
6,303
2,526
477
85
9,391
Cost of sales
(3,534 )
(2,427 )
(199 )
(35 )
(6,195 )
Administrative expenses*
(912 )
(574 )
(220 )
(1,114 )
(2,820 )
Other operating income
448
57
9
18
532
Operating profit/(loss)
2,305
(418 )
67
(1,046 )
908
Amortisation
(421 )
(126 )
(8 )
(86 )
(641 )
Depreciation
(1,336 )
-
(2 )
(131 )
(1,470 )
Impairment
(2 )
(8 )
(1 )
(72 )
(82 )
Profit on disposal
18
-
-
-
18
One-off (costs) / income
(11 )
(36 )
(7 )
3
(51 )
Share based payments
-
-
-
(676 )
(676 )
Finance costs
-
-
-
(44 )
(44 )
Finance income
-
-
-
1
1
Taxation
-
-
-
38
38
Profit/(loss) for the year
553
(588 )
49
(2,013 )
(1,999 )
51
6. SEGMENTAL INFORMATION
A segmental analysis of revenue and expenditure for the year ended 31 December 2021 is below. Immotion Group Plc
changed its internal reporting during the year ended 31 December 2021 and the segmental analysis has been prepared
on a different basis to 2020. The 2020 comparative analysis has been amended in line with the segments adopted in
2021.
LBE = Location Based Entertainment
HBE = Home Based Entertainment
UV = Uvisan
HO = Head Office
*Administrative expenses exclude depreciation, amortisation, impairment, profit on disposal, one-off costs and income
and share based payments.
All operations are continuing.
LBE
HBE
UV
HO
Total
£’000
£’000
£’000
£’000
£’000
Revenue
2,075
669
62
42
2,848
Cost of sales
(1,746 )
(573 )
(22 )
(41 )
(2,382 )
Administrative expenses*
(1,298 )
(134 )
(46 )
(1,253 )
(2,731 )
Other operating income
484
-
-
91
575
Operating loss
(485)
(38 )
(6 )
(1,161 )
(1,690 )
Amortisation
(442 )
(81 )
-
(196 )
(719 )
Depreciation
(1,593 )
-
-
(158 )
(1,751 )
Impairment
(37 )
-
-
(216 )
(253 )
Loss on disposal
(35 )
-
-
-
(35 )
Restructuring costs
(77 )
-
-
(19 )
(96 )
Share based payments
-
-
-
(194 )
(194 )
Finance costs
(50 )
-
-
(32 )
(82 )
Finance income
-
-
-
2
2
Tax
-
-
-
86
86
Loss for the year
(2,719 )
(119 )
(6 )
(1,888 )
(4,732 )
Immotion
Group plc
Annual Report
& Accounts 2021
Notes to the Consolidated Financial Statements
for the Year Ended 31 December 2021
6. SEGMENTAL INFORMATION (continued)
A segmental analysis of revenue and expenditure for the year ended 31 December 2020 is below:
LBE = Location Based Entertainment
HBE = Home Based Entertainment
UV = Uvisan
HO = Head Office
*Administrative expenses exclude depreciation, amortisation, impairment, loss on
disposal, restructuring costs and share based payments.
The segmental analysis above reflects the parameters applied by the Board when
considering the Group’s monthly management accounts.
53
6. SEGMENTAL INFORMATION (continued)
The table below splits revenue, assets and capital expenditure by location:
External revenue by location
of customer
Total assets by location
Net tangible capital expenditure
by location
31 December
31 December
2021
2020
£’000
£’000
USA & Canada
6,377
1,176
United Kingdom
1,885
1,395
Australia
756
124
Rest of Europe
171
45
China
87
35
Middle East
77
73
Rest of Asia
29
-
Africa
9
-
9,391
2,848
31 December
31 December
31 December 31 December
2021
2020
2021
2020
£’000
£’000
£’000
£’000
United Kingdom
5,542
6,901
75
266
USA & Canada
1,969
1,542
340
813
Middle East
27
106
-
6
Rest of Europe
10
28
7
2
Australia
10
35
3
8
China
3
9
-
-
7,561
8,621
425
1,095
Immotion
Group plc
Annual Report
& Accounts 2021
Notes to the Consolidated Financial Statements
for the Year Ended 31 December 2021
2021
2020
Revenue by stream is split:
£’000
£’000
Location Based Entertainment
6,303
2,075
Home Based Entertainment
2,526
669
Uvisan
477
62
Head Office
85
42
9,391
2,848
2021
2020
£’000
£’000
UK & USA Government grants
503
479
Rent receivable
29
96
532
575
2021
2020
£’000
£’000
This is arrived at after charging:
Staff costs (see note 10)
3,156
2,927
Depreciation of property, plant & equipment
1,470
1,751
Amortisation of intangible fixed assets
641
719
Impairment of intangible and tangible assets
82
253
Short-term lease expense
134
102
Auditors’ remuneration
Auditors’ remuneration in respect of the Company
15
13
Audit of the Group and subsidiary undertakings
55
47
Non-audit services: review of interim accounts
12
11
82
71
7. REVENUE
8 OTHER OPERATING INCOME
9 LOSS FROM OPERATIONS
The Group had certain customers whose revenue individually represented 10% or more of the Group’s total revenue. For
the year ended 31 December 2021, two customers accounted for 24% and 18% of the revenue respectively (2020: two cus-
tomers accounted for 23% and 20% respectively).
55
9 LOSS FROM OPERATIONS (continued)
10 STAFF COSTS
Staff costs above include redundancy and other non-recurring staff costs of £88k (2020: £69k) during the year.
Staff costs above include £137k capitalised in 2021 (2020: £326k) as development costs (see note 16).
The average number of employees of the group during the year was as follows:
*Following a UK Government review of a specific area of taxation it was determined that the amount previously agreed as payable, and
paid by the group in prior years, was over-stated and the overpayment was refunded in 2021.
2021
2020
£’000
£’000
One-off costs & income
HMRC refund of employee related taxation*
(54 )
-
Business restructuring
17
16
Redundancies and other non-recurring staff costs
88
80
51
96
2021
2020
£’000
£’000
Staff costs for all employees, including Directors consist of:
Wages and salaries
2,191
2,414
Social security costs
270
293
Pensions
24
31
2,485
2,738
Share based payment charge
671
189
3,156
2,927
Number
Number
Directors
5
5
Management and administration
14
14
Retail
31
37
Operations
6
13
Sales and Marketing
7
7
Content and software development
6
10
69
86
Immotion
Group plc
Annual Report
& Accounts 2021
Notes to the Consolidated Financial Statements
for the Year Ended 31 December 2021
Directors’ detailed emoluments
Details of individual Directors’ emoluments for the year are as follows:
All pension contributions represent payments into defined contribution schemes. The principal benefits relate to health
insurance.
The Executive Directors have service contracts with the Company which are terminable by the Company or relevant
director on 6 months’ notice.
£394k of the share-based payment expense in 2021 relates to the directors (2020: £120k).
The Directors of the company on 25 April 2022 and at the statement of financial position date, and their interests in the
issued ordinary share capital of the Company as at those dates were as follows:
10 STAFF COSTS (continued)
Salary
Bonus Consultancy
Benefits
Pension
Total
Total
2021
2021
2021
2021
2021
2021
2020
£’000
£’000
£’000
£’000
£’000
£’000
£’000
M Higginson
134
-
64
8
1
207
175
D Marks
179
-
-
4
1
184
156
R Findley
107
21
-
27
-
155
147
R Miller
24
-
15
-
-
39
37
N Lee
30
-
-
-
1
31
29
474
21
79
39
3
616
544
Martin Higginson
24,026,945
5.78%
24,026,945
5.78%
24,026,945
5.87%
David Marks
10,292,663
2.48%
10,292,663
2.48%
10,292,663
2.51%
Rod Findley
10,584,349
2.55%
10,584,349
2.55%
10,584,349
2.58%
Sir Robin Miller
385,000
0.09%
385,000
0.09%
385,000
0.09%
Nicholas Lee
241,743
0.06%
241,743
0.06%
241,743
0.06%
Shares of £0.00040108663
25/04/2022
31/12/2021
31/12/2020
57
10 STAFF COSTS (continued)
Details of the options over the Company’s shares held by the directors are as follows:
Further information on share options is included in note 28.
The market price of the ordinary shares at 31 December 2021 was 5.35p with a quoted range from 1 January 2021 to 31
December 2021 of 3.51p to 7.25p.
Options held at
Exercise Price
Date of
Exercise
Type of Option
31 December 2021
£
grant
period
Martin Higginson
EMI Option
6,578,921
0.025
19/11/2020
19/11/2030
Martin Higginson
Non-Stat. Option
9,551,448
0.025
19/11/2020
19/11/2030
David Marks
EMI Option
6,578,921
0.025
19/11/2020
19/11/2030
David Marks
Non-Stat. Option
3,858,376
0.025
19/11/2020
19/11/2030
Rod Findley
Non-Stat. Option
10,437,297
0.025
19/11/2020
19/11/2030
11 FINANCE COSTS
12 FINANCE INCOME
13 TAXATION ON LOSS FROM ORDINARY ACTIVITIES
2021
2020
£’000
£’000
Other interest
27
43
IFRS 16 lease charges
17
39
44
82
2021
2020
£’000
£’000
Other interest
1
2
1
2
2021
2020
£’000
£’000
R&D tax credit
41
65
Adjustment in respect of prior periods
-
(6 )
Foreign taxation
(3 )
-
Deferred tax movement
-
27
Tax credit for the year
38
86
Immotion
Group plc
Annual Report
& Accounts 2021
Notes to the Consolidated Financial Statements
for the Year Ended 31 December 2021
The tax assessed for the year differs from the standard rate of corporation tax in the UK applied to the loss before tax.
The UK Finance Act 2021 received royal assent on 10 June 2021. This legislation maintained the UK corporation tax rate
at the same level as in the year commencing 1 April 2020 at 19% for the years commencing 1 April 2021 and 1 April 2022,
increasing the rate to 25% in the year commencing 1 April 2023.
There were unused tax losses of £14.5m at 31 December 2021 (£13.9m at 31 December 2020). No deferred tax asset has
been recognised due to the uncertainty surrounding utilisation of existing tax losses against future taxable profits.
13 TAXATION ON LOSS FROM ORDINARY ACTIVITIES (continued)
2021
2020
£’000
£’000
Loss on ordinary activities before tax
2,037
4,818
Loss on ordinary activities at the standard rate of corporation tax
in the UK of 19% (2020: 19%)
387
915
Effects of:
Fixed asset differences
(66 )
(14 )
Expenses not deductible for tax purposes
(205 )
(149 )
R&D tax credit surrenders
41
65
Adjustments to prior periods
-
(6 )
Deferred tax not recognised
(119 )
(725 )
Tax credit for the year
38
86
59
Earnings/(loss) per ordinary share has been calculated using the weighted average number of shares in issue during
the relevant financial periods. 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. Per IAS 33 the diluted EPS cannot
show an improvement on the basic EPS. As that would be the result in this case the potential ordinary shares have been
disregarded in the calculation of diluted EPS.
Adjusted loss is the loss after taxation, adjusted for share based payments, impairment charges and one-off costs and
income. Adjusted loss is a non-GAAP measure.
14 EARNINGS PER SHARE
2021
2020
£’000
£’000
The earnings per share is based on the following:
Post tax loss attributable to shareholders
(1,999 )
(4,732 )
Basic weighted average number of shares
414,140,823
356,941,188
Diluted weighted average number of shares
414,140,823
356,941,188
£0.01
£0.01
Basic loss per share
(0.48 )
(1.33 )
Diluted loss per share
(0.48 )
(1.33 )
Adjusted loss
(1,171 )
(4,189 )
Basic weighted average number of shares
414,140,823
356,941,188
Diluted weighted average number of shares
414,140,823
356,941,188
£0.01
£0.01
Basic adjusted loss per share
(0.28 )
(1.17 )
Diluted adjusted loss per share
(0.28 )
(1.17 )
Immotion
Group plc
Annual Report
& Accounts 2021
Notes to the Consolidated Financial Statements
for the Year Ended 31 December 2021
15 PROPERTY, PLANT AND EQUIPMENT
Fixtures,
IFRS 16
Leasehold
Fittings &
Right-of-use
Property
Equipment
Asset
Total
Cost
£’000
£’000
£’000
£’000
At 1 January 2020
546
3,165
1,079
4,790
Additions
50
1,019
26
1,095
Disposals
(123 )
(53 )
(284 )
(460 )
Impairment cost
(94 )
-
-
(94 )
Foreign exchange
1
(39 )
(15 )
(53 )
At 31 December 2020
380
4,092
806
5,278
At 1 January 2021
380
4,092
806
5,278
Additions
3
422
-
425
Disposals
(4 )
(1,836 )
(169 )
(2,009 )
Foreign exchange
-
21
5
26
At 31 December 2021
379
2,699
642
3,720
Accumulated depreciation
At 1 January 2020
205
1,111
342
1,658
Depreciation on owned assets
156
1,189
-
1,345
Depreciation on financed assets
-
66
340
406
Disposals
(71 )
(29 )
(166 )
(266 )
Impairment depreciation
(64 )
-
-
(64 )
Foreign exchange
-
(45 )
(16 )
(61 )
At 31 December 2020
226
2,292
500
3,018
At 1 January 2021
226
2,292
500
3,018
Depreciation on owned assets
92
1,202
-
1,294
Depreciation on financed assets
-
-
176
176
Disposals
(3 )
(1,817 )
(166 )
(1,986 )
Foreign exchange
-
24
6
30
At 31 December 2021
315
1,701
516
2,532
Net Book Value
At 31 December 2021
64
998
126
1,188
At 31 December 2020
154
1,800
306
2,260
At 31 December 2019
341
2,054
737
3,132
61
15 PROPERTY, PLANT AND EQUIPMENT (continued)
2021
2020
£’000
£’000
Tangible fixed assets owned
1,062
1,954
Tangible fixed assets subject to hire purchase and finance lease arrangements
126
306
1,188
2,260
Information about the leased assets is summarised below:
2021
2020
£’000
£’000
IFRS 16 leased property
126
306
The depreciation charge in respect of the leased assets is as follows:
2021
2020
£’000
£’000
Equipment
-
66
IFRS 16 leased property
176
340
176
406
The net book value of assets held under finance leases or hire purchase contracts, included above, is £126k (2020: £306k)
relating to VR Hardware and property leases. The depreciation charge on these assets was £175k (2020: £406k).
The net book value of owned and leased assets included in property, plant and equipment in the statement of financial
position is as follows:
Immotion
Group plc
Annual Report
& Accounts 2021
Notes to the Consolidated Financial Statements
for the Year Ended 31 December 2021
16 INTANGIBLE ASSETS
Goodwill
Other
Total
Development
Arising on
Intangible
Costs
Consolidation
Assets
Cost
£’000
£’000
£’000
£’000
At 1 January 2020
1,973
2,438
539
4,950
Additions
539
-
6
545
Impairment
(332 )
-
-
(332 )
Foreign exchange
(9 )
-
-
(9 )
At 31 December 2020
2,171
2,438
545
5,154
At 1 January 2021
2,171
2,438
545
5,154
Transfers
(4 )
-
6
2
Additions
384
-
20
404
Disposals
(6 )
-
(2 )
(8 )
Impairment
(81 )
-
(1 )
(82 )
Foreign exchange
3
-
-
3
At 31 December 2021
2,467
2,438
568
5,473
Accumulated amortisation
At 1 January 2020
508
-
422
930
Amortisation
614
-
105
719
Impairment
(109 )
-
-
(109 )
Foreign exchange
(11 )
-
-
(11 )
At 31 December 2020
1,002
-
527
1,529
At 1 January 2021
1,002
-
527
1,529
Amortisation
624
-
17
641
Transfers
(2 )
-
3
1
Disposals
(6 )
-
(1 )
(7 )
Impairment
-
-
(1 )
(1 )
Foreign exchange
5
-
-
5
At 31 December 2021
1,623
-
545
2,168
Net Book Value
At 31 December 2021
844
2,438
23
3,305
At 31 December 2020
1,169
2,438
18
3,625
At 31 December 2019
1,465
2,438
117
4,020
63
16 INTANGIBLE ASSETS (continued)
17 INVENTORIES
18 TRADE AND OTHER RECEIVABLES
Other intangible assets comprise website development and trademark costs.
Amortisation is charged on development costs and other intangible assets over periods ranging between 2 and 3 years.
Development costs have between two and three years’ remaining average useful lives.
Goodwill and impairment
The Group is obliged to test goodwill annually for impairment, or more frequently if there are indications that goodwill
and indefinite life intangibles might be impaired, due to the goodwill deemed to have an indefinite useful life. In order
to perform this test, management is required to compare the carrying value of the relevant cash generating unit (“CGU”)
including the goodwill with its recoverable amount. The recoverable amount of the CGU is determined from a value
in use calculation. It is considered that any reasonably possible changes in the key assumptions would not result in an
impairment of the present carrying value of the goodwill.
Immotion Studios Limited, C.2K Entertainment Inc. and Immotion Limited were acquired and continue to operate in
relation to the Location Based Entertainment segment. The Location Based Entertainment segment has been assessed
as a single CGU when conducting impairment reviews.
Location Based Entertainment
The recoverable amount of the Location Based Entertainment segment has been determined from a review of the
current and anticipated performance. In preparing these projections, a discount rate of 10% (based on the Group’s
weighted average cost of capital) has been applied to forecast earnings for 2022 and 2023 and subjected to sensitivity
analysis. The discount rate was based on the Company’s cost of capital as estimated by management.
Inventories recognised in cost of sales during the year was £589k (2020: £196k). The Directors consider that no impairment
of inventory is necessary as at 31 December 2021 (2020: £Nil).
The fair values of trade and other receivables equate to their carrying values. The Group makes no provision of expected
credit losses as no losses are expected.
2021
2020
£’000
£’000
Inventory
103
152
103
152
31 December
31 December
2021
2020
£’000
£’000
Trade receivables
836
102
Prepayments and accrued income
708
595
Other receivables
217
67
Tax recoverable
22
65
1,783
829
Immotion
Group plc
Annual Report
& Accounts 2021
Notes to the Consolidated Financial Statements
for the Year Ended 31 December 2021
19 CONTRACT ASSETS
20 CASH AND CASH EQUIVALENTS
21 LIABILITIES
31 December
31 December
2021
2020
£’000
£’000
Accrued income
83
91
31 December
31 December
2021
2020
£’000
£’000
Cash at bank
1,099
1,664
1,099
1,664
31 December
31 December
2021
2020
£’000
£’000
Current liabilities
Trade payables
548
594
Social security and other taxes
95
149
Accruals
352
263
Other payables
108
147
Trade and other payables
1,103
1,153
Loans
130
175
Hire purchase and lease liabilities
171
231
1,404
1,559
Non-current liabilities
Loans
155
160
Hire purchase and lease liabilities
4
176
159
336
65
22 CONTRACT LIABILITIES
Contract liabilities comprise payments in advance of revenue recognition and revenue deferred due to contract
performance obligations not being completed. They are classified as current liabilities if the contract performance
obligations are due to be completed within one year or less. All of these liabilities are expected to be recognised in the
subsequent financial year. All amounts were invoiced in the period and realised in the subsequent financial year.
2021
2020
£’000
£’000
Contract liabilities
278
12
23 LOANS
The Group has the following loan arrangements in place as at 31 December 2021:
SBA Economic Injury Disaster Loan
An agreement dated 3 July 2020 was completed between the subsidiary C.2K Entertainment, Inc., and the Bank of
America, for a loan of $150,000 under the USA Government’s Small Business Administration (SBA) Disaster Loan Scheme,
to assist with recovery from the effects of the COVID-19 pandemic. Repayments are due to commence on 8 January 2023.
This loan is secured, interest is charged at a fixed rate of 3.75% pa, and repayment of the loan in full is due by 8th July 2050.
The liability at 31 December 2021 was $158k (£117k), including interest.
Paycheck Protection Program (2021)
An agreement dated 13 March 2021 was completed between the subsidiary C.2K Entertainment, Inc., and the Bank
of America, for a loan of $160,580 advanced under the USA Government’s Paycheck Protection Program, a program
designed to assist USA businesses to recover from the effects of the COVID-19 pandemic. Under the program, loaned
funds used to cover payroll and certain other expenses are forgiven and do not need to be repaid. On 26 January 2022 the
company received confirmation from the Small Business Administration Department of the USA Government that the
loan had been forgiven in full, inclusive of all interest charges. At 31 December 2021 the balance payable, including interest,
is included in current liabilities in the sum of $161,860 (£120k). As full forgiveness of this loan was confirmed on 26 January
2022 as a result of conditions complied with during 2021, $161,860 (£120k) is included within receivables at 31 December
2021. This is an unsecured loan.
Bounce Back Loan Scheme
An agreement dated 28 August 2020 was completed between Immotion Group Plc and Coutts & Co., for a loan of £50,000
to be advanced on 9 September 2020 under the UK Government’s Bounce Back Loan Scheme for small companies
affected by the COVID-19 pandemic. Repayments commenced on 9 December 2021 and full repayment is due by 9
September 2026 at the latest. This loan is unsecured and repayment is guaranteed by the UK Government. The liability at
31 December 2021, including interest, was £48k, of which £10k is payable in 2022 and £38k after 31 December 2022.
Immotion
Group plc
Annual Report
& Accounts 2021
Notes to the Consolidated Financial Statements
for the Year Ended 31 December 2021
23 LOANS (continued)
24 LEASES
Group as a lessee
The group has leasing arrangements for its operations.
All the lease liabilities are over right-of-use assets.
The carrying amounts and nature of right-of-use assets recognised and the movements during the period are shown in
note 15 to the accounts.
31 December
31 December
2021
2020
£’000
£’000
Amounts falling due within one year
Bank of America
-
54
Paycheck Protection Program
120
119
Bounce Back Loan Scheme
10
2
130
175
Amounts falling due after one year
SBA Economic Injury Disaster Loan
117
112
Bounce Back Loan Scheme
38
48
155
160
31 December
31 December
2021
2020
£’000
£’000
Lease liabilities are due as follows:
Within 1 year
171
216
Between 1-5 years
4
176
At 31 December 2021
175
392
31 December
31 December
2021
2020
£’000
£’000
Contractual undiscounted cash flows are due as follows:
Not later than one year
189
259
Between one year and five years
5
181
194
440
67
25 DEFERRED TAX LIABILITY
Set out below are the carrying amounts of lease liabilities and the movements during the period.
The following amounts in respect of leases, where the Group is a lessee, have been recognised in profit or loss:
2021
2020
£’000
£’000
At 1 January 2021
392
826
Additions
-
70
Interest
17
39
Payments
(234 )
(543 )
At 31 December 2021
175
392
2021
2020
£’000
£’000
Balance at 1 January
-
27
Deferred tax credit in the year
-
(27)
Balance at 31 December
-
-
2021
2020
£’000
£’000
Interest expense on lease liabilities
17
39
Expenses relating to short-term and low value leases
134
102
26 FINANCIAL RISK MANAGEMENT
The Group is exposed to risks that arise from its use of financial instruments. These financial instruments are within the
current assets and current liabilities shown on the face of the statement of financial position and comprise the following:
Credit risk
The Group is exposed to credit risk primarily on its trade receivables, which are spread over a range of different streams of
revenue. The Group maintains its cash reserves at a reputable bank. It is group policy to assess the credit risk of each new
customer before entering into binding contracts. The Group has elected not to make a provision of expected credit losses
due to its historical low incidence of bad debts.
The maximum exposure to credit risk is represented by the carrying value in the statement of financial position as shown
in note 18. The credit risk on liquid funds is considered by the directors to be low as the funds are held at a bank with a
high credit rating assigned by international credit agencies.
Immotion
Group plc
Annual Report
& Accounts 2021
Notes to the Consolidated Financial Statements
for the Year Ended 31 December 2021
26 FINANCIAL RISK MANAGEMENT (continued)
The table below illustrates the due date of trade receivables:
The table below illustrates the geographical location of trade receivables:
Cash at bank and cash equivalents
Liquidity risk
Liquidity risk arises from the Group’s management of working capital and the finance charges and repayments of its
liabilities. The Group’s policy is to ensure that it will have sufficient cash to allow it to meet its liabilities when they become
due and so cash holdings may be high during certain periods throughout the period.
Other than the loans referred to in Note 23, the Group currently has no bank borrowing or overdraft facilities. The Group’s
policy in respect of cash and cash equivalents is to limit its exposure by reducing cash holding in the operating units and
investing amounts that are not immediately required in funds that have low risk and are placed with a reputable bank.
31 December
31 December
2021
2020
£’000
£’000
Current financial assets
Trade receivables
836
102
Other receivables
217
67
Cash and cash equivalents
1,099
1,664
2,152
1,833
31 December
31 December
2021
2020
£’000
£’000
Current
498
41
30 – 59 days
164
19
60 – 89 days
141
4
90 – 119 days
-
3
120 and over
33
35
836
102
31 December
31 December
2021
2020
£’000
£’000
USA & Canada
489
25
United Kingdom
222
14
Australia
58
7
Europe
39
15
China
26
41
Middle East
2
-
836
102
31 December
31 December
2021
2020
£’000
£’000
At the year end the Group had the following cash balances:
1,099
1,664
69
26 FINANCIAL RISK MANAGEMENT (continued)
Cash at bank comprises cash deposits held within Coutts & Co and PayPal in various currencies, and US Dollar accounts
with the Bank of America.
All monetary assets and liabilities within the group are denominated in the functional currency of the operating unit in
which they are held. All amounts stated at carrying value equate to fair value.
Capital Disclosures and Risk Management
The Group’s management define capital as the Group’s equity share capital and reserves.
The Group’s objective when maintaining capital is to safeguard its ability to continue as a going concern, so that in due
course it can provide returns for shareholders and benefits for other stakeholders.
The Group manages its capital structure and makes adjustments to it in the light of changes in the business and in
economic conditions. In order to maintain or adjust the capital structure, the Group may from time to time issue new
shares, based on working capital and product development requirements and current and future expectations of the
Company’s share price.
Share capital is used to raise cash and as direct payments to third parties for assets or services acquired.
The table below illustrates the maturities of trade payables:
The table below shows the maturities of financial liabilities:
31 December
31 December
2021
2020
£’000
£’000
Financial liabilities at amortised cost
Trade payables
548
594
Finance leases & hire purchase
175
407
Loans
285
335
1,008
1,336
31 December
31 December
2021
2020
£’000
£’000
Current
291
152
30 – 59 days
142
179
60 – 89 days
7
37
90 – 119 days
2
32
120 and over
106
194
548
594
Carrying
6 months
6-12
1 or more
amount
or less
months
years
£’000
£’000
£’000
£’000
Trade payables
548
442
106
-
Finance leases
175
118
53
4
Loans
285
125
5
155
1,008
685
164
159
Immotion
Group plc
Annual Report
& Accounts 2021
Notes to the Consolidated Financial Statements
for the Year Ended 31 December 2021
26 FINANCIAL RISK MANAGEMENT (continued)
27 SHARE CAPITAL
Market risk
Interest rate risk
Interest rate risk is the risk that the value of financial instruments will fluctuate due to changes in market interest rates.
The Group considers the interest rates available when deciding where to place cash balances. The Group has borrowings
in both the USA and the UK. Borrowings require approval by the Board, and whilst this does not protect the Group from
the risk of paying excess rates, the Board can ensure the Group are achieving competitive rates.
Foreign currency risk
Foreign exchange transaction risk arises when individual Group operations enter into transactions denominated in a
currency other than the functional currency. The main potential areas of exposure are: (i) trading of the Group’s US based
subsidiaries, C.2K Entertainment Inc. and Let’s Explore Inc.; and (ii) capital expenditure in US Dollars. Surplus US Dollars
generated can be used to fund US Dollar denominated capital expenditure for the Group, helping to mitigate
currency risk.
Shares issued during the year ended 31 December 2021:
Cash received does not include costs relating to share issues. In the year to 31 December 2021, costs of £15k were incurred
relating to share issues and these costs were charged against share premium.
31 December
31 December
2021
2020
£’000
£’000
Called up share capital
Allotted, called up and fully paid
415,538,083 Ordinary shares of 0.040108663 pence each
166
164
(2020: 409,538,083 ordinary shares)
No. of
Price per
Gross share
Cash
Date
Description
shares
share
value
received
£
£
£
At 31 December 2020
409,538,083
21,690,582
18,475,346
26 March 2021
Placing on AIM
6,000,000
0.05
300,000
300,000
At 31 December 2021
415,538,083
21,990,582
18,775,346
71
28 SHARE BASED PAYMENTS
In order to incentivise and reward employees the Group has a share option scheme, originally established in 2018, for key
employees. During 2021, options over 1.8m ordinary shares were granted to one key employee. No options over ordinary
shares were exercised in the year.
Further details following provide:
• the number of share options in issue at 31 December 2021 by year of issue,
• the key assumptions used for calculating the 2021 share based payment expense for each type of option in issue,
• the 2021 expense for each of the share option types in issue.
Summary of all options in issue
2018 Options
Number
Unexpired options at 1 January 2021 and 31 December 2021
947,333
The unexpired options over ordinary shares at 31 December 2021 were all issued to Group employees who are no longer
employed by the Group. The type of options and the principles and assumptions employed in the valuation of the 2018
options are as follows.
Time Based Shares
These options over Ordinary shares have been valued using the Black-Scholes pricing model. The share options vested
fully on 12 July 2021, three years after the grant date. For valuation purposes the judgment made in the model was that all
participants would exercise their right to sell their shares a year after they fully vested.
Expected volatility has been determined by reference to the fluctuations in the Group’s share price between the formation
of its current group structure and the grant date of the share options.
2021
2021
2020
2020
Options
Weighted
Options
Weighted
Ave. Exercise
Ave. Exercise
Price
Price
At start of period
56,929,200
2.6p
8,414,083
10.0p
Granted
1,800,000
5.4p
55,981,867
2.5p
Surrendered
-
-
(7,066,750 )
10.0p
Cancelled
-
-
(400,000 )
10.0p
At end of period
58,729,200
2.7p
56,929,200
2.6p
Exercisable at period end
26,987,860
2.8p
409,332
10.0p
Expected Period of Award
2 years
3 years
4 years
Share price at grant
12p
12p
12p
Exercise price
10p
10p
10p
Expected volatility
53.6%
55.4%
57.1%
Risk free rate
0.74%
0.75%
0.89%
Immotion
Group plc
Annual Report
& Accounts 2021
Notes to the Consolidated Financial Statements
for the Year Ended 31 December 2021
28 SHARE BASED PAYMENTS (continued)
EBITDA Condition Shares
These options have been valued using the Black-Scholes pricing model. Vesting conditions include the requirement for
the company to achieve a specified EBITDA target.
Expected volatility has been determined by reference to the fluctuations in the Group’s share price between the formation
of its current group structure and the grant date of the share options.
Share Price Condition Shares
These options have been valued using the Monte Carlo pricing model. Vesting conditions include the requirement for the
company to achieve a specified share price.
Vesting date
Number of
Estimated
2021 charge
unexpired options
fair value
£’000
12 July 2019
204,665
4.7p
-
12 July 2020
204,667
5.5p
-
12 July 2021
204,667
6.2p
11
11
Expected Period of Award
2.97 years
3.97 years
Share price at grant
12p
12p
Exercise price
10p
10p
Expected volatility
55.3%
57.0%
Risk free rate
0.75%
0.88%
Expected Period of Award
2.97 years
3.97 years
Share price at grant
12p
12p
Exercise price
10p
10p
Expected volatility
55.3%
57.0%
Risk free rate
0.75%
0.88%
Option type
Number of
Estimated
2021 charge
unexpired options
fair value
£’000
Year 2 EBITDA target
166,667
6.2p
13
13
73
28 SHARE BASED PAYMENTS (continued)
Expected volatility has been determined by reference to the fluctuations in the Group’s share price between the formation
of its current group structure and the grant date of the share options
The amount charged in 2021 of £35k on the 2018 Scheme options includes £31k in respect of options that were
surrendered on 19 November 2020 and replaced by new options issued the same day – details below.
Option type
Number of
Estimated
2021 charge
unexpired options
fair value
£’000
Year 2 share price target
166,667
5.2 p
11
11
Vesting date
Number of
Estimated
2021 charge
unexpired options
fair value
£’000
19 November 2021
3,479,099
2.32p
71
71
2020 options
Number
Unexpired options at 1 January 2021 and 31 December 2021
55,981,867
Time Based Shares
These options over ordinary shares have been valued using the Black-Scholes pricing model. The share options in issue
vest 1 year after the grant date. For valuation purposes the judgment made in the model was that all participants would
exercise their right to sell their shares a year after they have fully vested.
Expected Period of Award
2 years
Share price at grant
4.40p
Exercise price
2.50p
Expected volatility
61.0%
Risk free rate
0.00%
Expected volatility has been determined by reference to the historic share price volatilities of comparable listed
companies.
Immotion
Group plc
Annual Report
& Accounts 2021
Notes to the Consolidated Financial Statements
for the Year Ended 31 December 2021
28 SHARE BASED PAYMENTS (continued)
Share Price Condition Shares
These options have been valued using the Monte Carlo pricing model. Vesting conditions include the requirement for the
company to achieve a specified share price.
Expected volatility has been determined by reference to the historic share price volatilities of comparable listed
companies.
It was agreed by the company’s Remuneration Committee, that 2,530,250 Year 3 share price target options and 2,530,250
Year 4 share price target options, issued on 19 November 2020 to a key employee, should vest on 14 December 2021. These
options have consequently been revalued using the Black-Scholes pricing model. For valuation purposes the judgment
made in the model was that the exercise of the right to sell the shares would occur in the year after the options had fully
vested.
Expected volatility has been determined by reference to the historic share
price volatilities of comparable listed companies.
Expected Period of Award
2 years
Share price at grant
4.40p
Exercise price
2.50p
Expected volatility
61.0%
Risk free rate
0.00%
Expected Period of Award
1 year
3 years
4 years
Share price at grant
4.4p
4.4p
4.4p
Exercise price
2.5p
2.5p
2.5p
Expected volatility
71.0%
66.0%
63.0%
Risk free rate
0.0%
0.0%
0.0%
Option type
Number of
Estimated
2021 charge
unexpired options
fair value
£’000
5p share price target
17,500,920
2.07p
321
7.5p share price target
14,970,670
1.57p
78
10p share price target
14,970,670
1.34p
50
449
2021 options
Number
Unexpired options at 1 January 2021
-
Options issued in the period
1,800,000
Unexpired options at 31 December 2021
1,800,000
Time Based Shares
These options over ordinary shares have been valued using the Black-Scholes pricing model. The share options in issue
vest 1 year after the grant date. For valuation purposes the judgment made in the model was that all participants would
exercise their right to sell their shares a year after they have fully vested.
Expected Period of Award
4 years
Share price at grant
5.40p
Exercise price
5.40p
Expected volatility
61.0%
Risk free rate
0.49%
Expected volatility has been determined by reference to the historic share price volatilities of comparable listed
companies.
Vesting date
Number of
Estimated
2021 charge
unexpired options
fair value
£’000
29 November 2022
600,000
1.11p
1
29 November 2023
600,000
1.11p
-
29 November 2024
600,000
1.11p
-
1
75
28 SHARE BASED PAYMENTS (continued)
Vesting date
Number of
Estimated
2021 charge
unexpired options
fair value
£’000
14 December 2021
5,060,500
2.32p
115
115
Immotion
Group plc
Annual Report
& Accounts 2021
Notes to the Consolidated Financial Statements
for the Year Ended 31 December 2021
28 SHARE BASED PAYMENTS (continued)
29 RESERVES
31 RELATED PARTY TRANSACTIONS
30 CAPITAL COMMITMENTS
Warrants
In 2018, the Group issued warrants over 1,488,500 Ordinary shares. These warrants have been valued using the Black-
Scholes pricing model. 677,000 of these warrants expired on 31 December 2019 leaving a balance at 31 December 2021 of
811,500 unexpired warrants.
Full details of movements in reserves are set out in the consolidated statement of changes in equity. The following
describes the nature and purpose of each reserve within owners’ equity:
Share premium: Amount subscribed for share capital in excess of nominal value.
Retained earnings: Cumulative net gains and losses recognised in the consolidated statement of comprehensive income.
Foreign exchange reserve: Reserve arising on translation of the Group’s overseas subsidiaries.
At 31 December 2021 and 31 December 2020 there were no capital commitments.
Date of grant
12 July 2018
Share price at grant date
10p
Expected volatility
34%
Risk free rate
0.74%
Expected volatility has been determined by reference to the fluctuations in the Group’s share price between the formation
of its current group structure and the grant date of the warrants. A charge of £5k has been included in the year ended 31
December 2021.
Purchases/liabilities
Name of related party
Services
Relationship
M Capital Investment Properties Ltd
Consultancy
Related party owned and controlled by a director of
Immotion Group Plc
Robin Miller Consultants Ltd
Consultancy
Related party owned and controlled by a director of
Immotion Group Plc
Digitalbox Publishing Ltd
Office and staff
Directors and shareholders of Immotion Group Plc
were also directors and shareholders of Digitalbox Plc,
the parent company of Digitalbox Publishing Limited
Huddled Group Ltd
Fulfilment and postage
Related party partially owned and controlled by a
director of Immotion Group Plc
77
31 RELATED PARTY TRANSACTIONS (continued)
32 POST BALANCE SHEET EVENTS
Income/receivables
Name of related party
Services
Relationship
David Marks
Loans
D Marks is a director of Immotion Group Plc
Martin Higginson
Loan
M Higginson is a director of Immotion Group Plc
*Short term advance repaid in full.
**Short term advance to cover expenditure paid on the Group’s behalf.
The key management personnel are considered to be the Board of Directors. Their remuneration is disclosed in detail in
note 10. Key management were remunerated £616k (2020: £544k) in the year ended 31 December 2021.
The key management held 37m of share options realising a charge of £394k (2020: £120k) in the year.
As outlined in the Chairman’s Statement, the Board has taken the decision to divest the Group’s non-core Home Based
Entertainment and Uvisan divisions. The terms and timing of the disposals are yet to be confirmed and as such the Board
cannot be certain that the plan won’t be significantly changed or withdrawn. This decision is considered to be a non-
adjusting post balance sheet event as it was made subsequent to 31 December 2021.
Expensed in the year
Amounts in receivables
2021
2020
2021
2020
£’000
£’000
£’000
£’000
M Capital Investment Properties Limited
64
122
-
4
Robin Miller Consultants Ltd
15
15
1
1
Digitalbox Publishing Limited
-
2
-
-
Huddled Group Ltd
40
88
8
16
119
227
9
21
Interest Charged
Amounts in receivables
2021
2020
2021
2020
Income invoiced to related parties
£’000
£’000
£’000
£’000
David Marks – Immotion Studios Ltd
-
-
16
16
David Marks – Immotion Group PLC*
-
-
17
-
Martin Higginson**
-
-
32
-
-
-
65
16
33 SUBSIDIARY UNDERTAKINGS
Ranger Rob UK Limited, company number 09511044, Immotion Limited, company number 11054174, and Vodiac Limited,
company number 13676998, were exempt from undergoing an audit for year ended 31 December 2021 by virtue of S479A
of Companies Act 2006.
Immotion
Group plc
Annual Report
& Accounts 2021
Company Statement of Financial Position
as at 31 December 2021
The Company has taken advantage of the exemptions allowed under section 408 of the Companies Act 2006 and has
not presented its income statement in these financial statements. The Group loss for the year included a loss on ordinary
activities after tax of £870k (2020: £3,983k) in respect of the Company which is dealt with in the financial statements of the
Parent Company.
The financial statements were approved by the Board and authorised for issue on 25 April 2022
The notes on pages 81 to 85 form part of the Company financial statements.
Martin Higginson
Chief Executive Officer
At 31 December
At 31 December
2021
2020
Restated
£’000
£’000
Fixed assets
Investments
III
3,321
3,245
Intangible fixed assets
IV
7
4
3,328
3,249
Current assets
Trade and other receivables
V
5,908
4,562
Cash and cash equivalents
VI
515
1,185
6,423
5,747
Payables: amounts falling due
within one year
VII
(801 )
(127 )
Net current assets
5,622
5,620
Payables: amounts falling due in
more than one year
VIII
(38 )
(48 )
Total assets less total liabilities
8,912
8,821
Capital and reserves
Called up share capital
166
164
Share premium account
20,556
20,273
Retained reserves
(11,810 )
(11,616 )
Shareholders’ funds
8,912
8,821
David Marks
Group Finance Director
79
Company Statement of Changes in Equity
for the Year Ended 31 December 2021
Share
Share
Retained
Total
Capital
Premium
Reserves
Equity
£’000
£’000
£’000
£’000
Balance at 1 January 2020
115
15,310
(7,827 )
7,598
Issue of shares
49
5,352
-
5,401
Issue costs deducted from equity
-
(389 )
-
(389 )
Loss after tax
-
-
(3,983 )
(3,983 )
Share based payments
-
-
194
194
Balance at 31 December 2020
164
20,273
(11,616 )
8,821
Issue of shares
2
298
-
300
Issue costs deducted from equity
-
(15 )
-
(15 )
Loss after tax
-
-
(870 )
(870 )
Share based payments
-
-
676
676
Balance at 31 December 2021
166
20,556
(11,810 )
8,912
The notes on pages 81 to 85 form part of the Company financial statements.
Immotion
Group plc
Annual Report
& Accounts 2021
Company Statement of Cash Flows
for the Year Ended 31 December 2021
Year ended
Year ended
31 December 2021
31 December 2020
Restated
£’000
£’000
Cash flows from operating activities
Loss before tax
(870 )
(3,983 )
Adjustments for:
Share based payments
600
62
Amortisation of intangible assets
4
21
Finance costs
3
-
Cash flows from operating activities
before changes in working capital
(263 )
(3,900 )
Increase in trade and other receivables
(1,346 )
(301 )
Increase in trade and other payables
666
2
Cash used in operations
(943 )
(4,199 )
Investing activities
Purchase of intangible assets
(7 )
(1 )
Net cash used in investing activities
(7 )
(1 )
Financing activities
Finance costs
(3 )
-
New loans advanced
-
50
Loan repayments
(2 )
-
Issue of new share capital
300
5,401
Costs on issue of shares
(15 )
(389 )
Net cash from financing activities
280
5,062
Net (decrease)/increase in cash and cash equivalents
(670 )
862
Cash and cash equivalents at beginning of the period
1,185
323
Cash and cash equivalents at end of the period
515
1,185
Reconciliation of net cashflow to movement in net debt:
Net (decrease)/increase in cash and cash equivalents
(670 )
862
New loans
-
(50 )
Movement in net funds in the year
(670 )
812
Net funds at 1 January
1,185
323
Net funds at 31 December
515
1,185
The notes on pages 81 to 85 form part of the Company financial statements.
31 December 2021
31 December 2020
Restated
£’000
£’000
Subsidiary undertakings
Cost
Balance at 1 January
3,245
3,113
Additions
76
132
Balance at 31 December
3,321
3,245
Provisions
Balance at 1 January
-
-
Balance at 31 December
-
-
Carrying value of investments
3,321
3,245
81
Notes Forming Part of the Company Financial Statements
for the Year Ended 31 December 2021
I. ACCOUNTING POLICIES
The separate financial statements of the Company are presented as required by the Companies Act 2006. As permitted
by the Act the separate financial statements have been prepared in accordance with International Financial Reporting
Standards as adopted by the United Kingdom. The principal accounting policies adopted are the same as those set out in
note 4 to the consolidated financial statements except as noted below:
Foreign currency risk
Investments in subsidiaries are stated at cost less any provision for impairment in value.
II. OPERATING LOSS
The auditor’s remuneration for audit and other services is disclosed in note 9 to the consolidated financial statements.
The average number of employees of the company during the year was 9 (2020: 8) and total staff costs were £653,735
(2020: £504,403). Directors’ remuneration is disclosed in note 10 to the consolidated financial statements. Share based
payments for employees in 2021 were £671k (2020: £189k).
The Company operating loss is stated after a provision of £448k (2020: £3,707k) against amounts due from other group
companies. The provision carried forward at 31 December 2021 was £11,509k (£11,061k at 31 December 2020).
III. FIXED ASSET INVESTMENTS
Investment additions relate to share based payment expenses for employees of subsidiary companies, who have been
issued options over equity of the parent company. The 2020 comparative figures have been restated in the year for
the allocation in prior years’ of these expenses (£132,000), which has resulted in an increase in the carrying value of
investments as at 31 December 2020. The reduction in share based payment expense has been offset equally by an
increase in the provision against amounts due from group undertakings, meaning profit, net assets and reserves have
not been affected by this adjustment.
Immotion
Group plc
Annual Report
& Accounts 2021
Notes Forming Part of the Company Financial Statements
for the Year Ended 31 December 2021
At the year end, the Company had the following direct subsidiaries:
Subsidiary name
Class of Shares
Proportion of
Registered office
ownership
C.2K Entertainment Inc.
Ordinary
100%
1067 Gayley Avenue, Los Angeles,
California, CA 90024, USA
Immotion Limited
Ordinary
100%
Kingswood House, South Road,
Kingswood, Bristol, England,
BS15 8JF
Immotion Studios Limited
Ordinary
100%
Kingswood House, South Road,
Kingswood, Bristol, England,
BS15 8JF
Let’s Explore Media Limited
Ordinary
100%
Kingswood House, South Road,
Kingswood, Bristol, England,
BS15 8JF
Uvisan Limited
Ordinary
100%
Kingswood House, South Road,
Kingswood, Bristol, England,
BS15 8JF
Vodiac Limited
Ordinary
100%
Kingswood House, South Road,
Kingswood, Bristol, England,
BS15 8JF
At the year end, the Company had the following indirect subsidiaries:
Subsidiary name
Class of Shares
Proportion of
Registered office
ownership
Immotion VR Limited
Ordinary
100%
Kingswood House, South Road,
Kingswood, Bristol, England,
BS15 8JF
Let’s Explore Inc.
Ordinary
100%
9, E. Loockerman Street, Suite 311,
Dover, Delaware, 19901, USA
Ranger Rob UK Limited
Ordinary
100%
Kingswood House, South Road,
Kingswood, Bristol, England,
BS15 8JF
83
Subsidiary name
Principal activity
C.2K Entertainment Inc
Location Based Entertainment
Immotion Limited
Intermediate holding company
Immotion Studios Limited
Virtual reality content, software design and development
Immotion VR Limited
Location Based Entertainment
Let’s Explore Inc.
In home virtual reality equipment and experiences
Let’s Explore Media Limited
In home virtual reality equipment and experiences
Ranger Rob UK Limited
Group subsidiary with limited trading
Uvisan Limited
Disinfecting equipment
Vodiac Limited
Dormant company
The Company is obliged to review investment values annually for impairment. In order to perform this test, management
is required to compare the carrying value of the relevant cash generating unit (“CGU”) with its recoverable amount. The
recoverable amount of the CGU is determined from a value in use calculation. It is considered that any reasonably possible
changes in the key assumptions would not result in an impairment of the present carrying value of the investments.
The recoverable amount of each subsidiary has been determined from a review of the current and anticipated performance of
the business segment to which it serves or was originally acquired to serve. In preparing this projection, a discount rate of 10%
(based on the weighted average cost of capital) has been applied to forecast earnings for 2022, 2023 and 2024. The discount
rate was based on the Company’s cost of capital as estimated by management.
Total
£’000
Software Cost
At 1 January 2021
67
Additions
7
At 31 December 2021
74
Accumulated amortisation
At 1 January 2021
63
Amortisation charge
4
At 31 December 2021
67
Net Book Value
At 31 December 2021
7
At 31 December 2020
4
IV. INTANGIBLE FIXED ASSETS
31 December 2021
31 December 2020
£’000
£’000
Loan – Coutts & Co.
38
48
Details of this loan are contained in note 23 to the consolidated financial statements.
Immotion
Group plc
Annual Report
& Accounts 2021
Notes Forming Part of the Company Financial Statements
for the Year Ended 31 December 2021
V. RECEIVABLES: due within one year
VI. CASH AND CASH EQUIVALENTS
31 December 2021
31 December 2020
Restated
£’000
£’000
Amounts owed by group undertakings
5,788
4,462
Other receivables
19
27
Prepayments and accrued income
101
73
5,908
4,562
31 December 2021
31 December 2020
£’000
£’000
Cash at bank and in hand
515
1,185
515
1,185
31 December 2021
31 December 2020
£’000
£’000
Trade payables
51
50
Accruals
28
38
Other tax and social security
19
36
Other payables
2
1
Amounts owed to group undertakings
691
-
Loan – Coutts & Co.
10
2
801
127
VII. PAYABLES: amounts falling due within one year
VIII. PAYABLES: amounts falling due in more than one year
85
IX. SHARE CAPITAL
Details of the Company’s share capital and the movements in the period can be found in Note 27 to the consolidated
financial statements.
X. SHARE OPTIONS
Details of the share options outstanding at 31 December 2021 can be found in Note 28 to the consolidated financial
statements.
XI. RESERVES
Details of the reserves can be found in Note 29 to the consolidated financial statements.
XII. RELATED PARTY TRANSACTIONS
Details of the Company’s related party transactions can be found in Note 31 to the consolidated financial statements.
XIII. POST BALANCE SHEET EVENTS
Details of post balance sheet events can be found in Note 32 to the consolidated financial statements.
Immotion
Group plc
Annual Report
& Accounts 2021
Directors, Secretary And Advisors
Directors
Rodney Findley
Martin Higginson
Nicholas Lee
David Marks
Sir Robin Miller
Comapany Secretary and Registered Office
Daniel Wortley
Immotion Group Plc
Cumberland Court
80 Mount Street
Nottingham
England
NG1 6HH
Company Number
10964782
Registrars
Neville Registrars Limited
Neville House
Steelpark Road
Halesowen
B62 8HD
Nominated Advisor and Broker
WH Ireland Limited
24 Martin Lane
London
EC4R 0DR
Joint Broker
Shard Capital Partners LLP
23rd Floor
20 Fenchurch Street
London
EC3M 3BY
Joint Broker
Alvarium Capital Partners Limited
1st Floor, 10 Old Burlington Street
London
W1S 3AG
Independent Auditors
Haysmacintyre LLP
10 Queen Street Place
London
EC4R 1AG
87
Solicitors
Freeths LLP
3rd Floor
100 Wellington Street
Leeds
LS1 4LT
Country of Incorporation of Parent Company
England and Wales
Legal Form
Public Limited Company
Domicile
United Kingdom
Immotion
Group plc
Annual Report
& Accounts 2021
Section Title