Registration number 03904195
Asia Digital Holdings PLC
Annual Report and Accounts 2012
asia digital holdings PLC
annual report and accounts 2012
table of contents
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03
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06
08
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14
21
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25
26
45
47
49
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57
60
Chairman’s statements
Directors and advisers
Corporate governance
Report on remuneration
Report of the directors
Independent auditor’s report
Accounting policies (consolidated financial statements)
Consolidated income statement
Consolidated statement of comprehensive income
Consolidated balance sheet
Consolidated cash flow statement
Consolidated statement of changes in equity
Notes to the consolidated financial statements
Independent auditor’s report (parent company)
Accounting policies (parent company financial statements)
Company balance sheet
Notes to the company financial statements
Notice of annual general meeting
Financial calendar
asia digital holdings PLC
annual report and accounts 2012
chairman’s statement
I am pleased to present the Group’s final results for the 15 months ended 31 March 2012.
Operational Review
The Group operated two business units during the 15 months to 31 March 2012: DGM and AKTIV, both
intermediary operations in the digital advertising space.
DGM delivers customers for global brands on a success-based payment model. Typically delivery is through
websites (or networks of sites) that are willing to promote an advertiser’s product on a success fee basis, or
through search engines such as Baidu, Google, Bing, Yahoo. During the period DGM operated mainly in India,
Southeast Asia and China.
AKTIV is a digital advertising sales house that represents media owners, selling their advertising space to global
agencies, and offering its customers administrative and commercial economies of scale. The AKTIV business
unit operated mainly in Southeast Asia, and was discontinued in April 2011 as a result of persistent losses.
Review of Trading
The Group’s continuing operations, mainly the DGM operations in Singapore and China, showed a material
increase in gross margin to 37%, up from 18% in the previous reporting period. As a result, the continuing
operations delivered a gross profit of £0.61 million during the financial period (year to 31 December 2010: £0.56
million). This is in spite of a material reduction in revenues to £1.67 million (year to 31 December 2010: £3.09
million).
In an increasingly competitive environment our operations in India showed growth in sales and profitability
leveraging a strong market position. The operation delivered consistently positive contributions through the
reporting profit. Notwithstanding the absence of incremental investment, the India was the only operation to
deliver a positive contribution during the period at £0.25 million (year to 31 December 2010: £0.02 million).
Under a new managing director, DGM Singapore made progress in client wins including CMC Markets, Far East
Hospitality Group as well as affiliate marketing appointments for The Economist and Expedia. However, whilst
the operation achieved an improved market positioning, it continued to be loss making.
Progress in China has been much slower and more strategically challenging than expected since the
establishment of the Company office there in 2010. Throughout 2010 and early 2011, the Group operated in
China with one or two members of staff, predominantly servicing the Dell account. The Board was confident that
the Dell business could grow on the back of a significantly increased budget and targets for 2012 leading to a self
funded expansion of that office. Unfortunately that failed to materialise. Accordingly, the operation was
discontinued in June 2012.
Working Capital
The Group’s overheads have been kept under control as a result of material cost savings achieved and reported
previously. Administrative expenses from continuing operations for the period showed a material reduction to
£1.71 million (year to 31 December 2010: £3.01 million). The overall cost savings were predominantly driven by a
reduction in central costs to £0.80 million for the period (year to 31 December 2010: £2.25 million).
The material reduction in the central cost base as well as marginal operational improvements, led to a material
reduction in the loss from continuing operations to £1,14 million (year to 31 December 2010: £2.79 million).
However, the net trading loss in the period has led to further deterioration of the working capital position during
the period.
As a result the Board announced in December 2011 that it would complete a strategic review. The Board
concluded that the operations of the Group have been materially constrained by an inability to grow the
businesses by investing in technology, the operating teams and the marketing of ADH’s business offerings.
In the absence of the required funding to finance the growth of the Group’s operations to a profitable position, the
sale of its more established operations in India and Singapore along with the closure of the Chinese operation
would enable the Group to become an investing company and subject to additional funding, pursue acquisitions
with the potential to generate a return for shareholders that would not otherwise be the case.
asia digital holdings PLC
annual report and accounts 2012
1
chairman’s statement
This strategy was approved at a meeting of the shareholders on 28th May 2012 along with an investment policy
to focus on investing in businesses which, in the opinion of the Board possess the opportunity for high growth.
The main focus for identifying such businesses will be in the communications, energy, resources, precious
metals, commodity trading and infrastructure sectors, in diverse geographic locations including Europe and North
America.
Prospects and Strategy
On 4 April 2012, the Group announced that it had entered into an agreement for the sale of the issued share
capital of DGM India and related agreements for a total consideration of Rupees 33,500,000 (approximately
£412,409) and on 17 April 2012, it announced that it had entered into a conditional agreement for the sale of the
DGM Singapore Assets for a total consideration of US$250,000 (approximately £158,228). The Group’s Chinese
operation ceased operations in May 2012.
The sale of DGM India completed in July 2012 with all consideration received by 10th July 2012.
The DGM Singapore assets transaction completed in June 2012 with all consideration received by 30th June
2012.
The balance sheet of the Group, though improved by receipt of the above consideration, will require further
funding to execute its investment policy.
In order to enable the Group to execute its investment policy, the Directors are endeavouring to seek additional
long term funding.
The Board would like to express its gratitude to the shareholders and staff who have supported us during the
period, and would like to emphasis our commitment to delivering shareholder value.
David Lees
Chairman
2 November 2012
asia digital holdings PLC
annual report and accounts 2012
2
directors and advisers
David Lees, ACA
Non-Executive Chairman
David is a qualified chartered accountant with many years’ experience in the public company arena. He has been
a founding director of several public companies (such as Medeva Plc, SkyePharma Plc and Names.co Internet
Plc) and a director of many other successful companies. He is currently a director of Kea Petroleum plc, Metis
Biotechnologies Plc, Network Estates Limited and Accident Exchange Group Plc.
Adrian Moss, ACA
Chief Executive Officer
From a Pricewaterhouse accountancy background, Adrian founded a digital advertising business in Europe in
1999, launching the UK’s first affiliate network provider. In 2003 he extended the company's offering by launching
a banner advertising network and a search engine marketing business. The business reverse acquired leading
Search Engine Marketing specialist Ibnet PLC to obtain its listing on the London Stock Exchange in 2003.
Keith Lassman, LLB, MSI
Non-Executive Director
Keith is a senior partner in the corporate finance department of London law firm, Howard Kennedy. Keith brings
considerable experience to the Board in a broad range of corporate finance transactions including acquisitions,
disposals and capital raising. He is also a non-executive chairman of Tasty plc (whose shares are traded on
AIM), deputy chairman of the EIS Association and a member of the Securities Institute.
Directors
David Lees
Non-Executive
Chairman
Adrian Moss
Chief Executive
Officer
Keith Lassman
Non-Executive
Director
Company Secretary
Registered office
19 Cavendish Square
London W1A 2AW
Nominated advisers and brokers
Northland Capital Partners
Limited
(formerly Astaire Securities plc)
46 Worship Street
London EC2A 2EA
Registrars
Capita Registrars
The Registry
34 Beckenham Road
Beckenham
Kent BR3 4TU
Auditors
Grant Thornton UK LLP
Grant Thornton House
Melton Street
Euston Square
London NW1 2EP
Solicitors
Howard Kennedy
19 Cavendish Square
London W1A 2AW
Bankers
Barclays Bank plc
27 Soho Square
London W1D 3QR
asia digital holdings PLC
annual report and accounts 2012
3
corporate governance
for the 15 months ended 31 March 2012
The Company is committed to applying the highest principles of corporate governance commensurate with its
size.
Compliance
As the Company is listed on AIM, it is not required to comply with the provisions set out in the Combined Code
prepared by the Committee on Corporate Governance, nor is it required to comment on its compliance with such
provisions.
However, the following information is provided, which describes how the principles of corporate governance are
applied by the Company.
Directors
The Company supports the concept of an effective Board leading and controlling the Group. The Board is
responsible for approving Group policy and strategy and meets regularly. Executive management supplies the
Board with appropriate and timely information and the Directors are free to seek any further information they
consider necessary. All Directors have access to advice from the Company Secretary and independent
professionals at the Company’s expense. Training is available for new Directors and other Directors as
necessary.
The Board consists of one Director, who holds a key operational position in the Company, and two Non-
Executive Directors, who bring a breadth of experience and knowledge. This provides a balance whereby an
individual or small group cannot dominate the Board’s decision making. The two Non-Executive Directors have
interests in shares of the Company and hold share options, as set out in note 4 to the financial statements. The
Non-Executive Directors have each considered their independence in light of the above interests and other
business relationships as laid out in note 18 to the financial statements. The Directors and the Board as a whole
consider that these factors do not impinge upon their objectivity or independence and so all Non-Executive
Directors are considered to be independent from the Group and management.
The Chairman of the Board is David Lees. The Board members are described on page 3 to the financial
statements. All Directors are subject to re-election every three years and at the first Annual General Meeting
(AGM) after their appointment. The Board has not appointed a Nomination Committee.
Relations with shareholders
The Company values the views of its shareholders and recognises their interest in the Company’s strategy and
performance, Board membership and quality of management. It therefore holds regular meetings with its
institutional shareholders to discuss objectives.
The AGM is used to communicate with investors and they are encouraged to participate. The Chairman of the
Audit and Remuneration Committees is available to answer questions. Separate resolutions are proposed on
each issue so that they can be given proper consideration and there is a resolution to approve the annual report
and accounts. The Company counts all proxy votes and will indicate the level of proxies lodged on each
resolution after it has been dealt with by a show of hands.
Accountability and audit
The Board presents a balanced and understandable assessment of the Group’s position and prospects in all
interim and price-sensitive reports and reports to regulators, as well as in the information required to be
presented by statutory requirements.
The Audit Committee meets as required and comprises David Lees (Chairman) and Keith Lassman, both of
whom are independent Non-Executive Directors. The terms of reference of the Committee include keeping under
review the scope and results of external audits and their cost effectiveness. The Committee reviews the
independence and objectivity of the external auditor. This includes reviewing the nature and extent of non-audit
services supplied by the external auditor to the Group, seeking to balance objectivity and value for money.
Internal controls
The Board is responsible for maintaining a sound system of internal controls to safeguard both the shareholders’
investment and the Group’s assets.
The Board has reviewed its risk management framework and identified areas where procedures need to be
changed or installed.
The Board has considered the need for an internal audit function but has decided that the size of the Group does
not justify this at present. However, it will keep the decision under review. The Board has reviewed the operation
and effectiveness of the Group’s system of internal control for the financial period and the period up to the date of
approval of the financial statements.
asia digital holdings PLC
annual report and accounts 2012
4
corporate governance
for the 15 months ended 31 March 2012
Internal controls continued
The Directors are responsible for the Group’s system of internal control and reviewing its effectiveness. The
system of internal control is designed to provide reasonable, but not absolute, assurance against material
misstatement or loss.
The key features of the Group’s system of internal control are as follows:
Steps taken to ensure an appropriate control environment
The Board, acting through the Audit Committee, has put into place an organisational structure with clearly defined
responsibilities for internal financial control.
Process used to identify major business risks and to evaluate their financial implications
The identification of major business risks is carried out in conjunction with operational management and steps are
taken to mitigate or manage these risks where possible.
Major information systems that are in place
There are comprehensive financial management reporting systems in place, which involve the preparation of
detailed annual budgets by the Group and longer-term financial forecasting. The budgets are generated by the
responsible member of the management team and passed to the Board for approval. The Board monitors
performance against budget on a regular basis.
Main control procedures which address the financial implications of the major business risks
The Group maintains financial controls and procedures appropriate to the business environment conforming to
overall standards and guidelines, which are set by the Board.
Monitoring system the Board uses to check the system is operating effectively
The external auditors review the control procedures to the extent necessary for expressing their audit opinion and
report on any weakness arising during the course of their audit work. The Board has reviewed the operation and
effectiveness of the Group’s system of internal financial control for the financial period and for the period up to the
date of the approval of these financial statements.
Going concern
After making appropriate enquiries and considering certain uncertainties (described in page 15 of the financial
statements), the Directors have a reasonable expectation that the Group will have adequate resources to
continue in operational existence for the foreseeable future (in accordance with the Report of the Directors). For
this reason, they continue to adopt the going concern basis in preparing the financial statements.
David Lees
Chairman
2 November 2012
asia digital holdings PLC
annual report and accounts 2012
5
report on remuneration
for the 15 months ended 31 March 2012
Directors’ remuneration
The Board recognises that Directors’ remuneration is of legitimate concern to shareholders and is committed to
following current best practice. The Group operates within a competitive environment and its performance
depends on the individual contributions of the Directors and employees. It believes in rewarding vision and
innovation. The Board has decided to present this remuneration report for shareholder approval so that the
shareholders can approve the policy set out in this report.
Policy on Executive Directors’ remuneration
The policy of the Board is to provide an executive remuneration package designed to attract, motivate and retain
Directors of the calibre necessary to maintain the Group’s position and to reward them for enhancing shareholder
value and return. It aims to provide sufficient levels of remuneration to do this but to avoid paying more than is
necessary. The remuneration should also reflect the Directors’ responsibilities and include incentives to deliver
the Company’s objectives. The notice period for termination of the Executive Director’s service contract is 12
months.
The Remuneration Committee has responsibility for making recommendations to the Board on the Company’s
general policy on executive remuneration and also specific packages for individual Directors. It carries out the
policy on behalf of the Board.
The membership of the Committee is as follows:
• David Lees (Chairman); and
• Keith Lassman.
David Lees and Keith Lassman are independent Non-Executive Directors. Neither of them have any personal
financial interest in the matters to be decided (other than as shareholders, share option holders and those
disclosed in note 18 to the financial statements), potential conflicts of interest arising from cross-directorships nor
any day-to-day involvement in running the business.
The Committee meets as required to determine executive remuneration policy.
Main elements of executive remuneration
There are four main elements of the Executive Director’s remuneration package:
i.
ii.
iii.
iv. pension contributions.
fees;
annual bonus payments;
share-based payments; and
Fees
The Executive Director’s basic salary is reviewed by the Committee. In deciding upon appropriate levels of
remuneration, the Committee believes that the Group should offer average levels of base pay reflecting individual
responsibilities compared to similar jobs in comparable companies, as well as internal factors such as
performance.
Annual bonus payments
The Committee establishes the objectives which must be met for a bonus to be paid. A performance related
award scheme incorporating audited earnings per share, share price performance and Group profitability has
been established which recognises the success of the business for which the Executive Director is responsible.
Bonus payments are non-pensionable.
Share-based payments
The interests of Directors in the Company’s share options and shares are detailed in notes 4 and 18 to the
financial statements.
Pension contributions
All pension entitlements for the Directors are disclosed in note 4 to the financial statements.
Non-Executive Directors
The Board as a whole determines the remuneration of the Non-Executive Directors.
Non-Executive Directors do not have contracts of service but letters of appointment.
asia digital holdings PLC
annual report and accounts 2012
6
report on remuneration
for the 15 months ended 31 March 2012
Details of Directors’ remuneration
This report should be read in conjunction with notes 4 and 18 to the financial statements, which also form part of
this report. Full details of all elements of the remuneration package of each Director are given in note 4 to the
financial statements, together with details of Directors’ share interests.
David Lees
Chairman of the Remuneration Committee
2 November 2012
asia digital holdings PLC
annual report and accounts 2012
7
report of the directors
for the 15 months ended 31 March 2012
The Directors present their report together with the financial statements for the 15 months ended 31 March 2012.
Principal activity
The Group is principally engaged in the provision of online marketing services. The Group became an investment
company in July 2012 following the disposal and closure of its then existing operations.
Business review
A review of the business during the period and an indication of likely future developments are found in the
Chairman’s statement.
The loss for the financial period after taxation amounted to £920,000 (year to 31 December 2010: £1,339,000
profit). In view of the historic losses and the lack of distributable reserves, the Directors cannot recommend
payment of a dividend.
Future developments
An indication of likely future developments is found in the Chairman’s statement in pages 1 to 2.
Key performance indicators (KPIs)
Measuring performance is integral to the next phase of our strategic growth. Management has selected KPIs to
benchmark to the Group’s progress. Management considers revenue, gross profit and profit before tax as KPIs in
measuring Group performance.
Staff turnover and client retention are non-financial KPIs considered important to the management. Further
information on this is available in the Chairman’s statement in pages 1 to 2.
Key trading risks and uncertainties
The Group was subjected to a variety of risks and uncertainties during the 15 months to 31 March 2012. The
Board is responsible for the Group’s system of internal control and risk management and for reviewing its
effectiveness. The principal risks during the period and the actions to mitigate them are summarised below:
the Group’s operations were affected by general economic downturns. Forward-looking indicators were
•
regularly reviewed to identify deteriorating market conditions. The cost base was reviewed regularly and there
was a management structure in place to enable a rapid response to changing circumstances;
• major customer defaults giving rise to bad debts. Customer credit worthiness was regularly reviewed and the
•
•
ageing receivables were reported on a regular basis;
the Group was affected by liquidity, currency and credit risks. Financial risks were managed at Group level as
set out in note 17 to the financial statements; and
the loss of key clients. Management always reviewed the Group’s reliance on key clients, and measures to
diversify were always explored.
As at July 2012, the Group has no actively trading operations. This followed a decision by the Board, which was
subsequently approved by shareholders, to dispose or close all operations. The company is now considered an
investing company, and the new investment policy was approved by shareholders at a general meeting held on
28 May 2012. The Company is also required to implement the investment policy within 12 months by making an
acquisition.
In order to enable the Company to implement its investment policy, the Directors are endeavouring to seek
additional long term funding.
Directors
The Directors of the Company and their interests in the shares of the Company at the start of the period, or when
appointed, and at the end of the period, or on resignation, are set out in note 4 to the financial statements.
In accordance with the terms of the Company’s Articles of Association, Keith Lassman will retire and will offer
himself for re-election at the AGM.
Payment policy
It is the Group’s policy to agree the terms of payment with each supplier whenever it has satisfied that the
supplier has provided goods and services in accordance with the agreed terms and conditions. Creditor days at
the period end was to 121 days (31 December 2010: 132 days) of average supplies for the period.
Financial risk management objectives and policies
The Directors constantly monitor the financial risks and uncertainties facing the Group with particular reference to
the exposure to price, currency, credit, liquidity and cash flow risk. They are confident that suitable policies are in
place and that all material financial risks have been considered. More detail is given in note 17 to the financial
statements.
asia digital holdings PLC
annual report and accounts 2012
8
report of the directors
for the 15 months ended 31 March 2012
Substantial shareholders
At 25 July 2012 the following had notified the Company of disclosable interests in 2% or more of the nominal
value of the Company’s shares, save for the Directors whose interests are disclosed in note 4 to the financial
statements:
I-Spire Corporation
William De Broë
JO Hambro Capital Management UK Growth Fund
J Dennis
Philip Naughton
Shareholding
1,032,372
840,576
300,000
250,000
231,538
%
13.44
10.95
3.91
3.26
3.02
A proposed capital reorganisation was approved at a General Meeting held on 28 May 2012. Further details are available in note 20 to the
financial statements. Shareholdings have been restated to reflect the effect of the capital reorganisation.
Going concern
The Group’s business activities, together with the factors likely to affect its future development, performance and
position are set out in the Chairman’s statement on pages 1 to 2. The financial position of the Group, its cash
flows, liquidity position and borrowing facilities are described in the Chairman’s statement on page 1. In addition,
pages 4 to 5 include the Group’s objectives, policies and processes for managing its capital; note 17 to the
financial statements includes its financial risk management objectives, details of its financial instruments and its
exposures to credit risk and liquidity risks.
The Group made losses during the 15 months of 31 March 2012 of £920,000 (year to 31 December 2010:
£1,339,000 profit). At period end the cash balance (including cash held in the disposal group) was £147,000 (31
December 2010: £538,000), with net liabilities of £879,000 (31 December 2010: £91,000 net assets).
The Group received the final consideration from the disposal of its Australia based subsidiary during the period.
The gross consideration received was £663,000. After settling certain costs related to the transaction, the Group
received £375,000 which was used to service its ongoing working capital requirements.
The Group also completed the sale of its 20.6% shareholding in DC Storm Limited, a software development
company based in the UK, in August 2011. The transaction generated cash resources of £194,500 (£200,000
gross consideration less transaction costs), which provided additional working capital for the Group.
Following a strategic review, which was announced in December 2011, and in the view of the continued working
capital difficulties faced by the Group, the Board resolved that it would be in the best interests of shareholders to
close the Group’s trading operations, and to this end, to dispose of the Group’s two main operations, DGM India
Internet Marketing Private Limited (“DGM India”) and DGM Asia Pacific Private Limited (“DGM Singapore”).
The sale of DGM India was completed in July 2012. The net cash generated from the transaction (after
transaction costs) was £324,000.
The Group completed the sale of selected assets of DGM Singapore in June 2012 to Flow Digital Private Limited
(“Flow Digital”), a subsidiary of Omnicom Media Group. The actual cash received from the transaction was
£75,352, after Flow Digital retained certain amounts relating to prepayments made previously to the Group by
transferring clients, employee costs relating to transferring employees to be settled by Flow Digital, and certain
legal fees settled directly by Flow Digital on behalf of the Group.
In an attempt to improve its net asset position, the Group has also begun the liquidation and closure of certain
subsidiaries that are insolvent in Singapore, Hong Kong and China. Once finalised, the liquidations in Asia are
expected to result in an improvement in the Group’s balance sheet of about £512,000.
asia digital holdings PLC
annual report and accounts 2012
9
report of the directors
for the 15 months ended 31 March 2012
Going concern continued
As the effect of the disposal of DGM India and selected assets of DGM Singapore, as well as the closure of the
Group’s China operation, has been to divest the parent company of its trading businesses and activities, this
constitutes a fundamental change of business under Rule 15 of the AIM Rules. As a result, the parent company
has been treated as an Investing Company, following the approval of the Investment Policy at a General Meeting
held on 28 May 2012 and the completion of the sale of selected assets of DGM Singapore. The Company is now
required to implement the Investment Policy, or otherwise make an acquisition or acquisitions which constitute a
reverse takeover under Rule 14 of the AIM Rules, within twelve months of obtaining consent from shareholders.
In order to enable the Company to execute its investment policy, the Directors are endeavouring to seek
additional long term funding.
The Directors have concluded that material uncertainties that cast significant doubt upon the ability of the
Company to continue as a going concern exist. Nevertheless, after making enquiries, and considering the
uncertainties, the Directors have a reasonable expectation that the Company will have adequate resources to
continue in operational existence for the foreseeable future. Accordingly, they adopt the going concern basis in
preparing the annual report and accounts.
Directors’ responsibilities statement
The Directors are responsible for preparing the Report of the Directors 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 as adopted by the European Union (IFRS) and Company financial statements under United Kingdom
Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable laws). 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 and profit or loss of the company and 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 applicable IFRS have been followed, subject to any material departures disclosed and
explained in the financial statements; and
• prepare the financial statements on the going concern basis unless it is inappropriate to presume that the
Company will continue in business.
The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain
the company’s transactions and disclose with reasonable accuracy at any time the financial position of the
company and enable them to ensure that the financial statements comply with the Companies Act 2006 and
Article 4 of the IAS Regulation. They are also responsible for safeguarding the assets of the Company and hence
for taking reasonable steps for the prevention and detection of fraud and other irregularities.
Insofar as each of the Directors is aware:
•
•
there is no relevant audit information of which the Company’s auditors are unaware; and
the Directors have taken all steps that they ought to have taken to make themselves aware of any relevant
audit information and to establish that the auditors are aware of that information.
The Directors are responsible for the maintenance and integrity of the corporate and financial information
included on the Company’s website. Legislation in the United Kingdom governing the preparation and
dissemination of financial statements may differ from legislation in other jurisdictions.
To the best of my knowledge:
•
the group financial statements, prepared in accordance with the applicable set of accounting standards, give
a true and fair view of the assets, liabilities, financial position and profit or loss of the Company and the
undertakings included in the consolidation taken as a whole; and
the management report includes a fair review of the development and performance of the business and the
position of the Company and the undertakings included in the consolidation taken as a whole, together with a
description of the principal risks and uncertainties that they face.
•
asia digital holdings PLC
annual report and accounts 2012
10
report of the directors
for the 15 months ended 31 March 2012
Auditors
Grant Thornton UK LLP has expressed their willingness to continue in office and a resolution that they be re-
appointed will be proposed at the AGM in accordance with Section 489(1) of the Companies Act 2006.
On behalf of the Board
Adrian Moss
Chief Executive Officer
2 November 2012
asia digital holdings PLC
annual report and accounts 2012
11
independent auditor’s report
to the members of asia digital holdings PLC
We have audited the Group financial statements of Asia Digital Holdings PLC for the 15 months ended 31 March
2012 which comprise the consolidated income statement, consolidated statement of comprehensive income,
consolidated balance sheet, consolidated cash flow statement, consolidated statement of changes in equity and
the related notes. The financial reporting framework that has been applied in their preparation is applicable law
and International Financial Reporting Standards (IFRS) as adopted by the European Union.
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.
Respective responsibilities of Directors and auditors
As explained more fully in the Directors’ Responsibilities Statement set out on page 10, the Directors are
responsible for the preparation of the Group financial statements and for being satisfied that they give a true and
fair view. Our responsibility is to audit and express an opinion on the Group financial statements in accordance
with applicable law and International Standards on Auditing (UK and Ireland). Those standards require us to
comply with the Auditing Practices Board’s (APB’s) Ethical Standards for Auditors.
Scope of the audit of the financial statements
A description of the scope of an audit of financial statements is provided on the APB’s website at
www.frc.org.uk/apb/scope/private.cfm.
Opinion on financial statements
In our opinion the Group financial statements:
• give a true and fair view of the state of the Group’s affairs as at 31 March 2012 and of its loss for the period
then ended;
• have been properly prepared in accordance with IFRS as adopted by the European Union; and
• have been prepared in accordance with the requirements of the Companies Act 2006.
Emphasis of matter – Going concern
In forming our opinion on the financial statements, which is not modified, we have considered the adequacy of
the disclosures made in the accounting policies on page 15 of the financial statements concerning the Group’s
ability to continue as a going concern. As explained on page 15 of the financial statements, the Group’s plans to
improve its balance sheet and obtain long term funding are dependent on the ability to secure new investment,
and creditor and shareholder approvals of a Company Voluntary Agreement (CVA) in the UK. These conditions,
along with other matters explained on page 15 to the financial statements indicate the existence of a material
uncertainty that may cast significant doubt about the Group’s ability to continue as a going concern. The financial
statements do not include the adjustments that would result if the Group was unable to continue as a going
concern.
Opinion on other matter prescribed by the Companies Act 2006
In our opinion the information given in the Directors’ Report for the financial period for which the Group financial
statements are prepared is consistent with the Group financial statements.
Matters on which we are required to report by exception
We have nothing to report in respect of the following:
Under the Companies Act 2006 we are required to report to you if, in our opinion:
• 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.
asia digital holdings PLC
annual report and accounts 2012
12
independent auditor’s report
to the members of asia digital holdings PLC
Other matter
We have reported separately on the parent company financial statements of Asia Digital Holdings PLC for the
period ended 31 March 2012. That report includes an emphasis of matter.
Nicholas Page
Senior Statutory Auditor
for and on behalf of Grant Thornton UK LLP
Statutory Auditor, Chartered Accountants
Gatwick
2 November 2012
asia digital holdings PLC
annual report and accounts 2012
13
accounting policies (consolidated financial statements)
for the 15 months ended March 2012
1a Presentation of financial statements
The consolidated financial statements of the Group have been prepared in accordance with International
Financial Reporting Standards (IFRS), as adopted in the European Union and as applied in accordance with the
provisions of the Companies Act 2006, and under the historical cost convention.
Separate financial statements of the parent company have been presented on pages 45 to 56,which are
prepared in accordance with UK GAAP.
Change of financial year end
The financial year end of the Company was changed from 31 December to 31 March. The change was made to
align the start of the next accounting period with the start of the Company’s life as an investing company.
Accordingly, the current financial statements are prepared for 15 months from 1 January 2011 to 31 March 2012.
The comparative figures for the consolidated income statement, consolidated statement of comprehensive
income, consolidated cash flow statement, consolidated statement of changes in equity and related notes are for
the 12 months from 1 January 2010 to 31 December 2010.
Adoption of new and revised standards
The Group has adopted the following new interpretations, revisions and amendments to IFRS issued by the
International Accounting Standards Board, which are relevant to and effective for the Group's financial
statements:
IAS 24 “Related Party Disclosures” (amended) effective from 1 January 2011, adopted by the EU on 19
July 2010;
Annual improvements to IFRSs, containing amendments to IFRS 1, IFRS 3, IFRS 7, IAS 1, IAS 21, IAS
28, IAS 31, IAS 34, and IFRIC 13.
The adoption of these new requirements did not have any impact on the financial position or the performance of
the Group.
Standards in issue not yet effective
At the date of authorisation of these financial statements, certain new standards, amendments and interpretations
to existing standards applicable to the Group have been published but are not yet effective, and have not been
adopted early by the Group.
IFRS 10 “Consolidated Financial Statements” effective from 1 January 2013, is not yet adopted by the EU. It
introduces a new, principle-based definition of control which will apply to all investees to determine the scope of
consolidation.
IFRS 13 “Fair Value Measurement” effective from 1 January 2013, is not yet adopted by the EU. It defines fair
value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction
between market participants at the measurement date. The Standard clarifies that fair value is based on a
transaction taking place in the principal market for the asset or liability or, in the absence of a principal market,
the most advantageous market. The principal market is the market with the greatest volume and level of activity
for the asset or liability.
Certain other new standards and interpretations have been issued but are not expected to have a material impact
on the Group's consolidated financial statements once adopted :
IFRS 7 “Financial Instruments: Disclosures” – Derecognition, effective from 1 July 2011, not yet adopted
by the EU
IFRS 9 “Financial Instruments” effective from 1 January 2015, not yet adopted by the EU
IFRS 11 “Joint Arrangements” effective from 1 January 2013, not yet adopted by the EU
IFRS 12 “Disclosure of Interests in Other Entities” effective from 1 January 2013, not yet adopted by the
EU
IAS 1 “Financial Statement Presentation” – Other Comprehensive Income, effective from 1 July 2012, not
yet adopted by the EU
IAS 19 “Employee Benefits” effective from 1 January 2013, not yet adopted by the EU
IAS 27 “Separate Financial Statements” (Revised) effective from 1 January 2013, not yet adopted by the
EU
asia digital holdings PLC
annual report and accounts 2012
14
accounting policies (consolidated financial statements)
for the 15 months ended March 2012
1b Going concern
The Group’s business activities, together with the factors likely to affect its future development, performance and
position are set out in the Chairman’s statement on pages 1 to 2. The financial position of the Group, its cash
flows, liquidity position and borrowing facilities are described in the Chairman’s statement on page 1. In addition,
pages 4 to 5 include the Group’s objectives, policies and processes for managing its capital; note 17 to the
financial statements includes its financial risk management objectives, details of its financial instruments and its
exposures to credit risk and liquidity risks.
The Group made losses during the 15 months of 31 March 2012 of £920,000 (year to 31 December 2010:
£1,339,000 profit). At period end the cash balance (including cash held in the disposal group) was £147,000 (31
December 2010: £538,000), with net liabilities of £847,000 (31 December 2010: £91,000 net assets).
The Group received the final consideration from the disposal of its Australia based subsidiary during the period.
The gross consideration received was £663,000. After settling certain costs related to the transaction, the Group
received £375,000 which was used to service its ongoing working capital requirements.
The Group also completed the sale of its 20.6% shareholding in DC Storm Limited, a software development
company based in the UK, in August 2011. The transaction generated cash resources of £194,500 (£200,000
gross consideration less transaction costs), which provided additional working capital for the Group.
Following a strategic review, which was announced in December 2011, and in the view of the continued working
capital difficulties faced by the Group, the Board resolved that it would be in the best interests of shareholders to
close the Group’s trading operations, and to this end, to dispose of the Group’s two main operations, DGM India
Internet Marketing Private Limited (“DGM India”) and DGM Asia Pacific Private Limited (“DGM Singapore”).
The sale of DGM India was completed in July 2012. The net cash generated from the transaction (after
transaction costs) was £324,000.
The Group completed the sale of selected assets of DGM Singapore in June 2012 to Flow Digital Private Limited
(“Flow Digital”), a subsidiary of Omnicom Media Group. The actual cash received from the transaction was
£75,352, after Flow Digital retained certain amounts relating to prepayments made previously to the Group by
transferring clients, employee costs relating to transferring employees to be settled by Flow Digital, and certain
legal fees settled directly by Flow Digital on behalf of the Group.
In an attempt to improve its net asset position, the Group has also begun the liquidation and closure of certain
subsidiaries that are insolvent in Singapore, Hong Kong and China. Once finalised, the liquidations in Asia are
expected to result in an improvement in the Group’s balance sheet of about £512,000.
As the effect of the disposal of DGM India and selected assets of DGM Singapore, as well as the closure of the
Group’s China operation, has been to divest the parent company of its trading businesses and activities, this
constitutes a fundamental change of business under Rule 15 of the AIM Rules. As a result, the parent company
has been treated as an Investing Company, following the approval of the Investment Policy at a General Meeting
held on 28 May 2012 and the completion of the sale of selected assets of DGM Singapore. The Company is now
required to implement the Investment Policy, or otherwise make an acquisition or acquisitions which constitute a
reverse takeover under Rule 14 of the AIM Rules, within twelve months of obtaining consent from shareholders.
In order to enable the Company to execute its investment policy, the Directors are endeavouring to seek
additional long term funding.
The Directors have concluded that material uncertainties that cast significant doubt upon the ability of the
Company to continue as a going concern exist. Nevertheless, after making enquiries, and considering the
uncertainties, the Directors have a reasonable expectation that the Company will have adequate resources to
continue in operational existence for the foreseeable future. Accordingly, they adopt the going concern basis in
preparing the annual report and accounts.
asia digital holdings PLC
annual report and accounts 2012
15
accounting policies (consolidated financial statements)
for the 15 months ended March 2012
1c Summary of significant accounting policies
The significant accounting policies that have been used in the preparation of these consolidated financial
statements are summarised below.
Consolidation
Subsidiaries are entities that are directly or indirectly controlled by the Group. Control exists where the Group has
the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities. In
assessing control, potential voting rights that are currently exercisable or convertible are taken into account.
The acquisition method of accounting is used to account for the acquisition of subsidiaries by the Group, in
accordance with IFRS 3. The cost of an acquisition is measured as the fair value of the assets given, equity
instruments issued and liabilities incurred or assumed at the date of exchange. Subsidiaries are consolidated
from the date control passes, until such time as control ceases.
Investments in associates
Associates are those entities over which the Group is able to exert significant influence but which are neither
subsidiaries nor joint ventures. Investments in associates are initially recognised at cost and subsequently
accounted for using the equity method. Any goodwill or fair value adjustment attributable to the Group’s share in
the associate is not recognised separately and is included in the amount recognised as investment in associates.
The carrying amount of the investments in associates is increased or decreased to recognise the Group’s share
of the profit or loss and other comprehensive income of the associate. These changes include subsequent
depreciation, amortisation or impairment of the fair value adjustments of assets and liabilities.
Unrealised gains and losses on transactions between the Group and its associates are eliminated to the extent of
the Group’s interest in those entities. Where unrealised losses are eliminated, the underlying asset is also tested
for impairment.
Amounts reported in the financial statements of associates have been adjusted where necessary to ensure
consistency with the accounting policies of the Group.
Revenue
All revenue relates to the rendering of services. Revenue is measured by reference to the fair value of
consideration received or receivable by the Group for services provided, excluding VAT (or overseas equivalents)
and trade discounts. Revenue is recognised when the services are provided by reference to the stage of
completion at the reporting date, the amount of revenue can be reliably estimated and it is probable that the
economic benefits associated with the transaction will flow to the entity. The stage of completion of service and
revenue recognition are determined by validating the service activity reports generated by in-house or third
parties tracking tools against insertion orders, purchase orders or agreements signed. The revenue is not
recognised for any incomplete and/or invalidated services at the period end.
On occasions, revenue for services is invoiced in advance of the services being provided. In such cases revenue
is deferred and subsequently recognised on completion in accordance with the criteria set out above.
Pensions
Any pension costs, or equivalent, charged against profits represents the amount of contributions payable in
respect of the accounting period.
Share-based payments
Share-based payments that are within the scope of IFRS 2 Share-based Payment have been recognised in the
financial statements in accordance with that standard. This has been applied to arrangements granted after 7
November 2002.
Where employees are rewarded using share-based payments, the fair value of employees’ services is
determined indirectly by reference to the fair value of the instrument granted to the employee. This fair value is
appraised at the grant date and, in accordance with IFRS 2, excludes the impact of non-market vesting
conditions.
Equity-settled share-based payments are recognised as an expense in the income statement in accordance with
IFRS 2 with a corresponding credit to equity.
If a service period or other non-market vesting conditions apply, the expense is allocated over the vesting period
based on the best available estimate of the number of share options expected to vest. Estimates are
subsequently revised if there is any indication that the number of share options expected to vest differs from
previous estimates. Any cumulative adjustment prior to vesting is recognised in the current period.
asia digital holdings PLC
annual report and accounts 2012
16
accounting policies (consolidated financial statements)
for the 15 months ended March 2012
1c Summary of significant accounting policies continued
Share-based payments continued
No adjustment is made to any expense recognised in prior periods of share options ultimately exercised that are
different from the number that actually vested. Upon exercise of share options, the proceeds received net of
attributable transaction costs are credited to share capital and where appropriate share premium.
Fair values of share options or awards, measured at the date of the grant of the option or award, are determined
using a binomial model methodology.
Taxation
Current tax is the tax currently payable based on taxable profit for the period.
Deferred income taxes are calculated using the liability method on temporary differences. Deferred tax is
generally provided on the difference between the carrying amounts of assets and liabilities and their tax bases.
However, deferred tax is not provided on the initial recognition of goodwill or on the initial recognition of an asset
or liability unless the related transaction is a business combination or affects tax or accounting profit. Deferred tax
on temporary differences associated with shares in subsidiaries is not provided if reversal of these temporary
differences can be controlled by the Group and it is probable that reversal will not occur in the foreseeable future.
In addition, tax losses available to be carried forward as well as other income tax credits to the Group are
assessed for recognition as deferred tax assets.
Deferred tax liabilities are provided in full, with no discounting. Deferred tax assets are recognised to the extent
that it is probable that the underlying deductible temporary differences will be able to be offset against future
taxable income. Current and deferred tax assets and liabilities are calculated at tax rates that are expected to
apply to their respective period of realisation, provided they are enacted or substantively enacted at the balance
sheet date.
Changes in deferred tax assets or liabilities are recognised as a component of tax expense in the income
statement, except where they relate to items that are recognised in other comprehensive income in which case
the related deferred tax is also charged or credited directly to equity.
Leased assets
A lease is classified as a finance lease if it transfers substantially all the risks and rewards incidental to
ownership. All other leases are classified as operating leases. Classification is made at the inception of the lease.
The Group has both finance and operating leases. Payments made under operating leases are charged to the
profit and loss account on a straight-line basis over the lease term. Finance leases are capitalised at the lease’s
commencement at the lower of the fair value of the leased property, plant or equipment and the present value of
the minimum lease payments.
Financial instruments
A financial instrument refers to a contract that gives rise to a financial asset of one entity and a financial liability or
equity instrument of another entity and is recognised on the Group’s balance sheet when the Group becomes a
party to the contractual terms of the instrument. Financial instruments include cash and deposits, trade
receivables and payables, debt and equity securities, etc.
Trade and other receivables
Trade and other receivables are recognised initially at fair value and, subsequently, measured at amortised cost
using the effective interest method, less provision for impairment. A provision for impairment of trade and other
receivables is established when there is objective evidence that the Group will not be able to collect all amounts
due according to the original terms of the receivables. Significant financial difficulties of the debtor, probability
that the debtor will enter bankruptcy or financial reorganisation and changes to debtor payment patterns are
considered indicators that the trade receivable may be impaired.
The amount of the provision is the difference between the asset’s carrying amount and the present value of
estimated future cash flows, discounted at the original effective interest rate.
Trade and other payables
Trade and other payables are not interest-bearing and are stated at their fair value on initial recognition. They are
then measured at amortised cost.
Borrowings
Borrowings are recognised at fair value, net of transaction costs incurred. They are then measured at amortised
cost. Fees paid on the settlement of loan facilities are recognised as transaction costs of the loan.
asia digital holdings PLC
annual report and accounts 2012
17
accounting policies (consolidated financial statements)
for the 15 months ended March 2012
1c Summary of significant accounting policies continued
Financial instruments continued
Provisions
Provisions are recognised when present obligations as a result of a past event will probably lead to an outflow of
economic resources from the Group and amounts can be estimated reliably. A present obligation arises from the
presence of a legal or constructive commitment that has resulted from past events.
Provisions are measured at the estimated expenditure required to settle the present obligation, based on the
most reliable evidence available at the reporting date, including the risk and uncertainties associated with the
present obligation, discounted to present value.
Cash and cash equivalents
Cash and cash equivalents include cash in hand, deposits held at call with banks that are readily convertible into
known amounts of cash and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities on
the balance sheet.
Equity instruments
Equity instruments issued by the Group are recorded at the proceeds received, net of direct costs.
Equity
Equity comprises the following:
Share capital
Capital redemption reserve
Share premium
Retained earnings
Share-based payment reserve
Translation reserve
–
–
–
–
–
–
represents the nominal value of equity shares
represents the reserve fund for shares redemption or buy-back
represents the excess over the nominal value of the fair value of
consideration for shares issued
represents the accumulated retained profits
represents the cumulative charges for share-based payments
represents the cumulative foreign exchange differences on
translating subsidiaries
Foreign currencies
The presentational currency is sterling. The parent company’s functional currency is sterling. The functional
currencies of significant subsidiaries and associated undertakings are sterling, Indian rupees, Singapore dollars
and Chinese yuan.
Transactions in foreign currencies are translated into each entity’s functional currency at the rates of exchange
prevailing on the dates of the transactions. At each balance sheet date, monetary assets and liabilities that are
denominated in foreign currencies are retranslated at the rates prevailing at the balance sheet date. Gains and
losses arising on retranslation of monetary are included in net profit or loss for the period.
On consolidation, the assets and liabilities of the Group’s overseas operations are translated at exchange rates
prevailing on the balance sheet date. Income and expense items are translated at the average exchange rates
for the period unless exchange rates fluctuate significantly. Exchange differences arising, if any, are classified as
other comprehensive income and transferred to the Group’s translation reserve. Such translation differences are
reclassified from equity to profit or loss when the gain or loss on disposal of a foreign subsidiary is recognised.
Segmental reporting
An operating segment is a component of the Group:
•
that engages in business activities from which it may earn revenues and incur expenses (including revenues
and expenses relating to transactions with other components of the Group);
• whose operating results are reviewed regularly by the Group’s chief decision maker to make decisions about
resources to be allocated to the segment and assess its performance; and
for which discrete financial information is available.
•
The main operating segment operated by the Group during the period was DGM, which is managed separately
from other segments. All inter-segment transfers are carried out at arm’s length prices. In addition, corporate
assets which are not directly attributable to the business activities of any operating segment are not allocated to a
segment. Further information on the segments is disclosed in note 1 to the financial statements.
asia digital holdings PLC
annual report and accounts 2012
18
accounting policies (consolidated financial statements)
for the 15 months ended March 2012
1c Summary of significant accounting policies continued
Discontinued operations
A discontinued operation is a cash-generating unit that either has been disposed of, or is classified as held for
sale and:
•
•
represents a separate major line of business or geographical area of operations;
is part of a single co-ordinated plan to dispose of a separate major line of business or geographical area of
operations; or
• a subsidiary acquired exclusively with a view to resale.
The disclosures for discontinued operations in the prior period relate to all operations that have been
discontinued by the balance sheet date. In line with IFRS 5, the income statement for the prior period has been
restated to disclose the loss from discontinued operation and its disposal after the loss from continuing
operations.
Non-current assets and disposal groups classified as held for sale
Non-current assets and disposal groups classified as held for sale are measured at the lower of carrying amount
and fair value less costs to sell.
Non-current assets and disposal groups are classified as held for sale if their carrying amounts will be recovered
through a sale transaction rather than through continuing use. This condition is regarded as met only when the
sale is highly probably, and the asset or disposal group is available for immediate sale in its present condition
subject only to terms that are usual or customary for sales of such assets. Management must be committed to
the sale, which should be expected to qualify for recognition as a completed sale within one year from the date of
classification as held for sale.
Property, plant, equipment and intangible assets once classified as held for sale are not depreciated.
The disposal group may include current assets, as well as current and non-current liabilities. However, only
liabilities that will be transferred as part of the transaction are classified as part of the disposal group.
If a non-current asset or disposal group has been classified as held for sale, but subsequently ceases to meet the
criteria to be classified as held for sale, the Group ceases to classify the asset or disposal group as held for sale.
Non-current assets and disposal groups that cease to be classified as held for sale are measured at the lower of
carrying amount before the asset or disposal group was classified as held for sale (adjusted for any depreciation,
amortisation or revaluation that would have been recognised has the asset or disposal group not been classified
as held for sale) and its recoverable amount on the date of the subsequent decision not to sell.
1d Accounting estimates and judgments
Significant judgments in applying the Group’s accounting polices
In the process of applying the Group’s accounting policies, management has made the following judgments that
have the most significant effect on the amounts recognised in the financial statements.
Allowance for bad and doubtful debts
The allowance for bad and doubtful debts is based on an assessment of the recoverability of trade and other
receivables. Allowances are applied to trade and other receivables where events of changes in circumstances
indicate that the balances may not be collectible. Further information on this is available in note 17 to the financial
statements.
Recognition of deferred tax assets
The Directors have also used their judgment in not recognising deferred tax assets as explained in note 5 to the
financial statements.
Estimates
Management has made a number of estimates in the recognition and measurement of assets, liabilities, income
and expenses. The estimates which may differ from actual results include the following:
Impairment
An impairment loss is recognised for the amount by which the asset’s or cash-generating unit’s carrying amount
exceeds its recoverable amount. To determine the recoverable amount, management estimates expected future
cash flows from each cash-generating unit and determines a suitable interest rate in order to calculate the
present value of those cash flows. In the process of measuring expected future cash flows management makes
assumptions about future operating results. These assumptions relate to future events and circumstances.
In most cases, determining the applicable discount rate involves estimating the appropriate adjustment to market
risk and the appropriate adjustment to asset-specific risk factors.
asia digital holdings PLC
annual report and accounts 2012
19
accounting policies (consolidated financial statements)
for the 15 months ended March 2012
1d Accounting estimates and judgments continued
Significant judgments in applying the Group’s accounting polices continued
Estimates continued
Provisions
Provisions are made if a present obligation arises as a result of a past event, payment is probable, and the
amount can be estimated reliably.
The amount recognised as a provision is the best estimate of the expenditure required to settle the present
obligation at the balance sheet, that is, the amount that would be rationally paid to settle the obligation at the
balance sheet date or to transfer it to a third party.
In reaching the best estimate, Management takes into account the risks and uncertainties that surround the
underlying events.
asia digital holdings PLC
annual report and accounts 2012
20
consolidated income statement
for the 15 months ended 31 March 2012
Continuing operations
Revenue
Cost of sales
Gross profit
Administrative expenses
– depreciation
– share-based payments
– other administrative expenses
Loss from operations
Interest received
Interest payable
Share of loss of associates
Loss before tax
Income tax
Total loss after taxation from continuing operations
Discontinued operations
Profit before tax from discontinued operations
Profit on disposal of subsidiary
Profit on disposal of associate
Income tax
Profit after tax from discontinued operations
Total (loss)/profit
Attributable to:
Equity holders of the parent
Earnings per share
Basic and diluted (loss)/earnings per share
Basic and diluted loss per share from continuing operations
Basic and diluted earnings per share from discontinued operations
Restated
15 months ended
Year ended
31 March
31 December
Notes
1
2
9
5
6
8
9
5
7
7
7
2012
£’000
1,665
(1,055)
610
(26)
(21)
(1,706)
(1,753)
(1,143)
–
(4)
–
(1,147)
(13)
(1,160)
77
–
195
(32)
240
(920)
2010
£’000
3,089
(2,533)
556
(70)
(269)
(3,005)
(3,344)
(2,788)
–
(73)
–
(2,861)
56
(2,805)
868
3,263
–
13
4,144
1,339
(920)
1,339
(11.98p)
(15.11p)
3.13p
17.44p
(36.53p)
53.96p
asia digital holdings PLC
annual report and accounts 2012
21
consolidated statement of comprehensive income
for the 15 months ended 31 March 2012
(Loss)/profit for the period
Other comprehensive income
Exchange differences on translation of foreign operations:
– (losses)/gains recognised during the period
– reclassification adjustment on disposal
Total comprehensive income for the period
Attributable to:
Equity holders of the parent
Notes
8
15 months ended
Year ended
31 March
31 December
2012
£’000
(920)
(71)
–
(991)
2010
£’000
1,339
102
512
1,953
(991)
1,953
asia digital holdings PLC
annual report and accounts 2012
22
consolidated balance sheet
as at 31 March 2012
Assets
Non-current assets
Property, plant and equipment
Current assets
Trade and other receivables
Cash and cash equivalents
Assets of disposal group classified as held for sale
Total assets
Equity and liabilities
Equity
Called up share capital
Capital redemption reserve
Share-based payment reserve
Share premium account
Translation reserve
Retained earnings
Total equity
Current liabilities
Trade and other payables
Onerous lease provisions
Corporation tax
Liabilities of disposal group classified as held for sale
Non-current liabilities
Onerous lease provisions
Total liabilities
Total equity and liabilities
Notes
10
11
16
6
13
14
12
15
6
15
31 March
31 December
2012
£’000
–
–
214
22
236
836
1,072
1,072
4,852
13,188
1,176
23,792
(72)
2010
£’000
34
34
3,112
538
3,650
–
3,650
3,684
4,852
13,188
1,155
23,792
(1)
(43,815)
(42,895)
(879)
91
1,297
42
–
1,339
612
–
1,951
1,072
3,138
215
16
3,369
–
224
3,593
3,684
These financial statements were approved by the Board, authorised for issue and signed on their behalf on 2
November 2012 by:
Adrian Moss
Chief Executive Officer
Company registration number: 03904195
asia digital holdings PLC
annual report and accounts 2012
23
consolidated cash flow statement
for the 15 months ended 31 March 2012
Operating activities
Loss before tax
Depreciation
Amortisation
Share-based payment
Increase/(decrease) in receivables
(Decrease) in payables
Foreign exchange differences
Finance expense
Tax (charge)/credit
Cash flow from operating activities in continuing operations
Cash flow from operating activities in discontinued operations
6
Total cash flow from operating activities
Investing activities
Purchase of property, plant and equipment
Consideration for disposal of subsidiary (net of cash disposed)
Consideration for disposal of associate
Cash flow from investing activities in continuing operations
Cash flow from investing activities in discontinued operations
Total cash flow from investing activities
9
6
Financing activities
Issue of ordinary share capital
Share premium on the issue of ordinary share
Issue of convertible loan notes
Repayment of convertible loan notes
Interest paid
Cash flow from financing activities in continuing operations
Cash flow from financing activities in discontinued operations
6
Total cash flow from financing activities
Net (decrease) in cash and cash equivalents
Cash and cash equivalents at start of period
Exchange differences on cash and cash equivalent
Cash and cash equivalents including cash held in disposal
group at the end of the period
Cash held in disposal group
Cash and cash equivalents at the end of the period
Cash and cash equivalents comprise:
Cash and cash in bank
Time deposits
Cash and cash equivalents at end of period
6
16
16
asia digital holdings PLC
annual report and accounts 2012
15 months ended
Year ended
31 March
31 December
Notes
2012
£’000
2010
£’000
(1,147)
(2,861)
26
–
21
886
(1,356)
(58)
4
(13)
(1,637)
397
(1,240)
(6)
664
200
858
16
874
–
–
–
–
(4)
(4)
(6)
(10)
(376)
538
(15)
147
(125)
22
22
–
22
70
–
269
(94)
(886)
78
73
56
(3,295)
989
(2,306)
(31)
2,100
–
2,069
(22)
2,047
–
–
–
(500)
(118)
(618)
(272)
(890)
(1,149)
1,617
70
538
–
538
517
21
538
24
consolidated statement of changes in equity
for the 15 months ended 31 March 2012
Balance at 1 January 2011
Share options issued in share-based payments
Issue of share capital
Transactions with owners
Profit for the period
Other comprehensive income:
– exchange difference on translation of foreign operations
Total comprehensive income for the period
Balance at 31 March 2012
Capital Share-based
Share
redemption
payment
Translation
Share
capital
£’000
4,852
–
–
–
–
–
–
premium
£’000
23,792
reserve
£’000
13,188
reserve
£’000
1,155
–
–
–
–
–
–
–
–
–
–
–
–
21
–
21
–
–
–
4,852
23,792
13,188
1,176
reserve
£’000
Retained
earnings
£’000
(1)
(42,895)
–
–
–
Total
equity
£’000
91
21
–
21
(920)
(920)
–
(920)
(43,815)
(71)
(991)
(879)
–
–
–
–
(71)
(71)
(72)
Balance at 1 January 2010
4,792
23,703
13,188
1,033
(615)
(44,234)
(2,133)
Share options issued in share-based payments
Issue of share capital
Transactions with owners
Profit for the year (Restated)
Other comprehensive income:
– historical exchange differences on translation (note 8)
– exchange difference on translation of foreign operations
Total comprehensive income for the year
Balance at 31 December 2010
–
60
60
–
–
–
–
–
89
89
–
–
–
–
–
–
–
–
–
–
–
122
–
122
–
–
–
–
4,852
23,792
13,188
1,155
–
–
–
–
512
102
614
(1)
–
–
–
122
149
271
1,473
1,473
(134)
–
1,339
(42,895)
378
102
1,953
91
asia digital holdings PLC
annual report and accounts 2012
25
notes to the consolidated financial statements
for the 15 months ended 31 March 2012
1 Revenue and segmental information
The Group is principally engaged in the provision of online marketing services. Revenue is attributable to the principal
activity, which is mainly carried out in China, India and Southeast Asia. In addition to these geographical segments,
management also considers the business from an operating segment perspective.
The main operating segment is DGM. The other operating segments, including AKTIV which was discontinued during the
reporting period, do not meet the quantitative thresholds required by IFRS 8 to be reported as separate segments.
The DGM segment is a specialist online marketing operation focusing on the delivery of customers to advertisers through
search engine marketing, affiliate and display advertising, servicing both agencies and direct clients.
An analysis of revenue and segment result by geography and operating segment is shown below:
15 months ended 31 March 2012
External revenue
All operations (£’000)
DGM
Other
Discontinued operations (£’000)
DGM
Other
Continuing operations (£’000)
DGM
Other
Continuing operations (£’000)
Continuing operations (%)
Segment result
DGM
Other
Amortisation
Depreciation
Share-based payment
Interest
Profit on disposal of subsidiary
Profit on disposal of associate
Tax
Total profit for the period
Segmental assets (£’000)
Segmental liabilities (£’000)
Major customers‡
Revenue from major customers (£’000)
China
£’000
India
£’000
SE Asia
£’000
Operating†
central
costs
£’000
Other
£’000
Holding††
company
costs
£’000
552
2,392
1,113
–
–
126
552
2,392
1,239
–
–
–
(2,392)
–
(2,392)
–
(126)
(126)
1,113
–
1,113
67
–
–
–
–
251
–
(97)
(91)
251
(188)
552
–
552
33
(256)
(9)
(265)
–
–
–
–
–
–
–
–
–
–
–
(22)
(22)
–
–
–
–
–
–
–
–
–
–
(237)
(40)
(277)
–
–
–
–
–
–
–
–
–
–
–
(518)
(518)
76
159
1
542
836
612
2
564
107
718
4
565
–
–
–
–
–
–
–
–
53
462
–
–
Total
£’000
4,057
126
4,183
(2,392)
(126)
(2,518)
1665
–
1,665
100
(339)
(680)
(1,019)
–
(26)
(21)
(4)
–
195
(45)
(920)
1,072
1,951
–
–
‡ Number of customers generating more than 10% of segment revenue.
† Included in ‘Operating central costs’ is a £47,000 provision release from prior period relating to the Group’s affiliate tracking technology
†† Included in ‘Holding company costs are leasehold provisions releases (£161,000); UK VAT provision releases (£131,000) and others (£15,000).
asia digital holdings PLC
annual report and accounts 2012
26
notes to the consolidated financial statements
for the 15 months ended 31 March 2012
1 Revenue and segmental information continued
China
£’000
India*
£’000
SE Asia
£’000
Other**
£’000
Operating†
central
costs
£’000
Holding††
company
costs
£’000
Year ended 31 December 2010 (restated)
External revenue
All operations (£’000)
DGM
Other
Discontinued operations (£’000)
DGM
Other
Continuing operations (£’000)
DGM
Other
Continuing operations (£’000)
Continuing operations (%)
Segment result
DGM
AKTIV
Other
Amortisation
Depreciation
Share-based payment
Interest
Profit on disposal of subsidiary
Tax
Total profit for the year
Segmental assets (£’000)
Segmental liabilities (£’000)
Major customers‡
456
–
456
–
–
–
456
–
456
15
(73)
–
–
(73)
503
439
1
Total
£’000
19,338
1,358
20,696
(16,249)
(1,358)
(17,607)
3,089
–
3,089
100
41
93
–
–
–
–
–
–
–
–
–
–
–
–
1,816
–
1,816
2,633
1,358
3,991
14,433
–
14,433
(1,816)
–
(14,433)
–
(1,358)
–
(1,816)
(1,358)
(14,433)
–
–
–
–
21
–
–
21
2,633
–
2,633
85
(74)
93
23
42
–
–
–
–
788
–
(110)
678
–
–
–
–
–
–
–
–
–
–
(621)
–
–
(1,628)
(1,715)
(621)
(1,628)
(1,581)
–
(70)
(269)
(73)
3,263
69
1,339
3,684
3,593
–
–
962
765
1
258
1,430
1,111
5
–
–
1
1,386
6,968
–
–
–
–
789
1,278
–
–
Revenue from major customers (£’000)
456
*
Included in India segment result is a £65,000 provision for bad debts.
** Other segment result relates to the Group’s Australian operation which was disposed during the year.
†
††
Included in “Operating central costs” are provisions relating to the decommissioning of the Group’s legacy affiliate tracking technology (£95,000) and staff
reorganisation costs (£21,000).
Included in “Holding company costs” are non-recurring staff reorganisation costs (£48,000), leasehold provisions relating to the Group’s premises in
London (£81,000) and other non-recurring provisions (£167,000).
‡
Number of customers generating more than 10% of segment revenue.
asia digital holdings PLC
annual report and accounts 2012
27
notes to the consolidated financial statements
for the 15 months ended 31 March 2012
2 Loss from operations
Loss from operations is stated after charging:
Amortisation of intangible assets
Depreciation of property, plant and equipment
Research and development expense
Auditors’ remuneration for auditing of accounts †
Auditors’ remuneration for non-audit services * †
Operating lease rentals
Lease commitment provision
Share-based payment costs
15 months ended
Year ended
31 March
31 December
2012
£’000
–
26
–
64
31
130
–
21
2010
£’000
–
76
–
65
19
276
81
269
* Auditors’ remuneration for non-audit services comprised other services relating to taxation of £31,000 (year to 31 December 2010: £19,000) and all other
services £Nil (year to 31 December 2010: £Nil).
† The £95,000 charge relating to auditors’ remuneration for auditing and non-audit services includes remuneration to the Group auditor (£61,000) and other
auditors (£34,000).
3 Staff costs
The average number of persons employed by the Group (including Directors) during the period was as follows:
Directors and senior management
Management
Non-management
Total
The aggregate payroll costs for these persons were as follows:
Aggregate wages and salaries
Social security costs
Share-based payments
Pensions costs
Aggregate wages and salaries
Social security costs
Share-based payments
Pensions costs
15 months ended
Year ended
31 March
31 December
2012
2010
6
5
44
55
8
9
80
97
15 months ended 31 March 2012
Continuing Discontinued
1,177
60
10
11
1,258
531
26
11
–
568
Year ended 31 December 2010
Continuing
Discontinued
1,347
54
245
56
2,329
165
24
–
Total
1,708
86
21
11
1,826
Total
3,676
219
269
56
1,702
2,518
4,220
asia digital holdings PLC
annual report and accounts 2012
28
notes to the consolidated financial statements
for the 15 months ended 31 March 2012
4 Directors and senior management
Directors’ remuneration
Executive
A Moss
Non-Executive
D Lees
K Lassman
Other senior management
Executive
A Moss
Non-Executive
D Lees
K Lassman
T Beattie (resigned 15 November 2010)
Other senior management
15 months ended 31 March 2012
Salary
£’000
Fees Pension
Equity
£’000
£’000
£’000
Total
£’000
260
–
–
260
324
584
–
–
–
–
–
–
11
–
–
11
–
11
–
–
–
–
–
–
271
–
–
271
324
595
Year ended 31 December 2010
Salary
£’000
Fees
Pension
£’000
£’000
Equity
£’000
Total
£’000
292
–
–
–
292
519
811
–
15
10
–
25
–
25
56
–
–
–
56
–
56
240
588
33
23
–
296
–
48
33
–
669
519
296
1,188
Directors’ and senior management’s interests in shares
The Directors who held office at 31 March 2012 had the following interests in the shares of the Company:
A Moss
D Lees
K Lassman
31 March 2012
31 December 2010
Number
of shares
995,101
121,755
57,435
%
12.96
1.59
0.75
Number
of shares
%
995,101
12.96
121,755
57,435
1.59
0.75
A proposed capital reorganisation was approved at a General Meeting held on 28 May 2012. Further details are available in note 20 to the financial statements.
Shareholdings have been restated to reflect the effect of the capital reorganisation.
Directors’ and senior management’s share options
A Moss
D Lees
K Lassman
Other senior management
Other senior management
As at
Date of grant
2012
price
period
31 March
Exercise
Exercise
April 2011
April 2011
April 2011
February 2011
January 2010
174,000
50 pence
10 years
17,500
12,500
10,000
50,000
50 pence
10 years
50 pence
10 years
50 pence
10 years
50 pence
10 years
asia digital holdings PLC
annual report and accounts 2012
29
notes to the consolidated financial statements
for the 15 months ended 31 March 2012
4 Directors and senior management continued
Directors’ and senior management’s share options continued
A Moss
D Lees
K Lassman
Other senior management
Other senior management
As at
31 December
Exercise
Exercise
Date of grant
2010
price
period
May 2008
May 2008
May 2008
May 2008
174,000 112.50 pence
17,500 112.50 pence
12,500 112.50 pence
4,000 125.00 pence
January 2010
96,000
50.00 pence
10 years
10 years
10 years
10 years
10 years
A proposed capital reorganisation was approved at a General Meeting held on 28 May 2012. Further details are available in
note 20 to the financial statements. Share options and exercise prices have been restated to reflect the effect of the capital
reorganisation.
Share options held by directions were rebased from 112.50 pence per option to 50 pence per option during the period.
Further details are available in note 18 to the financial statements. Share options held by certain members of staff were also
rebased with an exercise price of 50 pence.
All vested options held by directors and staff have an exercise period of ten years.
The market price of the ordinary shares at 31 March 2012 was 16 pence (31 December 2010: 27 pence) and the range
during the period was 103 pence to 16 pence (year to 31 December 2010: 64 pence to 21 pence).
The total share-based payment costs in respect of options granted are:
Directors
Other senior management
Non-management
5 Tax
15 months ended 31 March 2012
Current tax
UK tax
Foreign tax – adjustment in respect of current period
Deferred tax – relating to origination and reversal of temporary
differences
Tax charge
Year ended 31 December 2010
Current tax
UK tax
Foreign tax – adjustment in respect of prior period
Deferred tax – relating to origination and reversal of temporary
differences
Tax credit
asia digital holdings PLC
annual report and accounts 2012
15 months ended
Year ended
31 March
31 December
2012
£’000
10
10
1
2010
£’000
170
80
19
Continuing Discontinued
All
operations
operations
operations
£’000
£’000
£’000
–
13
13
–
13
–
32
32
–
32
Continuing Discontinued
–
45
45
–
45
All
operations
operations
operations
£’000
£’000
£’000
–
(56)
(56)
–
(56)
–
(13)
(13)
–
(13)
–
(69)
(69)
–
(69)
30
notes to the consolidated financial statements
for the 15 months ended 31 March 2012
5 Tax continued
As at 31 March 2012 the Group had unrecognised tax losses of £7,518,000 (31 December 2010: £5,568,000) of which
£3,473,000 (31 December 2010: £2,473,000) relates to the UK based parent company and £4,045,000 (31 December
2010: £3,095,000) relates to overseas operations.
The deferred tax asset relating to the losses has not been recognised due to uncertainty over the existence of future taxable
profits against which the losses can be used. In particular the UK trading losses are not expected to be used as the Group
now derives income entirely from overseas.
Tax reconciliation
(Loss)/profit before tax
Tax at 26% (2010: 28%) on loss before tax
Effects of:
Other expenses not deductible
Non-trading losses
UK substantial shareholding exemption relief
Losses carried forward to be offset against:
Future taxable trading profits
Foreign withholding tax expense/(credit)
Adjustment in respect of previous periods
Current tax expense/(credit)
Restated
15 months ended 12 months ended
31 March
31 December
2012
£’000
(875)
(228)
23
–
–
205
45
–
45
2010
£’000
1,270
356
(256)
–
(362)
262
(69)
–
(69)
6 Non-current assets held for sale and discontinued operations
The assets and liabilities related to the subsidiary DGM India Internet Marketing Private Limited (“DGM India”), stated at the
lower of carrying amount and fair value less costs to sell, have been presented as held for sale in the consolidated balance
sheet, following the approval by the Board before period end to dispose the operation. The income and expenses related to
DGM India have also been presented in discontinued operations within the consolidated income statement. The transaction
was completed in July 2012.
Income and expenses related to the AKTIV and Deploy business segments (discontinued during the current and previous
reporting periods respectively) are also presented in discontinued operations within the consolidated income statement.
In accordance with IFRS 5, income statement for the year ended 31 December 2010 has been restated.
Analysis of the result of discontinued operations is as follows:
15 months ended
Year ended
31 March
31 December
Revenue
Cost of sales
Administrative expense
(Loss)/profit before tax
Income tax (expense)/credit
(Loss)/profit after tax
asia digital holdings PLC
annual report and accounts 2012
2012
£’000
2,518
(1,646)
(795)
77
(32)
45
2010
£’000
17,607
(13,181)
(3,558)
868
13
881
31
notes to the consolidated financial statements
for the 15 months ended 31 March 2012
6 Non-current assets held for sale and discontinued operations continued
Cumulative income or expenses recognised in other comprehensive income relating to disposal group classified as held for
sale:
Foreign exchange translation differences
Total
Assets of disposal group classified as held for sale:
Property, plant and equipment
Trade and other receivables
Cash and cash equivalents
Total
15 months ended
Year ended
31 March
31 December
2012
£’000
6
6
2010
£’000
–
–
31 March
31 December
2012
£’000
7
704
125
836
2010
£’000
–
–
–
–
The assets of the disposal group have been reviewed. No impairment adjustments were made following the review.
Liabilities of disposal group classified as held for sale:
Trade payables
Other payables
Accruals and deferred income
Total
31 March
31 December
2012
£’000
574
12
26
612
2010
£’000
–
–
–
–
Cash flows from discontinued operations included in the consolidated cash flow statement are as follows:
Net cash flows from operating activities
Net cash flows from investing activities
Net cash flows from financing activities
Total cash flows
15 months ended
Year ended
31 March
31 December
2012
£’000
397
16
(6)
407
2010
£’000
989
(22)
(272)
695
7 Earnings per share
Earnings per share has been calculated on a loss after tax of £920,000 (year to 31 December 2010: £1,339,000 profit) and
the number of shares in issue for the period of 7,679,309 (31 December 2010: 7,679,309).
asia digital holdings PLC
annual report and accounts 2012
32
notes to the consolidated financial statements
for the 15 months ended 31 March 2012
7 Earnings per share continued
Reconciliation of the profit and weighted average number of shares used in the calculations are set out below:
15 months ended 31 March 2012
Continuing
Discontinued
(Loss)/profit (£’000)
Earnings per share (pence)
(1,160)
(13.65)
240
3.13
Year ended 31 December 2010 (restated)
Continuing
Discontinued
(Loss)/profit (£’000)
Earnings per share (pence)
(2,805)
(36.53)
4,144
53.96
Total
(920)
(11.98)
Total
1,339
17.44
The Group’s convertible loan which was issued in May 2009 was repaid in full in December 2010. The convertible
instruments had no dilutive effect.
Share options issued to management and staff had no dilutive effect. This is because at period end, the weighted average
exercise price of the share options exceeded the market price of 16 pence.
A proposed capital reorganisation was approved at a General Meeting held on 28 May 2012. Further details are available in
note 20 to the accounts. The number of shares used to calculate earnings per share has been restated to reflect the effect
of the capital reorganisation.
8 Disposal of subsidiary
On 22 October 2010 the Group disposed its entire shareholding in Deal Group Media Pty Limited to Sydney based Digital
Performance Group Limited (formerly Comtel Corporation Limited).
In accordance with IAS 21, the cumulative amount of exchange differences on translation of £134,000 relating to the
disposed subsidiary has been reclassified from the consolidated statement of comprehensive income, and recognised in the
consolidated income statement for the year ended 31 December 2010. As a result, the profit on disposal of the subsidiary
has been restated from £3,397,000 to £3,263,000. This adjustment has no impact on the net asset position as at 31
December 2011.
9 Disposal of associate
The Group completed the disposal of its 20.6% shareholding in DC Storm Limited (“DCS”), a company incorporated in
England and Wales with web and software development as its principal activity, in August 2011.
Gross consideration
Legal fees
Carrying value of investment
Profit on disposal
15 months ended
31 March
2012
£’000
200
(5)
–
195
The full consideration was received during the period.
The carrying value of the investment was fully impaired as at 31 December 2010.
The Group had no exposure to any liabilities related to DC Storm Limited. There are no unrecognised losses relating to the
DC Storm Limited investment.
asia digital holdings PLC
annual report and accounts 2012
33
notes to the consolidated financial statements
for the 15 months ended 31 March 2012
10 Property, plant and equipment
Furniture,
Leasehold
fittings and
improvements
equipment
£’000
£’000
339
–
(9)
330
–
–
330
325
9
(4)
330
–
–
330
–
–
Cost
At 1 January 2010
Additions
Disposals
At 1 January 2011
Additions
Disposals
At 31 March 2012
Depreciation
At 1 January 2010
Provided in the period
Disposals
At 1 January 2011
Provided in the period
Disposals
At 31 March 2012
Net book amount
At 31 March 2012
At 31 December 2010
11 Trade and other receivables
Trade receivables
Other receivables
Deferred consideration on sale of subsidiary*
Prepayments and accrued income
Total
£’000
744
35
405
35
(193)
(202)
247
6
(150)
103
293
67
577
6
(150)
433
618
76
(147)
(151)
213
26
(136)
103
–
34
543
26
(136)
433
–
34
31 March
2012
£’000
72
24
–
118
214
31 December
2010
£’000
1,494
305
657
656
3,112
* This relates to the deferred element of the consideration from the sale of the Group’s Australian operation in October 2010. The full amount was received
during the 15 months to 31 March 2012.
12 Trade and other payables
Trade payables
Social security and other taxes
Other payables
Accruals and deferred income
asia digital holdings PLC
annual report and accounts 2012
31 March
2012
31 December
2010
£’000
799
20
80
398
1,297
£’000
1,061
53
282
1,742
3,138
34
notes to the consolidated financial statements
for the 15 months ended 31 March 2012
13 Share capital
Authorised capital
9,999,520,000 ordinary shares of 0.1 pence each
76,025,157,516 deferred shares of 0.001 pence
4,083,918,156 deferred shares of 0.1 pence each
54,952,000 deferred shares of 24 pence each
Allotted, called up and fully paid capital
7,679,309 (31 December 2010: 7,679,309) ordinary shares of 0.1 pence each
76,025,157,516 deferred shares of 0.001 pence
4,083,918,156 deferred shares of 0.1 pence each
Allotments during the period
The Company allotted the following ordinary shares during the period:
Shares in issue at 1 January 2011
Shares issued during the period
Shares in issue at 31 March 2012
Shares in issue at 1 January 2010
Shares issued during the period
Shares in issue at 31 December 2010
31 March
31 December
2012
£’000
10,000
760
4,084
13,188
28,032
8
760
4,084
4,852
2010
£’000
10,000
760
4,084
13,188
28,032
8
760
4,084
4,852
15 months ended 31 March 2012
7,679,309
–
7,679,309
Year ended 31 December 2010
7,087,687
591,622
7,679,309
The unissued ordinary shares of 1 pence is subdivided into ten ordinary shares of 0.1 pence each and the issued ordinary
shares of 1 pence each is subdivided into one ordinary share of 0.1 pence each and nine deferred shares of 0.1 pence
each.
The Group’s main source of capital is the parent company’s equity shares. The policy is to retain sufficient authorised share
capital so as to be able to issue further shares to fund acquisitions, settle share-based transactions and raise new funds.
Share-based payments relate to employee share options schemes.
A proposed capital reorganisation was approved at a General Meeting held on 28 May 2012. Further details are available in
note 20 to the financial statements. The number of shares in issue has been restated to reflect the effect of the capital
reorganisation.
asia digital holdings PLC
annual report and accounts 2012
35
notes to the consolidated financial statements
for the 15 months ended 31 March 2012
14 Share-based payments
During the period 59,833 options (year ended 31 December 2010: 170,800) were issued to staff (excluding directors) at an
average fair value of 50 pence per share (year ended 31 December 2010: 50 pence).
The fair values of the options granted during the 15 months to 31 March 2012 were determined using the binomial valuation
model. The model has been applied to each issue of options incorporating the share price prevailing at the time the options
were granted.
The model takes into account a volatility rate of 175%, which has been derived from historical experience. A weighted
average risk-free interest rate of 1.92% has been applied. The weighted average share price at grant date was 43 pence
(year ended 31 December 2010: 50 pence) and the weighted average exercise price was 50 pence (year ended 31
December 2010: 50 pence).
The options were granted in accordance with the Group’s Enterprise Management Incentive Scheme. The options have
lives of ten years and vest in three equal tranches over the first three years of their lives provided the employees continue to
work for the Group. The expected lives of the options used in application of the binomial model were five years for Directors
and management staff and four years for non-management staff.
The amount of employee remuneration expense in respect of the share options granted amounts to £21,000 (year to 31
December 2010: £121,000).
The average remaining life of vested options is six years and number of options exercisable at period end is 351,617 (31
December 2010: 354,867).
The inputs to the option pricing model and the weighted average figures are as follows:
Share price at grant date (pence)
Exercise price (pence)
Expected life (years)
Annualised volatility
Risk-free interest rate
Fair value determined (pence)
Options granted
Management management
average
Non- Weighted
50
50
5
1.75
0.022
43
10,000
41
50
4
1.75
0.019
35
49,833
43
50
4
1.75
0.019
37
asia digital holdings PLC
annual report and accounts 2012
36
notes to the consolidated financial statements
for the 15 months ended 31 March 2012
14 Share-based payments continued
The general terms and conditions of the share option scheme are that the shares are issued under the Enterprise Incentive Management Scheme rules and the shares vest
equally over a three year period.
Exercise
price
(pence)
124.68
356.50
510.00
650.00
450.00
375.00
425.00
350.00
125.00
125.00
050.00
050.00
050.00
Held at
Granted
Exercised
Forfeited
Issue
31 December
date
October 2003
December 2003
April 2004
April 2004
January 2006
June 2006
September 2006
April 2007
May 2008
February 2009
January 2010
February 2011
April 2011
2010
2,516
3,000
300
250
5,000
7,500
333
9,651
138,550
91,167
168,300
–
–
426,567
during
Year
during
year
during
year
–
–
–
–
–
–
–
–
–
–
–
10,000
49,833
59,833
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
(4,333)
(30,667)
–
–
(35,000)
Lapsed
during
year
Cancelled
during
year
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
(333)
(17,500)
(32,334)
–
–
–
(50,167)
Held at
31 March
2012
2,516
3,000
300
250
5,000
7,500
333
9,318
121,050
54,500
137,633
10,000
49,833
401,233
The above table excludes Directors’ options.
Options forfeited in the period are in respect of employees leaving the employment of the Group.
asia digital holdings PLC
annual report and accounts 2012
37
notes to the consolidated financial statements
for the 15 months ended 31 March 2012
14 Share-based payments continued
Exercise
price
(pence)
124.68
356.50
510.00
650.00
450.00
375.00
425.00
350.00
125.00
125.00
050.00
Held at
Granted
Exercised
Forfeited
Issue
31 December
date
October 2003
December 2003
April 2004
April 2004
January 2006
June 2006
September 2006
April 2007
May 2008
February 2009
January 2010
2009
2,516
3,000
300
250
5,000
7,500
666
9,651
126,050
98,500
–
253,433
during
year
during
year
during
year
–
–
–
–
–
–
–
–
12,500
–
170,800
183,300
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
(333)
–
–
(333)
(2,500)
(3,166)
Lapsed
during
year
–
–
–
–
–
–
–
–
–
(7,000)
–
(7,000)
Cancelled
Held at
during
31 December
year
–
–
–
–
–
–
–
–
–
–
–
–
2010
2,516
3,000
300
250
5,000
7,500
333
9,651
138,550
91,167
168,300
426,567
The above table excludes Directors’ options.
Options forfeited in the year are in respect of employees leaving the employment of the Group.
A proposed capital reorganisation was approved at a General Meeting held on 28 May 2012. Further details are available in note 20 to the financial statements. Share options
and exercise prices have been restated to reflect the effect of the capital reorganisation.
asia digital holdings PLC
annual report and accounts 2012
38
notes to the consolidated financial statements
for the 15 months ended 31 March 2012
15 Onerous lease provisions
The Group has made the following operating and financial lease provisions:
At 1 January 2011
Additions
Utilisation
At 31 March 2012
Analysis of total provision is:
Within one year
More than one year and within five years
Operating
Finance
All
leases
£’000
415
–
(373)
42
leases
£’000
24
–
(24)
–
leases
£’000
439
–
(397)
42
Operating
Finance
All
leases
£’000
42
–
42
leases
£’000
leases
£’000
–
–
–
42
–
42
The operating lease provision was made for the office lease, service charges and business rates which were
entered into in October 2003 for a ten year lease at the former office in London, UK.
The finance lease provision of £24,000 relating to computer equipment required to maintain the Group’s affiliate
tracking technology, was reversed at period end as it is no longer probable that an outflow of resources will be
required to settle the obligation.
In addition, the Group had outstanding commitment for future minimum lease payments under non-cancellable
operating leases for office and housing premises:
Lease payments to be made:
– within one year
– after one year and within five years
16 Cash and cash equivalents
Cash and cash equivalents comprise the following:
Cash and cash in bank:
Chinese yuan
Hong Kong dollar
Indian rupee
Pound sterling
Singapore dollar
US dollar
Time deposits
US dollar
Cash and cash equivalents at end of period
asia digital holdings PLC
annual report and accounts 2012
31 March
31 December
2012
£’000
95
–
2010
£’000
40
493
31 March
31 December
2012
£’000
2010
£’000
3
1
–
4
2
12
22
–
–
22
10
4
56
218
44
185
517
21
21
538
39
notes to the consolidated financial statements
for the 15 months ended 31 March 2012
17 Financial instruments
The Group uses various financial instruments which include cash and cash equivalents and various items such
trade receivables and trade payables that arise directly from its operations. The main purpose of these financial
instruments is to raise finance for the Group’s operations and manage its working capital requirements.
The fair values of all financial instruments are considered equal to their book values. The existence of these
financial instruments exposes the Group to a number of financial risks which are described in more detail
overleaf.
The main risks arising from the Group financial instruments are currency risk, credit risk and liquidity risk. The
Directors review and agree the policies for managing each of these risks and they are summarised overleaf. The
Group has a sales ledger facility on which interest is charged at a variable rate. The Directors, therefore, do not
consider the Group to be exposed to material interest rate risk.
Currency risk
The Group is exposed to transaction foreign exchange risks.
Foreign currency denominated financial assets and liabilities, translated into sterling at the closing rate, are as
follows:
As at 31 March 2012
Financial assets
Financial liabilities
Short-term exposure
As at 31 December 2010 (Restated)
Financial assets
Financial liabilities
Short-term exposure
India
Singapore
rupee
£’000
836
(612)
224
India
rupee
£’000
962
(765)
197
dollar
£’000
107
(718)
(611)
Singapore
dollar
£’000
1,348
(1,068)
280
Other
£’000
76
(159)
(83)
Other
£’000
551
(445)
106
The following table illustrates the sensitivity of the net results for the period and equity in regards to the Group’s
financial assets and financial liabilities and the sterling/Singapore dollar exchange rate.
It assumes a +/– [5]% change of the exchange rates for the period ended 31 March 2012 (31 December 2010:
5%). This percentage has been determined based on the average market volatility in exchange rates in the
previous 12 months. The sensitivity analysis is based on Asia Digital Holdings PLC’s foreign currency financial
instruments held at each balance sheet date.
5% strengthening of sterling
Net results for the period
Equity
5% weakening of sterling
Net results for the period
Equity
Singapore
dollars
£’000
33
29
Singapore
Dollars
£’000
(37)
(32)
Exposures to foreign exchange rates vary during the period depending on the volume of overseas transactions.
Nonetheless, the analysis above is considered to be representative of the Group’s exposure to currency risk.
The Group incurs costs in the same currencies as it earns revenue, creating some degree of natural hedging, but
is exposed to the foreign currency exposure in the payment of Singapore based and London based central costs,
as well as in the consolidation of the figures into sterling.
asia digital holdings PLC
annual report and accounts 2012
40
notes to the consolidated financial statements
for the 15 months ended 31 March 2012
17 Financial instruments continued
Credit risk
The Group’s exposure to credit risk is limited to the carrying amount of financial assets recognised at the balance
sheet date, as summarised below:
Classes of financial assets – carrying amounts
Cash and cash equivalents
Trade receivables
31 March
31 December
2012
£’000
22
72
94
2010
£’000
538
1,494
2,032
In order to manage credit risk the Directors set limits for customers based on a combination of payment history
and third party credit references. Credit limits are reviewed by the credit controller on a regular basis in
conjunction with debt ageing and collection history.
The Group’s management considers that all of the above financial assets that are not impaired for each of the
reporting dates under review are of good credit quality, including those that are past due.
None of the Group’s financial assets are secured by collateral or other credit enhancements.
The exposure of the Group to overdue receivables and the concentration of these debtors are as follows:
Trade receivables
Of which provided
31 March 2012
31 December 2010
Within
terms
£’000
50
–
50
Overdue
£’000
28
(6)
22
Within
terms
£’000
1,002
–
1,002
Overdue
£’000
632
(140)
492
The amount overdue for one month is £23,000 (31 December 2010: £288,000), two to four months is £1,000 (31
December 2010: £220,000), for five to six months £0 (31 December 2010: £65,000) and for more than six months
£4,000 (31 December 2010: £59,000).
Changes in the bad debts provision are as follows:
As at 1 January 2010
Additions
Utilisation
As at 1 January 2011
Additions
Utilisation
As at 31 March 2012
Debtor concentration
Largest client
Others
Five largest clients
Others
asia digital holdings PLC
annual report and accounts 2012
Total
£’000
116
121
(97)
140
–
(134)
6
31 March 2012
31 December 2010
£’000
16
56
72
%
22
78
100
£’000
177
1,317
1,494
%
12
88
100
31 March 2012
31 December 2010
£’000
45
27
72
%
62
38
100
£’000
552
942
1,494
%
37
63
100
41
notes to the consolidated financial statements
for the 15 months ended 31 March 2012
17 Financial instruments continued
Liquidity risk
The Group maintains sufficient cash and availability of funding through an adequate amount of committed credit
facilities to meet its liquidity requirements. Management monitors rolling forecasts of the Group’s liquidity on the
basis of expected cash flow. This is generally carried out at Group level for the operating companies of the Group
in accordance with practice and limits set by the Group. In addition, the Group’s liquidity management policy
involves projecting cash flows in major currencies and considering the level of liquid assets necessary to meet
these.
Maturity analysis for financial liabilities
Trade payables
Other payables
Lease commitments provision
31 March 2012
31 December 2010
Within Later than
Within
Later than
1 year
£’000
1 year
£’000
799
80
42
921
–
–
–
–
1 year
£’000
1,061
2,093
215
3,369
1 year
£’000
–
–
224
224
Capital risk management
The Group’s objectives when managing capital are to safeguard the Group’s ability to continue as a going
concern in order to provide returns for shareholders and benefits for other stakeholders and to maintain an
optimal capital structure to reduce the cost of capital. This is achieved by pricing services commensurately with
the level of risk.
The Group monitors capital on the basis of the carrying amount of equity.
The Group sets the amount of capital in proportion to its overall financing structure, i.e. equity and long-term
loans. The Group manages the capital structure and makes adjustments to it in the light of changes in economic
conditions and the risk characteristics of the underlying assets. In order to maintain or adjust the capital structure,
the Group may adjust the amount of dividends paid to shareholders, return capital to shareholders, issue new
shares or loan notes, or sell assets to reduce debt.
18 Related party transactions
During the period the Group entered into the following related party transactions. All transactions were made on
an arm’s length basis:
Howard Kennedy LLP
Keith Lassman, Non-Executive Director and shareholder, is a partner of Howard Kennedy LLP Solicitors. During
the period the Group paid £12,134 (year to 31 December 2010: £12,241) in respect of legal services provided to
the Group. The balance due to Howard Kennedy LLP Solicitors at the period end was £4,766 (31 December
2010: £6,499).
DC Storm Limited
The Group completed the sale of its 20.6% shareholding in DC Storm Limited in August 2011 for a net
consideration of £194,500 (£200,000 less transaction costs).
During the 15 months to 31 March 2012 the Group paid £81,302 in respect of software licensing provided to the
Group (year to 31 December 2010: £52,329). The balance due to DC Storm Limited at the period end was
£37,681 (31 December 2010: £24,360).
Deal Group Media Pty Limited
This is the Group’s former Australian based subsidiary which was disposed of in October 2010. The Group
provided technical and other services during the 15 months to 31 March 2012 and charged a total of £120,625
(year to 31 December 2010: £13,813). The balance owed to the Group at period end was £13,011 (31 December
2010: £50,873).
Transaction involving director
During the period Adrian Moss, Director and shareholder of the Company, made an interest-free loan of £27,145
to the Company. The loan remained outstanding at period end but was repaid in full in May 2012.
asia digital holdings PLC
annual report and accounts 2012
42
notes to the consolidated financial statements
for the 15 months ended 31 March 2012
18 Related party transactions continued
Share Options
20,400,000 share options (revised to 204,000 share options after capital reorganisation) held by the directors
under an approved share option scheme were rebased with an exercise price of 0.5 pence per option during the
period. The share options will be fully vested on the second anniversary of date of issue.
The number of share options, which are the subject of the re-pricing, held by members of the Board remains
unchanged as follows:
Adrian Moss - 17,400,000 options (revised to 174,000 options after capital reorganisation)
David Lees - 1,750,000 options (revised to 17,500 options after capital reorganisation)
Keith Lassman - 1,250,000 options (revised to 12,500 options after capital reorganisation)
The exercise price of 0.5 pence per option was subsequently revised to 50 pence per option following the
approval of a capital reorganisation in May 2012.
The re-pricing of share options held by members of the Board, in accordance with IFRS 2, triggered an additional
share based payments charge which has been recognised in the income statement.
The rebasing of the share options is treated as a related party transaction under AIM Rule 13.
19 Pensions
The Group operates a defined contribution pension scheme for the benefit of the employees. The assets of the
scheme are administered by trustees in a fund independent from those of the Group. The pension costs charged
for the period are disclosed in notes 3 and 4 to the financial statements.
20 Events after the balance sheet date
Disposal of DGM India Internet Marketing Limited (“DGM India”)
On 4 April 2012, the Board of ADH entered into a sale and purchase agreement for the disposal of one of its
principal subsidiaries, DGM India, to Tyroo Media Private Limited and to Inflection Digital Holdings Private
Limited (both of which are private companies incorporated and registered in India), for a total gross consideration
of Rupees 33,500,000 (approximately £412,760).
The transaction completed in July 2012.
Disposal of selected assets of DGM Asia Pacific Private Limited (“DGM Singapore”)
On 17 April 2012, the Board of ADH entered into a conditional agreement for the disposal of selected assets of
one of its principal trading subsidiaries, DGM Singapore to Flow Digital Private Limited, a subsidiary of Omnicom
Media Group, incorporated and registered in Singapore, for a total gross consideration of USD $250,000
(approximately £160,932).
The ADH Board further announced on 13 June 2012 that certain retentions had been agreed with the buyer,
resulting in a revised consideration of USD $200,000 (approximately £128,746).
The transaction was approved at a General Meeting held on 28 May 2012, and completed in June 2012.
Closure of ADH China and liquidation of certain ADH subsidiaries
On 17 April 2012, the Board of ADH announced to the London Stock Exchange its proposal to close the Group’s
operation in China which was established in the summer of 2010.
In addition to the closure of ADH China, the Board also announced proposals to liquidate a number of Singapore,
Hong Kong and Philippines based subsidiaries which have negative net assets and are insolvent. These include:
– Aktiv Digital Asia Pacific Pte Ltd ("Aktiv SG")
– Aktiv Digital Hong Kong Pte Ltd ("Aktiv HK")
– Asia Digital Holdings Pte Ltd ("ADH SG")
– Deploy Digital Pte Ltd ("Deploy SG")
– Deploy Philippines - Rep Office ("Deploy PH")
– DGM Asia Pacific Pte Ltd ("DGM Singapore")
The proposals were approved at a General Meeting held on 28 May 2012.
Fundamental change of business
As the effect of the disposal of selected assets of DGM Singapore and the closure of ADH China, which followed
the disposal of DGM India, will be to divest the Company of its trading businesses and activities, the disposal of
selected assets of DGM Singapore and the closure of ADH China constituted a fundamental change of business
under Rule 15 of AIM Rules. The Company will therefore be treated as an investing company.
The investment policy of the Company was approved at a General Meeting held on 28 May 2012.
asia digital holdings PLC
annual report and accounts 2012
43
notes to the consolidated financial statements
for the 15 months ended 31 March 2012
20 Events after the balance sheet date continued
Capital Reorganisation and Admission of New ordinary Shares
A proposed capital reorganisation became effective on 28 May 2012 following the passing of a resolution at a
General Meeting held on 28 May 2012.
Each of the Company’s existing ordinary shares of 0.1 pence each (“Existing Ordinary Shares”) have been
subdivided into 1 new ordinary share of 0.001 pence (“New Share”) and 99 new deferred shares of 0.001 pence
(“New Deferred Shares”).
The New Shares referred to above have been consolidated into new ordinary shares of 0.1 pence (“New
Ordinary Shares”) on the basis of 1 New Ordinary Share for every 100 New Shares.
The New Ordinary Shares will have the same rights and entitlements (including as to voting, dividends and return
on capital) as the Existing Ordinary Shares.
Admission of the New Ordinary Shares to trading on AIM took place on 29 May 2012.
asia digital holdings PLC
annual report and accounts 2012
44
independent auditor’s report
to the members of asia digital holdings PLC
We have audited the parent company financial statements of Asia Digital Holdings PLC for the period ended 31
March 2012 which comprise the company balance sheet, and the related notes. The financial reporting
framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards
(United Kingdom Generally Accepted Accounting Practice).
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.
Respective responsibilities of Directors and auditors
As explained more fully in the Directors’ Responsibilities Statement set out on page 10, the Directors are
responsible for the preparation of the parent company financial statements and for being satisfied that they give a
true and fair view. Our responsibility is to audit and express an opinion on the parent company financial
statements in accordance with applicable law and International Standards on Auditing (UK and Ireland). Those
standards require us to comply with the Auditing Practices Board’s (APB’s) Ethical Standards for Auditors.
Scope of the audit of the financial statements
A description of the scope of an audit of financial statements is provided on the APB’s website at
www.frc.org.uk/apb/scope/private.cfm.
Opinion on financial statements
In our opinion the parent company financial statements:
• give a true and fair view of the state of the Company’s affairs as at 31 March 2012;
• have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice;
and
• have been prepared in accordance with the requirements of the Companies Act 2006.
Emphasis of matter – Going concern
In forming our opinion on the financial statements, which is not modified, we have considered the adequacy of
the disclosures made in the accounting policies on page 15 of the financial statements concerning the Group’s
ability to continue as a going concern. As explained on page 15 of the financial statements, the Group’s plans to
improve its balance sheet and obtain long term funding are dependent on the ability to secure new investment,
and creditor and shareholder approvals of a Company Voluntary Agreement (CVA) in the UK. These conditions,
along with other matters explained on page 15 to the financial statements indicate the existence of a material
uncertainty that may cast significant doubt about the Group’s ability to continue as a going concern. The financial
statements do not include the adjustments that would result if the Group was unable to continue as a going
concern.
Opinion on other matter prescribed by the Companies Act 2006
In our opinion the information given in the Directors’ Report for the financial period for which the financial
statements are prepared is consistent with the parent company financial statements.
Matters on which we are required to report by exception
We have nothing to report in respect of the following matters where 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.
asia digital holdings PLC
annual report and accounts 2012
45
independent auditor’s report
to the members of asia digital holdings PLC
Other matter
We have reported separately on the Group financial statements of Asia Digital Holdings PLC for the period ended
31 March 2012. That report includes an emphasis of matter.
Nicholas Page
Senior Statutory Auditor
for and on behalf of Grant Thornton UK LLP
Statutory Auditor, Chartered Accountants
Gatwick
2 November 2012
asia digital holdings PLC
annual report and accounts 2012
46
accounting policies (parent company financial statements)
for the 15 months ended 31 March 2012
Basis of preparation
The parent company financial statements have been prepared in accordance with applicable United Kingdom
accounting standards and under the historical cost convention.
The principal accounting policies of the Company are set out below and have remained unchanged from the
previous year.
Going concern
The Company has historically been reliant on its trading subsidiaries for income and cash generation.
As the effect of the disposal of DGM India and selected assets of DGM Singapore, as well as the closure of the
Company’s China operation (described in note 20 to the consolidated financial statements), has been to divest
the Company of its trading businesses and activities, this constitutes a fundamental change of business under
Rule 15 of the AIM Rules. As a result, the Company has been treated as an Investing Company, following
approval of the Investment Policy at a General Meeting held on 28 May 2012 and the completion of the sale of
selected assets of DGM Singapore. The Company is now required to implement the Investing Policy, or
otherwise make acquisition or acquisitions which constitute a reverse takeover under Rule 14 of the AIM Rules,
within twelve months of obtaining consent from shareholders.
In order to enable the Company to execute its investment policy, the Directors are endeavouring to seek
additional long term funding.
The Directors have concluded that material uncertainties that cast significant doubt upon the ability of the
Company to continue as a going concern exist. Nevertheless, after making enquiries, and considering the
uncertainties, the Directors have a reasonable expectation that the Company will have adequate resources to
continue in operational existence for the foreseeable future. Accordingly, they adopt the going concern basis in
preparing the annual report and accounts.
Depreciation
Depreciation is calculated to write down the cost of all tangible fixed assets over their expected economic useful
lives.
The periods generally applicable are:
Fixtures and fittings
–
Leasehold improvements –
25% per annum
20% per annum
Deferred tax
Deferred tax is recognised on all timing differences where the transactions or events that give the Company an
obligation to pay more tax in the future, or a right to pay less tax in the future, have occurred by the balance sheet
date. Deferred tax assets are recognised when it is more likely than not that they will be recovered.
Deferred tax is measured on an undiscounted basis using rates of tax that have been enacted or substantively
enacted by the balance sheet date.
Leased assets
A lease is classified as a finance lease if it transfers substantially all the risks and rewards incident to ownership.
All other leases are classified as operating leases. Classification is made at the inception of the lease. The
Company has both finance and operating leases. Payments made under operating leases are charged to the
profit and loss account on a straight-line basis over the lease term.
Financial instruments
A financial instrument refers to a contract that gives rise to a financial asset of one entity and a financial liability or
equity instrument of another entity and is recognised on the Company’s balance sheet when the Company
becomes a party to the contractual terms of the instrument. Financial instruments include cash and deposits,
other receivables and payables, debt and equity securities, etc.
Debtors and other receivables
Other receivables are recognised initially at fair value and subsequently measured at amortised cost using the
effective interest method, less provision for impairment. A provision for impairment of other receivables is
established when there is objective evidence that the Company will not be able to collect all amounts due
according to the original terms of the receivables.
Creditors and other payables
Other payables are not interest-bearing and are stated at their fair value on initial recognition. They are then
accounted for using the effective interest rate method.
asia digital holdings PLC
annual report and accounts 2012
47
accounting policies (parent company financial statements)
for the 15 months ended 31 March 2012
Borrowings
Borrowings are recognised at fair value, net of transaction costs incurred. They are then accounted for using the
effective interest method. Fees paid on the settlement of loan facilities are recognised as transaction costs of the
loan.
Foreign currencies
Transactions in currencies other than the local currency are recorded at the rates of exchange prevailing on the
dates of the transactions. At the balance sheet date, monetary assets and liabilities that are denominated in
foreign currencies are translated at the rates prevailing at the period end date. Gains and losses arising on
translation are included in net profit or loss for the period.
Investments
Investments are held at cost less amounts written off.
Share-based payments
Share-based payments that are within the scope of FRS 20 have been recognised in the financial statements in
accordance with that standard. This has been applied to arrangements granted after 7 November 2002 and
vested equally over three years.
All goods and services received in exchange for the grant of any share-based payment are measured at their fair
values. Where employees are rewarded using share-based payments, the fair values of employees’ services are
determined indirectly by reference to the fair value of the instrument granted to the employees. This fair value is
appraised at the grant date and excludes the impact of non-market vesting conditions (for example, profitability
and sales growth targets).
All equity-settled share-based payments are ultimately recognised as an expense in the income statement with a
corresponding credit to equity.
If vesting periods or other non-market vesting conditions apply, the expense is allocated over the vesting period,
based on the best available estimate of the number of share options expected to vest. Estimates are
subsequently revised if there is any indication that the number of share options expected to vest differs from
previous estimates. Any cumulative adjustment prior to vesting is recognised in the current period. No adjustment
is made to any expense recognised in prior periods if share options ultimately exercised are different to that
estimated on vesting. Upon exercise of share options the proceeds received net of attributable transaction costs
are credited to share capital and, where appropriate, share premium.
Fair values of share options or awards, measured at the date of the grant of the option or award, are calculated
using a binomial model methodology.
asia digital holdings PLC
annual report and accounts 2012
48
company balance sheet
as at 31 March 2012
Fixed assets
Fixed asset investments
Current assets
Debtors
Cash at bank and in hand
Creditors: amounts falling due within one year
Creditors
Onerous lease provisions
Bank overdraft
Net current assets
Creditors: amounts falling due after more than
one year
Onerous lease provisions
Total assets less total liabilities
Capital and reserves
Called up share capital
Capital redemption reserve
Share premium account
Share-based payment reserve
Profit and loss account
Shareholders’ funds
31 March
2012
31 December
2010
Notes
£’000
£’000
£’000
£’000
1
2
3
4
4
5
7
7
6
7
51
3
54
(420)
(42)
–
(462)
4,852
13,188
23,792
1,176
50
50
50
50
1,181
–
1,181
(875)
(215)
(10)
(1,100)
4,852
13,188
23,792
1,155
(408)
–
(358)
81
(224)
(93)
43,008
(43,366)
(358)
42,987
(43,080)
(93)
The financial statements were approved by the Board of Directors, authorised for issue and signed on their behalf
on 2 November 2012:
Adrian Moss
Chief Executive Officer
Company registration number: 03904195
asia digital holdings PLC
annual report and accounts 2012
49
notes to the company financial statements
for the 15 months ended 31 March 2012
1 Fixed asset investments
Cost
At 1 January 2011
Additions
At 31 March 2012
Impairment
At 1 January 2011
Impairment in the period
At 31 March 2012
Net book amount
At 31 March 2012
At 31 December 2010
Subsidiaries
Associates
£’000
£’000
Total
£’000
1,106
–
1,106
1,056
–
1,056
50
50
3,713
4,819
–
–
3,713
5,093
3,713
4,769
–
–
3,713
4,769
–
–
50
50
As at 31 March 2012 the undertakings in which the Company held 20% or more of the share capital were:
Name of undertaking
of incorporation
shares held
held
Country
Class of Proportion
Nature of
business
ADH (Shanghai) Information
Consulting Co. Limited
DGM India Internet Marketing
Private Limited
China
Ordinary
India
Ordinary
Asia Digital Holdings Pte Limited
Singapore
Ordinary
AKTIV Digital Asia Pacific Pte
Limited
AKTIV Digital Hong Kong Pte
Limited
Singapore
Ordinary
Hong Kong
Ordinary
DGM Asia Pacific Limited
Singapore
Ordinary
Deploy Digital Pte Limited
Singapore
Ordinary
100% Online search and marketing
services
100% Online search and marketing
services
100% Online search and marketing
services
100% Online search and marketing
services
100% Online search and marketing
services
100% Online search and marketing
services
100% Online search and marketing
services
The Company disposed its 20.6% holding in DC Storm Limited in August 2011. Further details are available in
note 9 to the consolidated financial statements.
2 Debtors
Amounts owed by Group undertakings
Other debtors
Deferred consideration on sale of subsidiary*
Prepayments and accrued income
31 March
31 December
2012
£’000
–
12
–
39
51
2010
£’000
348
106
657
70
1,181
* This relates to the deferred element of the consideration from the sale of the Group’s Australian operation in October 2010. The full amount was
received during the 15 months to 31 March 2012.
asia digital holdings PLC
annual report and accounts 2012
50
notes to the company financial statements
for the 15 months ended 31 March 2012
3 Creditors
Other creditors
Accruals and deferred income
31 March
31 December
2012
£’000
333
87
420
2010
£’000
407
468
875
4 Onerous lease provisions
The provision (£42,000) was made for the office lease, service charges and business rates which were entered
into in October 2003 for a ten year lease at the former office in London, UK.
5 Share capital
Authorised capital
9,999,520,000 ordinary shares of 0.1 pence each
76,025,157,516 deferred shares of 0.001 pence
4,083,918,156 deferred shares of 0.1 pence each
54,952,000 deferred shares of 24 pence each
Allotted, called up and fully paid capital
7,679,309 (31 December 2010: 7,679,309) ordinary shares of 0.1 pence each
76,025,157,516 deferred shares of 0.001 pence
4,083,918,156 deferred shares of 0.1 pence each
Allotments during the period
During the period the Company allotted the following ordinary shares:
Shares in issue at 1 January 2011
Shares issued during the period
Shares in issue at 31 March 2012
Shares in issue at 1 January 2010
Shares issued during the period
Shares in issue at 31 December 2010
31 March
31 December
2012
£’000
10,000
760
4,084
13,188
28,032
8
760
4,084
4,852
2010
£’000
10,000
760
4,084
13,188
28,032
8
760
4,084
4,852
15 months ended 31 March 2012
7,679,309
–
7,679,309
Year ended 31 December 2010
7,087,687
591,622
7,679,309
The unissued ordinary shares of 1 pence are subdivided into ten ordinary shares of 0.1 pence each and the
issued ordinary shares of 1 pence each are subdivided into one ordinary share of 0.1 pence each and nine
deferred shares of 0.1 pence each.
A proposed capital reorganisation was approved at a General Meeting held on 28 May 2012. The existing
ordinary shares were consolidated into new ordinary shares of 0.1 pence on the basis of 1 new share for every
100 shares. The number of shares in issue has been restated to reflect the effect of the capital reorganisation.
asia digital holdings PLC
annual report and accounts 2012
51
notes to the company financial statements
for the 15 months ended 31 March 2012
6 Share-based payments
During the period 59,833 options (year ended 31 December 2010: 170,800) were issued to staff (excluding
directors) at an average fair value of 50 pence per share (year ended 31 December 2010: 50 pence).
The fair values of the options granted during the 15 months to 31 March 2012 were determined using the
binomial valuation model. The model has been applied to each issue of options incorporating the share price
prevailing at the time the options were granted.
The model takes into account a volatility rate of 175%, which has been derived from historical experience. A
weighted average risk-free interest rate of 1.92% has been applied. The weighted average share price at grant
date was 43 pence and the weighted average exercise price was 50 pence.
The options were granted in accordance with the Group’s Enterprise Management Incentive Scheme. The
options have lives of ten years and vest in three equal tranches over the first three years of their lives provided
the employees continue to work for the Group. The expected lives of the options used in application of the
binomial model were five years for Directors and management staff and four years for non-management staff.
The amount of employee remuneration expense in respect of the share options granted amounts to £21,000
(year to 31 December 2010: £121,000).
The average remaining life of vested options is six years and number of options exercisable at period end is
351,617 (31 December 2010: 354,867).
The inputs to the option pricing model and the weighted average figures are as follows:
Share price at grant date (pence)
Exercise price (pence)
Expected life (years)
Annualised volatility
Risk-free interest rate
Fair value determined (pence)
Options granted
Management management
average
Non- Weighted
50
50
5
1.75
0.022
43
10,000
41
50
4
1.75
0.019
35
49,833
43
50
4
1.75
0.019
37
asia digital holdings PLC
annual report and accounts 2012
52
notes to the company financial statements
for the 15 months ended 31 March 2012
6 Share-based payments continued
The general terms and conditions of the share option scheme are that the shares are issued under the Enterprise Incentive Management Scheme rules and the shares vest
equally over a three year period.
Exercise
price
(pence)
124.68
356.50
510.00
650.00
450.00
375.00
425.00
350.00
125.00
125.00
050.00
050.00
050.00
Held at
Granted
Exercised
Forfeited
Lapsed
Cancelled
Issue
31 December
date
October 2003
December 2003
April 2004
April 2004
January 2006
June 2006
September 2006
April 2007
May 2008
February 2009
January 2010
February 2011
April 2011
2010
2,516
3,000
300
250
5,000
7,500
333
9,651
138,550
91,167
168,300
–
–
426,567
during
Year
during
year
during
year
during
year
during
year
–
–
–
–
–
–
–
–
–
–
–
10,000
49,833
59,833
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
(4,333)
(30,667)
–
–
(35,000)
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
(333)
(17,500)
(32,334)
–
–
–
(50,167)
Held at
31 March
2012
2,516
3,000
300
250
5,000
7,500
333
9,318
121,050
54,500
137,633
10,000
49,833
401,233
The above table excludes Directors’ options.
Options forfeited in the period are in respect of employees leaving the employment of the Group.
asia digital holdings PLC
annual report and accounts 2012
53
notes to the company financial statements
for the 15 months ended 31 March 2012
6 Share-based payments continued
Exercise
price
(pence)
124.68
356.50
510.00
650.00
450.00
375.00
425.00
350.00
125.00
125.00
050.00
Held at
Granted
Exercised
Forfeited
Lapsed
Cancelled
Held at
Issue
31 December
date
October 2003
December 2003
April 2004
April 2004
January 2006
June 2006
September 2006
April 2007
May 2008
February 2009
January 2010
2009
2,516
3,000
300
250
5,000
7,500
666
9,651
126,050
98,500
–
253,433
during
year
during
year
during
year
during
year
–
–
–
–
–
–
–
–
12,500
–
170,800
183,300
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
(333)
–
–
(333)
(2,500)
(3,166)
–
–
–
–
–
–
–
–
–
(7,000)
–
(7,000)
during
31 December
year
–
–
–
–
–
–
–
–
–
–
–
–
2010
2,516
3,000
300
250
5,000
7,500
333
9,651
138,550
91,167
168,300
426,567
The above table excludes Directors’ options.
Options forfeited in the year are in respect of employees leaving the employment of the Group.
A proposed capital reorganisation was approved at a General Meeting held on 28 May 2012. The existing ordinary shares were consolidated into new ordinary shares of 0.1
pence on the basis of 1 new share for every 100 shares. Share options and exercise prices have been restated to reflect the effect of the capital reorganisation.
asia digital holdings PLC
annual report and accounts 2012
54
notes to the company financial statements
for the 15 months ended 31 March 2012
7 Share premium account and reserves
At 1 January 2011
Retained loss for the period
Share-based payment
At 31 December 2011
Capital
Share Share-based
Profit and
redemption
premium
payment
loss
reserve
reserve
reserve
account
£’000
13,188
–
–
£’000
23,792
–
–
£’000
1,155
–
21
£’000
(43,080)
(286)
–
13,188
23,792
1,176
(43,366)
8 Loss of parent company
As permitted by Section 408 of the Companies Act 2006, the profit and loss account of the parent company is not
shown separately as part of these accounts. The parent company’s loss for the financial period amounted to
£286,000 (year to 31 December 2010: £2,404,000).
9 Directors and employees
The average number of persons employed by the Company (including Directors) during the period was as
follows:
Average number employed
Directors’ remuneration was as follows:
Executive
A Moss
Non-Executive
D Lees
K Lassman
Executive
A Moss
Non-Executive
D Lees
K Lassman
T Beattie (resigned 15 November 2010)
31 March
31 December
2012
3
2010
4
15 months ended 31 March 2012
Salary
£’000
Fees
£’000
Pension
£’000
Equity
£’000
Total
£’000
260
–
–
260
–
–
–
–
11
–
–
11
–
–
–
–
271
–
–
271
Year ended 31 December 2010
Salary
£’000
Fees
£’000
Pension
£’000
Equity
£’000
Total
£’000
292
–
–
–
292
–
15
10
–
25
56
–
–
–
56
240
588
33
23
–
48
33
–
296
669
asia digital holdings PLC
annual report and accounts 2012
55
notes to the company financial statements
for the 15 months ended 31 March 2012
10 Reconciliation of shareholders’ funds
Opening shareholders’ funds
Loss for the financial period
Share-based payment
Issue of shares
Closing shareholders’ funds
31 March
31 December
2012
£’000
(93)
(286)
21
–
(358)
2010
£’000
2,040
(2,404)
122
149
(93)
11 Related party transactions
The Company is exempt under the terms of FRS 8 Related Parties from disclosing related party transactions with
entities that are wholly owned and part of the Asia Digital Holdings PLC Group.
During the period the Company entered into the following related party transactions. All transactions were made
on an arm’s length basis:
Howard Kennedy LLP
Keith Lassman, Non-Executive Director and shareholder, is a partner of Howard Kennedy LLP Solicitors. During
the period the Company paid £12,134 (year to 31 December 2010: £12,241) in respect of legal services provided
to the Company. The balance due to Howard Kennedy LLP Solicitors at the period end was £4,766 (31
December 2010: £6,499).
DC Storm Limited
The Company completed the sale of its 20.6% shareholding in DC Storm Limited in August 2011 for net
consideration of £194,500 (£200,000 less transaction costs).
During the 15 months to 31 March 2012 the Company paid £81,302 in respect of software licensing provided to
the Company (year to 31 December 2010: £52,329). The balance due to DC Storm Limited at the period end was
£37,681 (31 December 2010: £24,360).
Deal Group Media Pty Limited
This is the Company’s former Australian based subsidiary which was disposed of in October 2010. The Company
and other subsidiaries provided technical and other services during the 15 months to 31 March 2012 and charged
a total of £120,625 (year to 31 December 2010: £13,813). The balance owed to the Company and other
subsidiaries at period end was £13,011 (31 December 2010: £50,873).
Transaction involving director
During the period Adrian Moss, Director and shareholder of the Company, made an interest-free loan of £27,145
to the Company. The loan remained outstanding at period end but was repaid in full in May 2012.
Share Options
20,400,000 share options (revised to 204,000 share options after capital reorganisation) held by the directors
under an approved share option scheme were rebased with an exercise price of 0.5 pence per option during the
period. The share options will be fully vested on the second anniversary of date of issue.
The number of share options, which are the subject of the re-pricing, held by members of the Board remains
unchanged as follows:
Adrian Moss - 17,400,000 options (revised to 174,000 after capital reorganisation)
David Lees - 1,750,000 options (revised to 17,500 after capital reorganisation)
Keith Lassman - 1,250,000 options (revised to 12,500 after capital reorganisation)
The exercise price of 0.5 pence per option was subsequently revised to 50 pence per option following the
approval of a capital reorganisation in May 2012.
The re-pricing of share options held by members of the Board, in accordance with IFRS 2, triggered an additional
share based payments charge which has been recognised in the income statement.
The rebasing of the share options is treated as a related party transaction under AIM Rule 13.
asia digital holdings PLC
annual report and accounts 2012
56
notice of annual general meeting
of asia digital holdings PLC
Notice is hereby given that the Annual General Meeting of Asia Digital Holdings PLC will be held on 5 December
2012 at 19 Cavendish Square, London W1A 2AW at 11.00am. The business of the Meeting will be as follows:
Resolutions
To consider and, if thought fit, pass the following resolutions 1–4 as ordinary resolutions, and resolutions 5-6 as
special resolutions:
1.
2.
3.
4.
To receive and adopt the Company’s audited accounts for the 15 months ended 31 March 2012, together
with the report of the auditor and the Directors thereon.
To re-elect Keith Lassman as a Director who retires in accordance with the Company’s Articles of
Association.
To re-appoint Grant Thornton to hold office as auditors of the Company until the conclusion of the next
Annual General Meeting at which accounts of the Company are presented and authorise the Directors to
determine their remuneration.
That, in accordance with Section 551 of the Companies Act 2006, the Directors be and are hereby generally
and unconditionally authorised to exercise all the powers of the Company to allot shares or to grant rights to
subscribe for or to convert any securities into shares within the terms of the restrictions and provisions
following, namely:
4.1.1
this authority shall (unless previously revoked, varied or renewed) expire five years from the date of
this resolution, but shall be capable of renewal from time to time by the Company in general meeting
for a further period not exceeding five years; and
this authority shall be limited to the allotment of, or grant of rights to subscribe for or to convert any
securities into, shares up to an aggregate nominal value of £2,000,000.
4.1.2
4.2 For the purpose of paragraph 4.1 above:
4.2.1
the said authority shall allow and enable the Company to make an offer or agreement before the
expiry of that authority which would or might require shares to be allotted or rights to be granted after
such expiry and the Directors may allot, or grant of rights to subscribe for or to convert any securities
into, shares in pursuance of such an offer or such agreement notwithstanding the expiry of such
power; and
4.2.2 words and expressions defined in or for the purposes of Part 17 of the Companies Act 2006 shall
bear the same meaning herein.
4.3 The authority conferred by paragraph 4.1 above shall be in substitution for all previous authorities conferred
upon the Directors to allot shares or to grant rights to subscribe for or to convert any securities into shares.
5.1 That, in accordance with Section 570(1) of the Companies Act 2006, the Directors be and are hereby given
power to allot equity securities for cash pursuant to the general authority conferred upon the Directors in
resolution 4 above as if sub-section (1) of Section 561 of the Companies Act 2006 did not apply to such
allotment, provided that the power hereby granted:
5.1.1 shall be limited to:
5.1.1.1
5.1.1.2
the allotment of equity securities in connection with or pursuant to an offer by way of rights
to the holders of ordinary shares in the capital of the Company and other persons entitled
to participate therein for cash in proportion (as nearly as may be) to the holdings of
ordinary shares of such holders (or, as appropriate, to the numbers of ordinary shares
which such other persons are for these purposes deemed to hold), subject only to such
exclusions or other arrangements as the Directors may consider necessary or expedient
to deal with fractional entitlements or legal or practical problems under the laws of, or the
requirements of any recognised regulatory body in any territory; and
the allotment (other than pursuant to paragraph 5.1.1.1 of this proviso) of equity securities
up to an aggregate nominal amount of £1,500,000.
5.1.2 shall (unless previously revoked, varied or renewed) expire at the conclusion of the Annual General
Meeting of the Company next following the passing of this resolution, and in any event on 15 months
from this Annual General Meeting.
5.2 The said power shall allow and enable the Company to make an offer or agreement before the expiry of that
power which would or might require equity securities to be allotted after such expiry and the Directors may
allot equity securities in pursuance of such an offer or such agreement notwithstanding the expiry of such
power.
5.3 Words and expressions defined in or for the purposes of Part 17 of the Companies Act 2006 shall bear the
same meaning herein.
asia digital holdings PLC
annual report and accounts 2012
57
notice of annual general meeting
of asia digital holdings PLC
Resolutions continued
6.1 That, the Company is hereby authorised to make one or more market purchases (within the meaning of
Section 701 of the Companies Act 2006) of ordinary shares of 0.1 pence each in the capital of the Company
(the “Shares”) provided that:
6.1.1
the maximum aggregate number of Shares that is purchased is an amount equal to 25% of the
issued Shares at the date of this resolution;
the minimum price paid for a Share is 0.1 pence;
the maximum price paid for a Share is an amount, exclusive of expenses, equal to 105% of the
average market value of Shares for the five business days immediately preceding the day on which
that Share is purchased;
the Company may validly make a contract to purchase Shares under the authority hereby conferred
prior to the expiry of such authority which will or may be executed wholly or partly after the expiry of
such authority, and may validly make a purchase of Shares in pursuance of any such contract.
6.1.2
6.1.3
6.1.4
6.2 Unless renewed, the authority conferred in paragraph 6.1 above shall expire either at the conclusion of the
next Annual General Meeting of the Company or on the expiry of 15 months following the passing of this
resolution, whichever is the later to occur, save that the Company may, prior to such expiry, enter into a
contract to purchase Shares which will or may be completed or executed wholly or partly after such expiry.
By order of the Board
Keith Lassman
Company Secretary
2 November 2012
Information regarding the Annual General Meeting, including the information required by Section 311A of the
Companies Act 2006, is available from www.adhplc.asia.
Notes
(a) Any member of the Company entitled to attend and vote at the Annual General Meeting is also entitled to
appoint one or more proxies to attend, speak and vote instead of that member. A member may appoint
more then one proxy in relation to the Annual General Meeting provided that each proxy is appointed to
exercise the rights attached to a different share or shares held by that member. A proxy may demand, or
join in demanding, a poll. A proxy need not be a member of the Company but must attend the Annual
General Meeting in order to represent his appointor. A member entitled to attend and vote at the Annual
General Meeting may appoint the Chairman or another person as his proxy although the Chairman will not
speak for the member. A member who wishes his proxy to speak for him should appoint his own choice of
proxy (not the Chairman) and give instructions directly to that person. If you are not a member of the
Company but you have been nominated by a member of the Company to enjoy information rights, you do
not have a right to appoint any proxies under the procedures set out in these notes. Please read note (h)
below. Under Section 319A of the Companies Act 2006, the Company must answer any question a member
asks relating to the business being dealt with at the Annual General Meeting unless:
•
answering the question would interfere unduly with the preparation for the Annual General Meeting or
involve the disclosure of confidential information;
the answer has already been given on a website in the form of an answer to a question; or
it is undesirable in the interests of the Company or the good order of the Annual General Meeting that
the question be answered.
•
•
(b) To be valid, a Form of Proxy and the power of attorney or other written authority, if any, under which it is
signed or an office or notarially certified copy or a copy certified in accordance with the Powers of Attorney
Act 1971 of such power and written authority, must be delivered to the Company’s registrars, Capita
Registrars, The Registry, 34 Beckenham Road, Beckenham, Kent BR3 4TU not less than 48 hours
(excluding weekends and public holidays) before the time appointed for holding the Annual General Meeting
or adjourned meeting at which the person named in the Form of Proxy proposes to vote. In the case of a
poll taken more than 48 hours (excluding weekends and public holidays) after it is demanded, the
document(s) must be delivered as aforesaid not less than 24 hours (excluding weekends and public
holidays) before the time appointed for taking the poll, or where the poll is taken not more than 48 hours
(excluding weekends and public holidays) after it was demanded, be delivered at the meeting at which the
demand is made.
asia digital holdings PLC
annual report and accounts 2012
58
notice of annual general meeting
of asia digital holdings PLC
Notes continued
(c)
In order to revoke a proxy instruction a member will need to inform the Company using the following
method:
• by sending a signed hard copy notice clearly stating the intention to revoke the proxy appointment to the
Company’s registrars, Capita Registrars, The Registry, 34 Beckenham Road, Beckenham, Kent BR3
4TU. In the case of a member which is a company, the revocation notice must be executed under its
common seal or signed on its behalf by an officer of the company or an attorney for the company. Any
power of attorney or any other authority under which the revocation notice is signed (or a duly certified
copy of such power or authority) must be included with the revocation notice.
The revocation notice must be received by the Company’s registrars, Capita Registrars, The Registry, 34
Beckenham Road, Beckenham, Kent BR3 4TU before the Annual General Meeting or the holding of a poll
subsequently thereto. If a member attempts to revoke his or her proxy appointment but the revocation is
received after the time specified then, subject to note (d) directly below, the proxy appointment will remain
valid.
(d) Completion and return of a Form of Proxy will not preclude a member of the Company from attending and
voting in person. If a member appoints a proxy and that member attends the Annual General Meeting in
person, the proxy appointment will automatically be terminated.
(e) Copies of the Directors’ Letters of Appointment, the Register of Directors’ interests in the Shares of the
Company kept and a copy of the current Articles of Association will be available for inspection at the
registered office of the Company during usual business hours on any weekday (Saturday and Public
Holidays excluded) from the date of this notice, until the end of the Annual General Meeting and at the place
of the Annual General Meeting for at least 15 minutes prior to and during the Annual General Meeting.
(f) Pursuant to Regulation 41 of the Uncertificated Securities Regulations 2001, the Company has specified
that only those holders of the Company’s shares registered on the Register of Members of the Company as
at 11.00am on 3 December 2012 or, in the event that the Annual General Meeting is adjourned, on the
Register of Members 48 hours before the time of any adjourned meeting, shall be entitled to attend and vote
at the said Annual General Meeting in respect of such shares registered in their name at the relevant time.
Changes to entries on the Register of Members after 11.00am on 3 December 2012 or, in the event that the
Annual General Meeting is adjourned, on the Register of Members less than 48 hours before the time of
any adjourned meeting, shall be disregarded in determining the right of any person to attend and vote at the
Annual General Meeting.
(g) As at 5 November 2012, the Company’s issued share capital comprised 7,679,309 Shares. The total
(h)
number of voting rights in the Company as at 5 November 2012 is 7,679,309. The website referred to above
will include information on the number of shares and voting rights.
If you are a person who has been nominated under Section 146 of the Companies Act 2006 to enjoy
information rights (“Nominated Person”):
• you may have a right under an agreement between you and the member of the Company who has
•
nominated you to have information rights (“Relevant Member”) to be appointed or to have someone else
appointed as a proxy for the Annual General Meeting;
if you either do not have such a right or if you have such a right but do not wish to exercise it, you may
have a right under an agreement between you and the Relevant Member to give instructions to the
Relevant Member as to the exercise of voting rights; and
• your main point of contact in terms of your investment in the Company remains the Relevant Member
(or, perhaps your custodian or broker) and you should continue to contact them (and not the Company)
regarding any changes or queries relating to your personal details and your interest in the Company
(including any administrative matters). The only exception to this is where the Company expressly
requests a response from you.
(i) A corporation which is a member can appoint one or more corporate representatives who may exercise, on
its behalf, all its powers as a member provided that no more than one corporate representative exercises
powers over the same share.
(j) A vote withheld is not a vote in law, which means that the vote will not be counted in the calculation of votes
for or against the resolution. If no voting indication is given, the proxy will vote or abstain from voting at his
or her discretion. The proxy will vote (or abstain from voting) as he or she thinks fit in relation to any other
matter which is put before the Annual General Meeting.
(k) Except as provided above, members who have general queries about the General Meeting should contact
the Company’s registrars, Capita Registrars, The Registry, 34 Beckenham Road, Beckenham, Kent BR3
4TU.
(l) Members may not use any electronic address provided either in this notice of Annual General Meeting, or
any related documents (including the Chairman’s letter and proxy form), to communicate with the Company
for any purposes other than those expressly stated.
(m) Resolution 2: Information about the Director who is proposed by the Board for re-election at the Annual
General Meeting is shown in the annual report and accounts 2012.
asia digital holdings PLC
annual report and accounts 2012
59
financial calendar
5 November 2012 Mailing of 2011/12 annual report and accounts
5 December 2012 Annual General Meeting
30 September 2012 Financial half year end 2012/13
November 2012
31 March 2012
June 2013
Interim results announcement
Financial year end 2012/13
Annual results announcement
asia digital holdings PLC
annual report and accounts 2012
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