Webis Holdings AR2013-proof-7.indd 2 22836.04 25 October 2013 2:24 PM PROOF 7 25/10/2013 14:29:27 Webis Holdings plc Annual Report and Financial Statements for the period ended 31 May 2013 Webis Holdings AR2013-proof-7.indd 3 22836.04 25 October 2013 2:24 PM PROOF 7 25/10/2013 14:29:28 s t n e t n o C Contents Our Performance 02 Group at a Glance 03 Operating Highlights 04 Chairman’s Statement Our Governance 06 The Board of Directors 07 Directors’ Report 09 Corporate Governance 11 Statement of Directors’ Responsibilities 12 Report of the Remuneration Committee Our Financials 14 Report of the Independent Auditors 15 Consolidated Statement of Comprehensive Income 16 Consolidated Statement of Financial Position 17 Consolidated Statement of Changes in Equity 18 Consolidated Statement of Cash Flows 19 Notes to the Financial Statements 35 Notice of Meeting www.webisholdingsplc.com Stock Code: WEB 01 Webis Holdings AR2013-proof-7.indd 1 22836.04 25 October 2013 2:24 PM PROOF 7 25/10/2013 14:29:30 Group at a Glance Webis Holdings plc operates two businesses within its Group structure: Sportsbook betinternet.com m.betinternet.com (mobile) betinternet.com (IOM) Limited betinternet.com NV Now in its 13th year of operation, the betinternet.com sportsbook offers betting opportunities on sports, casinos, poker and games to a growing global customer base through both its website and mobile platforms. The website has a traditional focus on the Far East market, where the brand has an established and loyal following. In Play, where customers place bets on sports events in real time, accounts for a substantial part of the sportsbook’s turnover and margin and is providing for the greatest area of growth. Also on offer are a ‘Live Dealer’ and traditional casino product with table games and slots as well as an increasing suite of fixed-odds games. Poker was launched earlier this year, providing access to the liquidity of the MPN Poker network. The company operates under licences issued in the Isle of Man and Curacao. Pari-Mutuel and Racetrack Operations watchandwager.com link2bet.com Cal Expo Harness Racetrack WatchandWager.com Limited (formerly known as European Wagering Services Limited) WatchandWager.com LLC WatchandWager.com Ltd has been operating for over 12 years and provides pari-mutuel, or pool-betting, wagering services through a number of distribution channels to a global client base. The company holds a United States pari-mutuel licence for Advanced Deposit Wagering, issued by the North Dakota Racing Commission and has its operational base in San Francisco, California, where it has a growing operations team. The business provides wagering opportunities predominantly on horse and greyhound racing in the United States, Canada, United Kingdom, Ireland, Australia and Sweden amongst others. It provides wagering facilities to customers through its website, watchandwager.com, as well as offering a business-to-business wagering product and an Isle of Man based telephone betting call centre. WatchandWager.com LLC operates Cal Expo Harness Racetrack in Sacramento, California, under a licence issued by the California Horse Racing Board. This ‘bricks and mortar’ presence in the largest state economy in the US, where legislative changes for online gaming are currently being debated, provides significant leverage for our related global pari-mutuel operations. As part of the requirements for Webis Holdings plc’s Isle of Man licence, client funds for all Isle of Man licensed group companies are held in fully protected client accounts within an Isle of Man regulated bank. 02 Webis Holdings plc Annual Report and Financial Statements for the period ended 31 May 2013 Webis Holdings AR2013-proof-7.indd 2 22836.04 25 October 2013 2:24 PM PROOF 7 25/10/2013 14:29:30 Operating Highlights } Turnover has increased by 48.3% to £168.64 million (2012: £113.75 million) } Gross profit has increased by 70.9% to £5.44 million (2012: £3.18 million) } Total comprehensive profit has increased to £0.355 million (2012: loss of £0.041 million) } Basic earnings per share have increased to 0.11 pence (2012: negative 0.02 pence) } Gross margin has improved by 14.3% to 3.2% (2012: 2.8%) } Net assets have increased by 424.2% to £3.11 million (2012: £0.59 million) } Company Cash has increased by 131.1% to £2.48 million (2012: £1.07 million) } Successful fundraising generated £0.8 million } Successful first season at Cal Expo, California beating internal forecasts e c n a m r o f r e P r u O www.webisholdingsplc.com Stock Code: WEB 03 Webis Holdings AR2013-proof-7.indd 3 22836.04 25 October 2013 2:24 PM PROOF 7 25/10/2013 14:29:33 Chairman’s Statement Introduction I am very pleased to report the results for the financial year to the end of May 2013. The Group has achieved a full year Total Comprehensive Profit: the first since 2009. We have consistently achieved good advances within both of our gaming subsidiaries: WatchandWager. com Limited (WatchandWager) and betinternet.com (IOM) Limited (betinternet). This follows our continued enhancement of customer- facing website content and the recruitment of more experienced industry personnel. We have also successfully completed our first full harness racing season at the Cal Expo racetrack in Sacramento, California. Our investment in this activity is extremely important for the furtherance of our United States strategy, especially given the current momentum for state- by-state changes to gaming legislation. Year End Results Review Group turnover for the period was £168.64 million (2012: £113.75 million), up by 48.3%. Gross profit increased to £5.44 million (2012: £3.18 million), up by 70.9%. Importantly, overall gross margin increased to 3.2% (2012: 2.8%). Operating expenses increased to £5.072 million (2012: £3.19 million), up by 59.1%. The majority of the increase in expenses was attributable to the licence acquisition and continuing operational costs for Cal Expo, which totalled £1.54 million (2012: £Nil). As a consequence, Total Comprehensive Profit improved to £0.355 million (2012: loss of £0.041 million), our first positive outcome since 2009. Shareholder equity has increased to £3.114 million (2012: £0.594 million). Following a successful fund raising of £0.8 million in January 2013, total Cash stands at £5.114 million (2012: £2.683 million), up 90.6%, including a ring-fenced amount of £2.64 million (2012: £1.61 million) to protect the player liability as required by Isle of Man gambling legislation. Our Pari-mutuel turnover increased to £33.78 million (2012: £30.66 million), with Profit before tax at £0.11 million (2012: £0.17 million). Racetrack Operations generated turnover of £37.90 million (2012: £Nil), with Loss before tax at £0.001 million (2012: £Nil). Our Sportsbook turnover increased to £96.96 million (2012: £83.09 million), with Profit before tax at £0.25 million (2012: loss of £0.21 million). WatchandWager.com WatchandWager (formerly European Wagering Services), our tote betting and racetrack operation overall performed well, despite some challenging trading conditions. As previously reported, we suffered card payment provider issues in the second quarter of the year, which impacted on player numbers. These issues have largely been resolved with the introduction of different payment methods and player numbers at the end of the financial year have been restored to previous levels across the platform. We saw a gradual improvement in performance of our wagering platform in the second half of the year, and this was assisted by a generally strong performance by Cal Expo harness racing during that period. In the last quarter, we launched our new watchandwager.com website and we have commenced the process of migrating our US resident customers to this website from link2bet.com. We expect that the majority of our player base will be utilising our new website as their preferred choice for wagering within the first half of the new financial year. Our first season of harness racing at Cal Expo finished in May 2013 and it has proven to be an exciting period, with our ‘bricks and mortar’ presence providing us with some strong leverage, and greater recognition, throughout the US industry. This has assisted us in obtaining more racing content for international customers from the Churchill Downs and Monarch simulcast and media controlled racetracks and we are now able to accept wagers at some of the most prestigious race meetings in the US. We have also been granted access to the French PMU and the Swedish ATG betting pools, with the latter proving particularly popular with our client base. Cal Expo broke-even within the financial year, which was ahead of our expectations, originally to be at the completion of the first full contractual year in September 2013. We amended the racing program during the season to support our overall plan of fewer race dates with larger field sizes, backed by good TV exposure, which proved successful. Like-for-like turnover, from all sources, wagering on Cal Expo harness racing was up by 26% on the previous year, by the end of the season. Importantly, we continue to receive income from Cal Expo during the close season through a share of the activity at the other Californian racetracks. betinternet.com Our betinternet sportsbook has seen a marked change in its performance and profitability over the course of the year, particularly in the second half, where turnover and margin levels have increased significantly. Our sportsbook fixed-odds margin increased by 1.03% to 3.75%; well ahead of our expectations. betinternet increased expenditure on ‘In Play’ products, data and pricing feeds, particularly for Tennis, Basketball and Golf. This, together with a number of favourable sports results, has been responsible for the majority of this success. For the full year, turnover on our ‘In Play’ content increased to 57% (2012: 43%) of our total fixed odds turnover on single bets, with this percentage reaching over 80% during some individual weeks towards the end of the period. This highlights the importance of the work that our in-house development team have undertaken on our ‘In Play’ product. We remain committed to further investing 04 Webis Holdings plc Annual Report and Financial Statements for the period ended 31 May 2013 Webis Holdings AR2013-proof-7.indd 4 22836.04 25 October 2013 2:24 PM PROOF 7 25/10/2013 14:29:33 in this part of our business and have entered into long-term contracts with established data and pricing providers to assist with continued growth in this area. Casino and games turnover also increased although the margin achieved was lower than expected due to some previously reported large wins. Full-year Live Dealer Casino activity was impacted as this product was unavailable for a six-week period in the early part of the second half whilst we sourced a new provider following the closure of our previous supplier without any notice. We have also increased our Customer Relationship Management (CRM) to help get the best return from our marketing expenditure, aimed particularly at casino and games customers who are more reactive to marketing offers than sports betting customers, who are generally event driven. Our mobile sportsbook has seen growth throughout the year and we plan to focus on enhancements to our mobile offering for all channels in the forthcoming year. Regulatory developments The board remains aware of proposed regulatory changes within some of the jurisdictions where we currently accept customers. We are seeking informed updates on any changes to gaming legislation and the board will make decisions on a case-by-case basis as to where we choose to operate or seek suitable licences, centred on an opportunity versus cost basis. It is likely that we will see increases in licencing fees and betting taxes in forthcoming years, but the online gaming industry has proved strongly resilient to the multiple challenges that it has encountered since its inception. We will update shareholders as appropriate on any developments in this area. Post Year and Strategy The board remains committed to further investing in both operations to build on the achievements that we have seen in the period. As previously announced WatchandWager was approved for an Advanced Deposit Wagering (ADW) licence by the California Horse Racing Board (CHRB) on 19th July. This licence is now operational and allows us to take wagers from, and market to, Californian residents on content for which we have the Horsemen’s agreement. We are currently working with the key industry participants to secure these agreements, and it is anticipated that holding this licence, together with our existing licence to operate harness racing at Cal Expo, will put us in a better strategic position for any further changes to gaming legislation within the state of California. Our CHRB licence to operate harness racing at Cal Expo was formally approved in August 2013, in advance of planned live racing from October 2013 to May 2014. Both our California Horse Racing and ADW licences for 2014 remain subject to formal approval by the CHRB before the end of 2013, but we expect both licences to be approved. In addition, we anticipate the North Dakota Racing Commission to approve our multi-jurisdiction ADW Service Provider licence for 2014, in November 2013. We plan to invest in marketing our new watchandwager.com website directly within those US states where it is currently legal to do so. Our anticipation is that our wide variety of racing content, coupled with an intuitive betting interface will be an attractive proposition for the recruitment of higher-margin ‘leisure’ players. To help implement our US strategy, we have recruited two new senior employees for the roles of Vice President US Operations and Vice President US Finance & Compliance, who have joined our existing team in our San Francisco office. We added Quickfire Poker to betinternet in June, available via a specific channel tab from anywhere within the website. Our customers will now have access to the strong liquidity of the MPN (formerly Microgaming Poker Network) using their single sportsbook wallet. e c n a m r o f r e P r u O The update of the ‘look-and-feel’ of the betinternet website was completed slightly later than planned in August. The new website presents more of our ‘In Play’ content to our customers and allows for a dynamic resizing based on the users’ screen resolution. We have also added further In Play content with the roll-out of Volleyball, Handball, American Football and Baseball. We will continue to increase our In Play offering so that there is live content available for our clients to bet on for most of each day. Outlook The Board is pleased with our achievements thus far, and remains enthused by the opportunities that lie ahead. Both of our operating subsidiaries are now in much healthier positions, with more robust platforms and focused experienced personnel. With a strong balance sheet and the opportunity to invest further in our products, we anticipate the continuation of our growth strategies will be more rewarding in the forthcoming year. We remain very close to the US regulatory changes and are confident that our online licencing and land-based presence at Cal Expo positions us well for any positive amendments to legislation, particularly within California. Finally, I would like offer my thanks to all of our shareholders for their continued support and to all of our staff in the Isle of Man and the United States for their efforts and dedication throughout the year. Denham Eke Chairman 25 October 2013 www.webisholdingsplc.com Stock Code: WEB 05 Webis Holdings AR2013-proof-7.indd 5 22836.04 25 October 2013 2:24 PM PROOF 7 25/10/2013 14:29:34 The Board of Directors D H N Eke, aged 61 Non-executive Chairman Denham Eke began his career in Stockbroking before moving into Corporate Planning for a major UK Insurance Broker. He is a director of many years’ standing of both public and private companies involved in the retail, manufacturing and financial services sectors. Mr Eke was appointed Chairman in April 2003. E Comins, aged 43 Pari-mutuel Operations Director Ed Comins has 21 years’ experience in the betting and gaming industry with Coral, Ladbroke Casinos, the Tote and GameAccount. At the Tote he had overall responsibility for developing Totepool’s pari-mutuel business as General Manager of Tote Direct and Development Director for Totepool. He was Commercial Director for GameAccount, a provider of on-line skill games, where he managed betting partner relationships with key sportsbooks. Mr Comins joined the Board in May 2010. G Knowles, aged 46 Managing Director Garry Knowles has 24 years’ experience in the gaming industry having worked for the William Hill Organisation for 15 years. Garry later held the position of Director of Customer Relations for MGM Mirage Online before joining betinternet as Head of Trading Operations in November 2003. Mr Knowles joined the Board in June 2005. Sir James Mellon, aged 84 Non-executive Director Sir James Mellon is a former diplomat who began his career with the Department of Agriculture for Scotland before moving onto several varied roles including Head of Trade Relations and Export Dept (TRED), FCO, UK Ambassador to Denmark and Director- General for Trade and Investment, United States and Consul-General, New York. He has many years of corporate experience having been a director of both public and private companies. Sir James Mellon joined the Board in January 2012. 06 Webis Holdings plc Annual Report and Financial Statements for the period ended 31 May 2013 Webis Holdings AR2013-proof-7.indd 6 22836.04 25 October 2013 2:24 PM PROOF 7 25/10/2013 14:29:34 Directors’ Report e c n a n r e v o G r u O The directors present their annual report and the audited financial statements for the period ended 31 May 2013. Proposed dividend The directors do not propose the payment of a dividend (2012: Nil). Directors and directors’ interests The directors who held office during the period and to date were as follows: Principal activities The Group operates: } a licensed sportsbook providing a worldwide internet service; } a pari-mutuel service to individual and business customers; } a racetrack under a licence issued in California, USA. Business review The Group operates on a worldwide basis and provides online and offline facilities in respect of a wide variety of sporting events. A more detailed review of the business, its results and future developments is given in the Chairman’s Statement on page 4. Directors’ interests D H N Eke G Knowles E Comins Sir James Mellon Policy and practice on payment of creditors It is the policy of the Group to agree appropriate terms and conditions for its transactions with suppliers by means of standard written terms to individually negotiated contracts. The Group seeks to ensure that payments are always made in accordance with these terms and conditions. At the year end there were 22 days (2012: 18 days) purchases in trade creditors. Financial risks Details relating to financial risk management are shown in note 23 to the financial statements. D H N Eke G Knowles E Comins Sir James Mellon Chairman Managing Director Pari-mutuel Operations Director Non-executive The director retiring by rotation is Mr D H N Eke who, being eligible, offers himself for re-election. The directors who held office at the end of the period had the following interests in the ordinary shares of the Company and options to purchase such shares arising from incentive schemes: Ordinary Shares Options Interest at end of period 2013 — 200,000 — — Interest at start of period 2012 — 200,000 — — Interest at end of period 2013 Interest at start of period 2012 — 14,000,000 — — — 14,000,000 — — D H N Eke is Managing Director of Burnbrae Limited which holds 268,204,442 ordinary shares representing 68.19% of the issued capital of the Company. Further details of the options issued to the executive directors are contained in the Report of the Remuneration Committee on pages 12 and 13. www.webisholdingsplc.com Stock Code: WEB 07 Webis Holdings AR2013-proof-7.indd 7 22836.04 25 October 2013 2:24 PM PROOF 7 25/10/2013 14:29:34 Directors’ Report continued Substantial interests On 30 September 2013 the following interests in 3% or more of the Company’s ordinary share capital had been reported: % 68.19 7.54 Number of ordinary shares 268,204,442 29,651,666 Burnbrae Limited BBHISL Nominees Ltd Annual General Meeting Shareholders will be asked to approve at the Annual General Meeting certain resolutions as special business. Some of these resolutions have become routine business at the Annual General Meetings of most public companies, including your Company, and relate to the renewal of the authority for the directors to allot relevant securities and the renewal of the powers for the directors to allot equity securities for cash. Employees The Group is committed to a policy of equal opportunity in matters relating to employment, training and career development of employees and is opposed to any form of less favourable treatment afforded on the grounds of disability, sex, race or religion. The Group recognises the importance of ensuring employees are kept informed of the Group’s performance, activities and future plans. Political and charitable contributions The Group made no political contributions during the year. As part of the obligations of the pari- mutuel business in the United States, the Group made charitable contributions of £13,104 during the year (2012: £Nil). Auditor KPMG Audit LLC, being eligible, have expressed their willingness to continue in office in accordance with Section 12(2) of the Isle of Man Companies Act 1982. On behalf of the Board Garry Knowles 25 October 2013 08 Webis Holdings plc Annual Report and Financial Statements for the period ended 31 May 2013 Webis Holdings AR2013-proof-7.indd 8 22836.04 25 October 2013 2:24 PM PROOF 7 25/10/2013 14:29:34 Corporate Governance The Company is committed to high standards of corporate governance. The Board is accountable to the Company’s shareholders for good corporate governance. This statement describes how the principles of corporate governance are applied to the Company. 1. Directors The Company is controlled through the Board of directors which comprises two executive and two non-executive directors. The Chairman is mainly responsible for the conduct of the Board, and he, together with the Managing Director, seeks to ensure that all directors receive sufficient relevant information on financial, business and corporate issues prior to meetings. The Managing Director, in conjunction with his executive colleagues, is responsible for co-ordinating the Company’s business and implementing strategy. None of the non-executive directors are deemed to be independent, although the Board intends to appoint at least one independent director at an appropriate time. Shareholders are encouraged to contact the Chairman should they require clarification on any aspect of the Company’s business. The Board has a formal schedule of matters reserved for it and meets at regular times throughout the year. It is responsible for overall Group strategy, acquisition and divestment policy, approval of major capital expenditure projects and consideration of significant financing matters. It monitors the exposure to key business risks including legislative, jurisdictional and major liability management issues. The Board approves the annual budget and the progress towards achievement of the budget. The Board also considers employee issues and key appointments. It also seeks to ensure that all directors receive appropriate training on appointment and then subsequently as appropriate. All directors will submit themselves for re-election at least once every three years. The Board has established two standing committees, both of which operate within defined terms of reference. The committees established are the Audit Committee and the Remuneration Committee. The Board does not consider it necessary for a company of its size to establish a standing Nominations Committee. Instead the Board’s policy in relation to Board appointments is for the Chairman to agree selection criteria with all Board members and use independent recruitment consultants to initiate the search for candidates. The final decision on appointments rests with the full Board. All directors are able to take independent professional advice in furtherance of their duties if necessary. 2. Directors’ Remuneration The Report of the Remuneration Committee is set out on pages 12 and 13 of the report and financial statements. e c n a n r e v o G r u O 3. Relations with Shareholders The Company encourages two-way communication with both its institutional and private investors and attempts to respond quickly to all queries received verbally or in writing. The Board has sought to use the Annual General Meeting to communicate with private investors and encourages their participation. 4. Financial Reporting The performance and financial position of the Group are provided in the Chairman’s Statement on pages 4 and 5 and the Directors’ Report on pages 7 and 8. These enable the Board to present a balanced and understandable assessment of the Group’s position and prospects. The directors’ responsibilities for the financial statements are described on page 11. Internal Control The Board believes it has controls in place which have established an ongoing process for identifying, evaluating and managing the significant risks faced by the Group. In this regard, the Board seeks to work closely with the Group’s auditor. The Board also acknowledges that it has overall responsibility for reviewing the effectiveness of internal control. It believes that senior management within the Group’s operating businesses should also contribute in a substantial way and this has been built into the process. www.webisholdingsplc.com Stock Code: WEB 09 Webis Holdings AR2013-proof-7.indd 9 22836.04 25 October 2013 2:24 PM PROOF 7 25/10/2013 14:29:34 Corporate Governance continued Going Concern As more fully explained in note 1.1 to the accounts on page 19, and after making enquiries, the directors have formed a judgement, at the time of approving the financial statements, that there is a reasonable expectation that the Group has adequate resources to continue in operational existence for the foreseeable future. For this reason, the directors continue to adopt the going concern basis in preparing the financial statements. Internal Audit The directors have reviewed the need for an internal audit function and believe that the Group is not of sufficient size and complexity to require such a function. } Cash flow forecasts are regularly prepared to ensure that the Group has adequate funds and resources for the foreseeable future. } Risks are identified and appraised through the annual process of preparing these budgets. } Steps have been taken to embed internal control and risk management into the operations of the business and to deal with areas of improvement which come to management’s and the Board’s attention. This process is continuing to increase risk awareness throughout the Group. Audit Committee The Audit Committee comprises the non-executive directors and is chaired by Sir James Mellon. The committee acts in an advisory capacity to the Board and meets not less than twice a year. Its terms of reference require it to take an independent view of the appropriateness of the Group’s accounting controls, policies and procedures. The committee also reviews and approves the reports, appointment and fees of the external auditor, and meets its external auditor at least once a year. Additional meetings may be requested by the auditor. There are inherent limitations in any system of internal control and, accordingly, even the most effective system can provide only reasonable, and not absolute, assurance with respect to the preparation of financial information and the safeguarding of assets. The system adopted by the Board manages rather than eliminates the risk of failure to achieve business objectives. In carrying out its review of the effectiveness of internal control in the Group the Board takes into consideration the following key features of the risk management process and system of internal control: } Risks are identified which are relevant to the Group as a whole and encompass all aspects of risk including operational, compliance, financial and strategic. The Board specifically focuses on any risk to the Group from regulatory changes within the jurisdictions from which it currently accepts customers. } The Board seeks to identify, monitor and control the significant risks to an acceptable level throughout the Group. In order to do so the Audit Committee, acting on behalf of the Board, reviews risk matters at each meeting of the Audit Committee. } The Group operates a comprehensive budgeting and financial reporting system which, as a matter of routine, compares actual results with budgets. Management accounts are prepared for each operating activity and the Group on a monthly basis. Material variances from budget are thoroughly investigated. In addition, the Group’s profitability forecast is regularly updated based on actual performance as the year progresses. A thorough reforecast exercise is undertaken following production of the half-year financial statements. 10 Webis Holdings plc Annual Report and Financial Statements for the period ended 31 May 2013 Webis Holdings AR2013-proof-7.indd 10 22836.04 25 October 2013 2:24 PM PROOF 7 25/10/2013 14:29:34 e c n a n r e v o G r u O Statement of Directors’ Responsibilities in Respect of the Directors’ Report and the Financial Statements The directors are responsible for keeping proper accounting records that disclose with reasonable accuracy at any time the financial position of the Parent Company and to enable them to ensure that its financial statements comply with the Companies Acts 1931 to 2004. They have general responsibility for taking such steps as are reasonably open to them to safeguard the assets of the Group and to prevent and detect fraud and other irregularities. The directors are responsible for the maintenance and integrity of the corporate and financial information included on the Company’s website. Legislation governing the preparation and dissemination of financial statements may differ from one jurisdiction to another. The directors are responsible for preparing the Directors’ Report and the financial statements in accordance with applicable law and regulations. Company law requires the directors to prepare Group and Parent Company financial statements for each financial year which meet the requirements of Isle of Man company law. In addition, the directors have elected to prepare the Group and Parent Company financial statements in accordance with International Financial Reporting Standards as adopted by the European Union. The Group and Parent Company financial statements are required by law to give a true and fair view of the state of affairs of the Group and Parent Company and of the profit or loss of the Group for that period. In preparing these financial statements, the directors are required to: } select suitable accounting policies and then apply them consistently; } make judgements and estimates that are reasonable and prudent; } state whether they have been prepared in accordance with International Financial Reporting Standards; and } prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Group and Parent Company will continue in business. www.webisholdingsplc.com Stock Code: WEB 11 Webis Holdings AR2013-proof-7.indd 11 22836.04 25 October 2013 2:24 PM PROOF 7 25/10/2013 14:29:34 Report of the Remuneration Committee Introduction As an Isle of Man company there is no requirement to produce a Directors’ remuneration report. However, this report has been prepared to accord as far as possible with rules and regulations for UK public companies in relation to the disclosure of directors’ remuneration. This report also attempts to meet, as far as is practicable for a company of Webis Holdings’ size, the relevant requirements of the Listing Rules of the UK Financial Services Authority and describes how the Board has applied the Principles of Good Governance relating to directors’ remuneration. As required by the Regulations, a resolution to approve the report will be proposed at the Annual General Meeting of the Company at which the financial statements will be approved. Remuneration Committee The Company has an established Remuneration Committee which has a formal constitution and is composed of the non-executive directors of the Company under the Chairmanship of Sir James Mellon. No director plays a part in any discussion about his own remuneration. Remuneration Policy The Remuneration Committee’s policy is to ensure that the remuneration packages offered are competitive and designed to attract, retain and motivate executive directors of the right calibre. The major elements of the remuneration package for the executive directors are: } Basic annual salary and benefits. } Eligibility to participate in an annual bonus scheme, when such scheme operates. } Share option incentives. } Contribution to a pension plan. The Committee seeks to ensure that bonus and share option incentives have a strong link with individual performance. Basic Salary The level of basic annual salary and benefits is determined by the Committee, taking into account the performance of the individual and information from independent sources on the rates of salary for similar jobs in comparable companies. Annual Bonus Payments It is anticipated that an annual bonus scheme will operate when Group profitability and cash flow allow. Bonuses for the executive directors are calculated with reference to the profit before tax as disclosed in the audited accounts of the Group, together with an assessment by the Committee of the director’s performance against agreed personal targets. Bonus payments are not pensionable. Share Options The Committee believes that share ownership by executives strengthens the link between their personal interests and those of shareholders. The Company currently operates one share option scheme, being the 2005 Share Option Plan. Options are granted to executives periodically at the discretion of the Remuneration Committee. The grant of share options is not subject to fixed performance criteria. This is deemed to be appropriate as it allows the Committee to consider the performance of the Group and the contribution of the individual executives and, as with annual bonus payments, illustrates the relative importance placed on performance related remuneration. Pensions The Group does not intend to contribute to the personal pension plans of directors in the forthcoming period. Service Contracts During the period under review, the service contracts of Mr G R Knowles and Mr E Comins provided for a notice period of six months. 12 Webis Holdings plc Annual Report and Financial Statements for the period ended 31 May 2013 Webis Holdings AR2013-proof-7.indd 12 22836.04 25 October 2013 2:24 PM PROOF 7 25/10/2013 14:29:34 Aggregate Directors’ Remuneration The total amounts for directors’ remuneration were as follows: Emoluments — salaries, bonuses and taxable benefits — fees Directors’ Emoluments Executive G R Knowles E Comins D Waddington Non-executive D H N Eke* J Mellon Sir James Mellon Aggregate emoluments * Paid to Burnbrae Limited. Basic salary £000 125 126 — — — — 251 Fees £000 Bonus £000 Termination payments £000 Benefits £000 — — — 23 — 15 38 — — — — — — — — — — — — — — 1 5 — — — — 6 Details of the options outstanding at 31 May 2013 are as follows: e c n a n r e v o G r u O 2013 £000 257 38 295 2013 Total £000 126 131 — 23 — 15 295 2012 £000 323 38 361 2012 Total £000 126 107 90 24 8 6 361 Name of director G R Knowles (a) 2005 Share Option Plan (b) 2005 Share Option Plan (c) 2005 Share Option Plan 27 May 2012 (Lapsed)/ granted in period 31 May 2013 Exercise price Date from which exercisable Expiry date 1,500,000 9,000,000 3,500,000 14,000,000 — — — — 1,500,000 9,000,000 3,500,000 14,000,000 10.4p 18 March 2008 18 March 2015 5p 30 March 2009 30 March 2016 20 Sept 2016 20 Sept 2009 6.0565p The market price of the shares at 31 May 2013 was 3.375p. The range during the period was 4.75p to 0.875p. Approval The report was approved by the Board of directors and signed on behalf of the Board. Denham Eke Chairman 25 October 2013 www.webisholdingsplc.com Stock Code: WEB 13 Webis Holdings AR2013-proof-7.indd 13 22836.04 25 October 2013 2:24 PM PROOF 7 25/10/2013 14:29:35 Report of the Independent Auditors, KPMG Audit LLC, to the members of Webis Holdings plc Scope of the audit of the financial statements An audit involves obtaining evidence about the amounts and disclosures in the financial statements sufficient to give reasonable assurance that the financial statements are free from material misstatement, whether caused by fraud or error. This includes an assessment of: whether the accounting policies are appropriate to the Group’s circumstances and have been consistently applied and adequately disclosed; the reasonableness of significant accounting estimates made by the directors; and the overall presentation of the 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 Acts 1931 to 2004 require us to report to you if, in our opinion: } proper books of account have not been kept by the Parent Company and proper returns adequate for our audit have not been received from branches not visited by us; or } the Parent Company’s statement of financial position and statement of comprehensive income are not in agreement with the books of account and returns; or } certain disclosures of directors’ Opinion on the financial statements In our opinion the financial statements: remuneration specified by law are not made; or } give a true and fair view of the state of the Group’s and Parent Company’s affairs as at 31 May 2013 and of the Group’s profit for the period then ended; } have been properly prepared in accordance with IFRSs as adopted by the European Union; and } have been properly prepared in accordance with the provisions of Companies Acts 1931 to 2004. } we have not received all the information and explanations we require for our audit. KPMG Audit LLC Chartered Accountants Heritage Court, 41 Athol Street Douglas, Isle of Man, IM99 1HN 25 October 2013 We have audited the financial statements of Webis Holdings plc for the period ended 31 May 2013 which comprise the Consolidated Statement of Comprehensive Income, the Consolidated and Parent Company Statements of Financial Position, the Consolidated Statement of Cash Flows, the Consolidated and Parent Company Statements 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 (IFRSs) as adopted by the European Union. This report is made solely to the Company’s members, as a body, in accordance with Section 15 of the Companies Act 1982. 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 Auditor As explained more fully in the Directors’ Responsibilities Statement set out on page 11, the directors are responsible for the preparation of financial statements that give a true and fair view. Our responsibility is to audit, and express an opinion on, the 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. 14 Webis Holdings plc Annual Report and Financial Statements for the period ended 31 May 2013 Webis Holdings AR2013-proof-7.indd 14 22836.04 25 October 2013 2:24 PM PROOF 7 25/10/2013 14:29:35 Consolidated Statement of Comprehensive Income For the period ended 31 May 2013 Turnover Cost of sales Betting duty paid Gross profit Personnel expenses Technology costs Other expenses Racetrack operating costs Depreciation and amortisation Results from operating activities Share-based payment expense Total operating profit/(loss) Net finance costs Taxation Total comprehensive profit/(loss) for the period attributable to owners Basic earnings/(loss) per share (pence) Diluted earnings/(loss) per share (pence) The notes on pages 19 to 34 form part of these financial statements. The directors believe that all results derive from continuous operations. Note 2 4 3 4 5 7 8 8 2013 £000 168,642 (163,091) (115) 5,436 (1,114) (431) (1,861) (1,536) (130) 364 — 364 (9) — 355 0.11 0.11 2012 £000 113,751 (110,531) (40) 3,180 (1,137) (334) (1,528) — (189) (8) — (8) (33) — (41) (0.02) (0.02) i s l a c n a n F r u O i www.webisholdingsplc.com Stock Code: WEB 15 Webis Holdings AR2013-proof-7.indd 15 22836.04 25 October 2013 2:24 PM PROOF 7 25/10/2013 14:29:35 Consolidated Statement of Financial Position As at 31 May 2013 2013 Group £000 2013 Company £000 2012 Group £000 2012 Company £000 Note Non-current assets Intangible Assets — goodwill Intangible Assets — other Property, equipment and motor vehicles Investments Bonds and deposits Total non-current assets Current assets Trade and other receivables Cash and cash equivalents – company funds Cash and cash equivalents – protected player funds Total current assets Current liabilities Trade and other payables Bank loans Total current liabilities Non-current liabilities Bank loans Total liabilities Net assets Equity Called up share capital Share premium account Share option reserve Retained losses Total equity 9 10 11 12 13 15 14 14 16 17 17 18 111 193 96 — 135 535 1,255 2,475 2,639 6,369 (3,765) (15) (3,780) (10) (3,790) 3,114 3,933 10,583 116 (11,518) 3,114 — — — 705 — 705 45 913 2,639 3,597 (1,942) — (1,942) — (1,942) 2,360 3,933 10,583 116 (12,272) 2,360 111 194 31 — — 336 621 1,071 1,612 3,304 (3,046) — (3,046) — (3,046) 594 2,302 10,049 116 (11,873) 594 — — — 705 — 705 30 83 1,612 1,725 (2,235) — (2,235) — (2,235) 195 2,302 10,049 116 (12,272) 195 The financial statements were approved by the Board of directors on 25 October 2013 Denham Eke Director Garry Knowles Director The notes on pages 19 to 34 form part of these financial statements. 16 Webis Holdings plc Annual Report and Financial Statements for the period ended 31 May 2013 Webis Holdings AR2013-proof-7.indd 16 22836.04 25 October 2013 2:24 PM PROOF 7 25/10/2013 14:29:35 i s l a c n a n F r u O i Consolidated Statement of Changes in Equity For the period ended 31 May 2013 Group Balance as at 29 May 2011 Loss for the period Transactions with owners: Arising on shares issued in the year Share-based payment expense Balance as at 27 May 2012 Profit for the period Transactions with owners: Arising on shares issued in the year Share-based payment expense Balance as at 31 May 2013 Company Balance as at 29 May 2011 Loss for the period Transactions with owners Arising on shares issued in the year Share-based payment expense Balance as at 27 May 2012 Loss for the period Transactions with owners: Arising on shares issued in the year Share-based payment expense Balance as at 31 May 2013 Called up share capital £000 2,302 — — — 2,302 — 1,631 — 3,933 Called up share capital £000 2,302 — — — 2,302 — 1,631 — 3,933 Share premium £000 10,049 — — — 10,049 — 534 — 10,583 Share premium £000 10,049 — — — 10,049 — 534 — 10,583 Share option reserve £000 116 — — — 116 — — — 116 Share option reserve £000 116 — — — 116 — — — 116 Retained earnings £000 (11,832) (41) — — (11,873) 355 — — (11,518) Retained earnings £000 (12,272) — — — (12,272) — — — (12,272) Total equity £000 635 (41) — — 594 355 2,165 — 3,114 Total equity £000 195 — — — 195 — 2,165 — 2,360 The notes on pages 19 to 34 form part of these financial statements. www.webisholdingsplc.com Stock Code: WEB 17 Webis Holdings AR2013-proof-7.indd 17 22836.04 25 October 2013 2:24 PM PROOF 7 25/10/2013 14:29:35 Consolidated Statement of Cash Flows For the period ended 31 May 2013 Net cash inflow from operating activities Cash flows from investing activities Interest received Purchase of intangible assets Purchase of property, equipment and motor vehicles Net cash outflow from investing activities Cash flows from financing activities Interest paid Loan financing received from Bank Loan financing received from Burnbrae Ltd Issue of equity shares Net cash inflow/(outflow) from financing activities Net increase in cash and cash equivalents Cash and cash equivalents at beginning of period Net cash and cash equivalents at end of period Cash and cash equivalents comprise Cash and deposits Cash generated from operations Profit/(loss) from operations Adjusted for: Depreciation and amortisation Share-based payment expense (Increase)/decrease in receivables Increase in payables Net cash inflow from operating activities The notes on pages 19 to 34 form part of these financial statements. 2013 £000 1,634 12 (102) (92) (182) (21) 25 175 800 979 2,431 2,683 5,114 5,114 5,114 364 130 — (769) 1,909 1,634 2012 £000 1,396 10 (126) (24) (140) (43) — — — (43) 1,213 1,470 2,683 2,683 2,683 (8) 190 — 217 997 1,396 18 Webis Holdings plc Annual Report and Financial Statements for the period ended 31 May 2013 Webis Holdings AR2013-proof-7.indd 18 22836.04 25 October 2013 2:24 PM PROOF 7 25/10/2013 14:29:36 i s l a c n a n F r u O i Notes to the Financial Statements For the period ended 31 May 2013 1 Reporting entity Webis Holdings plc is a company domiciled in the Isle of Man. The address of the Company’s registered office is Viking House, Nelson Street, Douglas, Isle of Man, IM1 2AH. The Group’s consolidated financial statements as at and for the period ended 31 May 2013 consolidate those of the Company and its subsidiaries (together referred to as “the Group”). 1.1 Basis of Preparation (a) Statement of compliance The consolidated financial statements have been prepared in accordance with International Financial Reporting Standards (“IFRSs”) and its interpretations as adopted by the European Union. The Group has continued to apply the accounting policies used in the 27 May 2012 annual report. New significant standards and interpretations not yet adopted A number of new standards, amendments to standards and interpretations are not yet effective for the period ended 31 May 2013, and have not been applied in preparing these consolidated financial statements: New/Revised International Financial Reporting Standards (IAS/IFRS) Presentation of Items of Other Comprehensive Income – Amendments to IAS 1 Transition guidance: Amendments to IFRS 10, IFRS 11 and IFRS 12 Annual Improvements to IFRSs – 2009-2011 Cycle IFRS 10 Consolidated Financial Statements IFRS 11 Joint Arrangements IFRS 12 Disclosure of Interests in Other Entities IFRS 13 Fair Value Measurement IAS 27 Separate Financial Statements (2011) IAS 28 Investments in Associates and Joint Ventures (2011) Defined Benefit Plans – Amendments to IAS 19 Disclosures – Offsetting Financial Assets and Financial Liabilities – Amendments to IFRS 7 Investment Entities (Amendments to IFRS 10, IFRS 12 and IAS 27) Offsetting Financial Assets and Financial Liabilities – Amendments to IAS 32 EU Effective Date (accounting periods commencing on or after) Endorsed (5 June 2012). Effective 1 July 2012. Endorsed (4 April 2013). Expected effective date 1 January 2014. Endorsed (27 March 2013). Effective 1 January 2013. Endorsed (11 December 2012). EU effective date 1 January 2014. To be adopted as part of suite of standards (IFRSs 10 to 12). Endorsed (11 December 2012). EU effective date 1 January 2014. To be adopted as part of suite of standards (IFRSs 10 to 12). Endorsed (11 December 2012). EU effective date 1 January 2014. To be adopted as part of suite of standards (IFRSs 10 to 12). Endorsed (11 December 2012). EU effective 1 January 2013. Endorsed (11 December 2012). EU effective date 1 January 2014. To be adopted as part of suite of standards (IFRSs 10 to 12). Endorsed (11 December 2012). EU effective date 1 January 2014. To be adopted as part of suite of standards (IFRSs 10 to 12). Endorsed (5 June 2012). EU effective 1 January 2013. Endorsed (13 December 2012). EU effective 1 January 2013. Not yet endorsed. IASB effective date 1 January 2014. Endorsed (13 December 2012). Early adoption permitted to allow application of amendments at same time as first applying IFRS 10. www.webisholdingsplc.com Stock Code: WEB 19 Webis Holdings AR2013-proof-7.indd 19 22836.04 25 October 2013 2:24 PM PROOF 7 25/10/2013 14:29:36 Notes to the Financial Statements continued For the period ended 31 May 2013 1 Reporting entity continued New/Revised International Financial Reporting Standards (IAS/IFRS) Recoverable amount disclosures for non-financial assets – Amendments to IAS 36 IFRS 9 Financial Instruments EU Effective Date (accounting periods commencing on or after) Not yet endorsed. IASB effective date 1 January 2014. Not yet endorsed. IASB effective date 1 January 2015. The directors do not expect the adoption of the other standards and interpretations to have a material impact on the Group’s financial statements in the period of initial application. (b) Basis of measurement and functional currency The Group consolidated financial statements are presented in Pounds Sterling, rounded to the nearest thousand. They are prepared under the historical cost convention except where assets and liabilities are required to be stated at their fair value. (c) Use of estimates and judgement The preparation of the Group financial statements in conformity with IFRS as adopted by the EU requires management to make judgements, estimates and assumptions that affect the application of policies and reported amounts of assets and liabilities, income and expenses. Although these estimates are based on management’s best knowledge and experience of current events and expected economic conditions, actual results may differ from these estimates. The directors believe the models and assumptions used to calculate the fair value of the share-based payments, outlined in note 18, are the most appropriate for the Group. The accounting policies set out below have been applied consistently to all periods presented in these consolidated financial statements. Going concern The directors have prepared projected cash flow information for the next 12 months and are satisfied that the Group has adequate resources to meets its obligations as they fall due. The directors consider that it is appropriate that these financial statements are prepared on the going concern basis as the Group is generating substantial positive cash flows, has a positive cash balance and minimal debt. 1.2 Summary of significant accounting policies The principal accounting policies applied in the preparation of these consolidated financial statements are set out below. These policies have been consistently applied to all the years presented unless otherwise stated. Basis of consolidation (i) The consolidated financial statements incorporate the results of Webis Holdings plc and its subsidiaries. Subsidiaries are consolidated from the date of acquisition, being the date on which the Group obtains control, and continue until the date that such control ceases. Control exists when the Group has the power, directly or indirectly, to govern the financial and operating policies of an entity so as to obtain benefits from its activities. (ii) Intra-group balances and transactions, and any unrealised income and expenses arising from intra-group transactions, are eliminated in preparing the consolidated financial statements and income and expenses arising from intra-group transactions are eliminated in preparing the consolidated financial statements. 20 Webis Holdings plc Annual Report and Financial Statements for the period ended 31 May 2013 Webis Holdings AR2013-proof-7.indd 20 22836.04 25 October 2013 2:24 PM PROOF 7 25/10/2013 14:29:36 i s l a c n a n F r u O i 1 Reporting entity continued Foreign currency translation The Group’s financial statements are presented in Pounds Sterling, which is the Company’s functional and presentational currency. All subsidiaries of the Group have Pounds Sterling as their functional currency, except for WatchandWager.com LLC which operates in USD. Foreign currency transactions are translated into the functional currency using the approximate exchange rate prevailing at the dates of transactions. Foreign exchange gains and losses resulting from the settlement of foreign currency transactions and from the translation at the period end exchange rate of monetary assets and liabilities denominated in foreign currencies are recognised in the income statement. Non-monetary assets and liabilities that are measured in terms of historical costs in a foreign currency are translated using the exchange rate at the date of the transaction. Non-monetary assets and liabilities denominated in foreign currencies that are stated at fair value are translated into the functional currency using the exchange rates ruling at the date fair value was determined. Revenue recognition and turnover Turnover represents the amounts staked in respect of bets placed by customers on events which occurred during the period. Cost of sales represents payouts to customers, together with Betting Duty payable and commissions and royalties payable to agents and suppliers of software. Open betting positions are carried at fair market value. Segmental reporting Segmental reporting is based on the business areas in accordance with the Group’s internal reporting structure. The Group determines and presents segments based on the information that internally is provided to the Managing Director, the Group’s chief operating decision maker. This change in accounting policy is due to the adoption of IFRS 8 Operating Segments by the EU. Previously operating segments were determined and presented in accordance with IAS 14 Segment reporting. An operating segment is a component of the Group and engages in business activities from which it may earn revenues and incur expenses. An operating segment’s operating results are reviewed regularly by the Managing Director to make decisions about resources to be allocated to the segment and assess its performance, and for which discrete financial information is available. Financing costs Interest payable on borrowings is calculated using the effective interest rate method. Deferred income tax Deferred taxation is provided in full, using the liability method, on timing differences arising between the tax bases of assets and liabilities and their carrying amounts in the consolidated financial statements. Deferred income tax is determined using tax rates (and laws) that have been enacted or substantially enacted by the balance sheet date and are expected to apply when the related deferred tax is realised. Deferred tax assets are recognised to the extent that it is probable that future taxable profit will be available against which the temporary differences can be utilised. www.webisholdingsplc.com Stock Code: WEB 21 Webis Holdings AR2013-proof-7.indd 21 22836.04 25 October 2013 2:24 PM PROOF 7 25/10/2013 14:29:36 Notes to the Financial Statements continued For the period ended 31 May 2013 1 Reporting entity continued Intangible assets — Goodwill Goodwill represents the excess of fair value consideration over the fair value of the identifiable assets and liabilities acquired, arising on the acquisition of subsidiaries. Goodwill is included in non-current assets. Goodwill is reviewed at least annually for impairment and is carried at costs less accumulated impairment losses. Goodwill arising on acquisitions before the transition date of 29 May 2006 has been retained at the previous UK GAAP value and is no longer amortised but is tested annually for impairment. Intangible assets — Other Other intangible assets comprise website design and development costs, software licences and registered trademarks and are stated at acquisition cost less accumulated amortisation. Carrying amounts are reviewed at each financial position date for impairment. Costs that are directly attributable to the development of websites are recognised as intangible assets provided that the intangible asset will generate probable economic benefits and income streams through external use in line with SIC 32 “Intangible assets—website costs”. Content development and operating costs are expensed as incurred. Careful judgement by the directors is applied when deciding whether recognition requirements for development costs have been met and whether the assets will generate probable future economic benefit. Amortisation is calculated using the straight-line method, at annual rates estimated to write off the assets over their expected useful lives as follows: Website design & development Software licences Trademarks 33.33% 33.33% 33.33% Property, equipment and motor vehicles Items of property, equipment and motor vehicles are stated at historical cost less accumulated depreciation (see below) and impairment losses. Historical cost includes expenditure that is directly attributable to the acquisition of the items. The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at the financial position date. An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s carrying amount is greater than its estimated recoverable amount. Assets are depreciated over their expected useful lives as follows: Equipment Fixtures, fittings & track equipment Motor vehicles 33.33% 33.33% 33.33% 22 Webis Holdings plc Annual Report and Financial Statements for the period ended 31 May 2013 Webis Holdings AR2013-proof-7.indd 22 22836.04 25 October 2013 2:24 PM PROOF 7 25/10/2013 14:29:36 i s l a c n a n F r u O i 1 Reporting entity continued Impairment of assets Goodwill arising on acquisitions and other assets that have an indefinite useful life and are not subject to amortisation are reviewed at least annually for impairment. Other intangible assets, property, plant and equipment are reviewed for impairment whenever there is an indication that the carrying amount of the asset may not be recoverable. If the recoverable amount of an asset is less than its carrying amount, an impairment loss is recognised. Recoverable amount is the higher of fair value less costs to sell and value in use. If at the financial position date there is any indication that an impairment loss is recognised in prior periods for an asset other than goodwill that no longer exists, the recoverable amount is reassessed and the asset is reflected at the recoverable amount. Share-based payment expense For all the employee share options granted, an expense is recognised in the income statement with a corresponding credit to equity. The equity share-based payment is measured at fair value at the date of the grant. Fair value is determined by reference to option pricing models, principally the Black–Scholes model. If vesting periods or other 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. Leasing Payments made under operating leases are charged to the income statement on a straight-line basis over the period of the lease. Equity Share capital is determined using the nominal value of shares that have been issued. The share premium account includes any premiums received on the initial issuing of the share capital. Any transaction costs associated with the issuing of shares are deducted from the premium paid. Equity settled share-based employee remuneration is credited to the share option reserve until related stock options are exercised. On exercise or lapse, amounts recognised in the share option reserve are taken to retained earnings. Retained earnings include all current and prior period results as determined in the income statement and any other gains or losses recognised in the Statement of Changes in Equity. Financial instruments Non-derivative financial instruments include trade and other receivables, cash and cash equivalents, loans and borrowings and trade and other payables. Ante-post sports bets are recognised when the Company becomes party to the contractual agreements of the instrument. Financial assets and financial liabilities are recognised on the Group’s balance sheet when the Group becomes party to the contractual terms of the instrument. Transaction costs are included in the initial measurement of financial instruments, except financial instruments classified as at fair value through profit and loss. The subsequent measurement of financial instruments is dealt with below. www.webisholdingsplc.com Stock Code: WEB 23 Webis Holdings AR2013-proof-7.indd 23 22836.04 25 October 2013 2:24 PM PROOF 7 25/10/2013 14:29:36 Notes to the Financial Statements continued For the period ended 31 May 2013 1 Reporting entity continued Trade and other receivables Trade and other receivables do not carry any interest and are stated at their nominal amounts as reduced to equal the estimated present value of their future cash flows. Cash and cash equivalents Cash and cash equivalents are defined as cash in bank and in hand as well as bank deposits, money held for processors and cash balances held on behalf of players. Cash equivalents are held for the purpose of meeting short-term cash commitments rather than for investment or other purposes. Bank borrowings Interest bearing bank borrowings and overdrafts are recorded at the proceeds received net of direct issue costs. Finance charges, including premiums payable on settlement or redemption and direct issue costs are charged on an accrual basis using the effective interest method and are added to the carrying amount of the instrument to the extent they are not settled in the period in which they arise. Trade and other payables Trade and other payables are non-interest bearing and are stated at amortised cost. Equity instruments Equity instruments issued by the Group are recorded at proceeds received, net of direct costs. Open sports bets The Group may have at any point in time, an exposure on ante-post sports bets. These bets meet the definition of a financial liability under International Accounting Standard 32 “Financial Instruments: Disclosure and Presentation”, and therefore are recorded at fair value. 24 Webis Holdings plc Annual Report and Financial Statements for the period ended 31 May 2013 Webis Holdings AR2013-proof-7.indd 24 22836.04 25 October 2013 2:24 PM PROOF 7 25/10/2013 14:29:36 i s l a c n a n F r u O i Asia Pacific UK & Ireland Europe Rest of the World United States Caribbean Asia Pacific UK & Ireland Rest of the World 2 Segmental Analysis Turnover Sportsbook Pari-mutuel and Racetrack Operations Profit/(loss) before tax Sportsbook Pari-mutuel and Racetrack Operations Group Net assets Sportsbook Pari-mutuel and Racetrack Operations Group 3 Share-based payment expense Share options 4 Total operating profit/(loss) Total operating profit/(loss) is stated after charging: Auditors’ remuneration: Group — audit Company — audit Depreciation of property and equipment Amortisation of intangible assets Exchange losses Operating lease rentals — other than plant, equipment and Harness Racetrack Operating lease rentals – Harness Racetrack Directors’ fees 2013 £000 2012 £000 77,056 10,833 7,246 1,828 54,820 9,901 6,419 399 140 168,642 247 108 – 355 (723) 1,758 2,079 3,114 2013 £000 – – 67,001 10,360 4,684 1,042 17,119 8,921 4,624 – – 113,751 (214) 173 – (41) (970) 1,650 (86) 594 2012 £000 – – 2013 £000 2012 £000 85 21 27 103 94 42 104 38 71 20 27 163 22 44 – 38 Cal Expo Harness racetrack incurred £1,536,000 of operating costs in its first year of operation. Included within this are staff costs of £694,000, professional costs of £283,000, property costs of £216,000 and insurance costs of £92,000. www.webisholdingsplc.com Stock Code: WEB 25 Webis Holdings AR2013-proof-7.indd 25 22836.04 25 October 2013 2:24 PM PROOF 7 25/10/2013 14:29:36 Notes to the Financial Statements continued For the period ended 31 May 2013 5 Net finance costs Bank interest receivable Bank interest payable Loan interest payable Net finance costs 6 Staff numbers and cost Average number of employees (including directors) – Sportsbook Average number of employees – Pari-mutuel and Racetrack Operations The aggregate payroll costs of these persons were as follows: Sportsbook Wages and salaries Social security costs Share-based costs Pari-mutuel and Racetrack Operations Wages and salaries Social security costs Share-based costs 7 Taxation Profits/(losses) before tax Tax charge at IOM standard rate (0%) Adjusted for: Tax credit for US tax losses (at 15%) Add back deferred tax losses not recognised Tax charge for the year 2013 £000 12 12 (1) (20) (21) (9) 2013 19 64 2013 £000 593 59 – 652 2013 £000 930 97 – 1,027 2013 £000 355 – (21) 21 – 2012 £000 10 10 – (43) (43) (33) 2012 22 10 2012 £000 570 58 – 628 2012 £000 438 43 – 481 2012 £000 (41) – (22) 22 – 26 Webis Holdings plc Annual Report and Financial Statements for the period ended 31 May 2013 Webis Holdings AR2013-proof-7.indd 26 22836.04 25 October 2013 2:24 PM PROOF 7 25/10/2013 14:29:36 i s l a c n a n F r u O i 8 Earnings per ordinary share The calculation of the basic earnings per share is based on the earnings attributable to ordinary shareholders divided by the weighted average number of shares in issue during the period. The calculation of diluted earnings per share is based on the basic earnings per share, adjusted to allow for the issue of shares, on the assumed conversion of all dilutive share options. An adjustment for the dilutive effect of share options and convertible debt in the previous period has not been reflected in the calculation of the diluted loss per share, as the effect would have been anti-dilutive. Profit/(loss) for the period Weighted average number of ordinary shares in issue Diluted number of ordinary shares Basic earnings/(loss) per share Diluted earnings/(loss) per share 9 Intangible assets — goodwill Group Cost Balance at 27 May 2012 Additions during the period Balance at 31 May 2013 Amortisation and Impairment At 27 May 2012 Amortisation for the period At 31 May 2013 Net book value At 31 May 2013 At 27 May 2012 2013 £000 355 2012 £000 (41) No. No. 330,148,762 344,148,762 0.11 0.11 230,171,644 230,171,644 (0.02) (0.02) Goodwill £000 111 – 111 – – – 111 111 The goodwill relates to the acquisition of the pari-mutuel business which is both a cash generating unit and a reportable segment, including goodwill arising on the acquisition in 2010 of WatchandWager.com LLC, a US registered entity licenced for pari-mutuel wagering in North Dakota. The Group tests intangible assets annually for impairment, or more frequently if there are indications that the intangible assets may be impaired. The recoverable amount of goodwill on both pari-mutuel business units has been determined based on a value in use calculation using cash flow projections based on financial budgets approved by the Directors. The key assumptions on which the Directors have based their three year discounted cash flow analysis are a pre-tax discount rate of 15% and growth rate in pari-mutuel business of 2%. The assumption of growth rate in pari-mutuel business has been based on the historic performance of the business as well as forecast performance based on the Board’s plan to invest further in this business. In respect of the value in use calculations, cash flows have been considered for both the conservative and the full forecast potential of future cash flows with no impact to the valuation of goodwill. www.webisholdingsplc.com Stock Code: WEB 27 Webis Holdings AR2013-proof-7.indd 27 22836.04 25 October 2013 2:24 PM PROOF 7 25/10/2013 14:29:36 Notes to the Financial Statements continued For the period ended 31 May 2013 10 Intangible assets — other Cost Balance at 27 May 2012 Additions during the period At 31 May 2013 Amortisation and Impairment At 27 May 2012 Amortisation for the period At 31 May 2013 Net book value At 31 May 2013 At 27 May 2012 11 Property, equipment and motor vehicles Group Cost At 27 May 2012 Additions Disposals At 31 May 2013 Depreciation At 27 May 2012 Charge for the period At 31 May 2013 Net book value At 31 May 2013 At 27 May 2012 Company Cost At 27 May 2012 Additions Disposals At 31 May 2013 Depreciation At 27 May 2012 Charge for the period At 31 May 2013 Net book value At 31 May 2013 At 27 May 2012 Software & development costs Group £000 Company £000 2,758 102 2,860 2,564 103 2,667 193 194 Fixtures, Fittings & Track Equipment £000 Computer Equipment £000 Motor Vehicles £000 1,256 71 – 1,327 1,244 16 1,260 67 12 285 16 – 301 282 5 287 14 3 17 5 – 22 1 6 7 15 16 Computer Equipment £000 Fixtures & Fittings £000 263 – – 263 263 – 263 – – 79 – – 79 79 – 79 – – 33 – 33 33 – 33 – – Total £000 1,558 92 – 1,650 1,527 27 1,554 96 31 Total £000 342 – – 342 342 – 342 – – 28 Webis Holdings plc Annual Report and Financial Statements for the period ended 31 May 2013 Webis Holdings AR2013-proof-7.indd 28 22836.04 25 October 2013 2:24 PM PROOF 7 25/10/2013 14:29:37 12 Investments Company As at 27 May 2012 & 31 May 2013 Details of investments at 31 May 2013 are as follows: Investment in subsidiary companies £000 705 Subsidiaries Country of incorporation Activity Holding (%) i s l a c n a n F r u O i WatchandWager.com Limited Isle of Man Technical Facilities & Services Limited Isle of Man Operation of interactive wagering totaliser hub Provision of IT & betting systems to group companies Sportsbook trading company Licence holder for games and casinos betinternet.com (IOM) Limited betinternet.com NV WatchandWager.com LLC Isle of Man Netherlands Antilles United States of America Operation of interactive wagering B.E. Global Services Limited Isle of Man Webis Ireland Limited Ireland 13 Bonds and deposits totaliser hub and harness racetrack Provision of IT & marketing services to the Sportsbook trading company Non-trading 100 100 100 100 100 100 100 Bonds and deposits which expire within one year Bonds and deposits which expire within one to two years Bonds and deposits which expire within two to five years Group Company 2012 £000 2013 £000 2012 £000 – – – – – – – – – – – – 2013 £000 – – 135 135 Bonds and deposits totalling £135,117 (US$205,850) have been paid in relation to the operation of the Cal Expo racetrack in Sacramento, California. A rent deposit of $200,000 was paid to California Exposition & State Fair and is for a term of 5 years (ending in 2017). A sales tax deposit of $5,850 was paid to the State Board of Equalization and is required until such time that the Harness racetrack is no longer operated by WatchandWager.com LLC. 14 Cash and cash equivalents The Group holds funds for operational requirements, shown as “company funds” and on behalf of its Isle of Man regulated customers, shown as “protected player funds”. Protected player funds are held in fully protected client accounts within an Isle of Man regulated bank. A security assignment over all monies that had been held with AIB Bank (CI) Limited, Isle of Man Branch, in the name of Betinternet (IOM) Limited and was registered with the Isle of Man Companies Registry was cancelled during the year. www.webisholdingsplc.com Stock Code: WEB 29 Webis Holdings AR2013-proof-7.indd 29 22836.04 25 October 2013 2:24 PM PROOF 7 25/10/2013 14:29:37 Notes to the Financial Statements continued For the period ended 31 May 2013 15 Trade and other receivables Trade receivables Other receivables and prepayments 16 Trade and other payables Trade payables Amounts due to Group undertakings Open sports bets Taxes and national insurance Accruals and other payables Group Company 2012 £000 409 212 621 2013 £000 – 45 45 Group Company 2012 £000 1,679 – 8 16 1,343 3,046 2013 £000 45 1,861 – – 36 1,942 2012 £000 – 30 30 2012 £000 18 949 – – 1,268 2,235 2013 £000 364 891 1,255 2013 £000 2,664 – 6 34 1,061 3,765 Amounts due to Group undertakings are unsecured, interest free and repayable on demand. Included within trade payables are amounts due to customers of £2,499,893. 17 Bank loans Due within one year Due within one to two years Due within two to five years Group Company 2013 £000 15 10 – 25 2012 £000 – – – – 2013 £000 – – – – 2012 £000 – – – – The bank loan is provided by Conister Bank Limited (note 22), carries an interest rate of 6.5% per annum on the original principal amount and is fully repayable by 14 January 2015. 18 Share Capital Authorised Ordinary shares of 1p each Allotted, issued and fully paid At 27 May 2012: ordinary shares of 1p each Issued during the period At 31 May 2013: ordinary shares of 1p each No. 600,000,000 230,171,644 163,166,666 393,338,310 2013 £000 6,000 2,302 1,631 3,933 2012 £000 4,000 2,302 – 2,302 Options Movements in share options during the period ended 31 May 2013 were as follows: Company At 27 May 2012 — 1p ordinary shares Options granted Options lapsed Options exercised At 31 May 2013 — 1p ordinary shares No. 14,000,000 – – – 14,000,000 30 Webis Holdings plc Annual Report and Financial Statements for the period ended 31 May 2013 Webis Holdings AR2013-proof-7.indd 30 22836.04 25 October 2013 2:24 PM PROOF 7 25/10/2013 14:29:37 i s l a c n a n F r u O i 18 Share Capital Authorised continued Details of options at 31 May 2013 were as follows: 2005 Share Option Plan 2005 Share Option Plan 2005 Share Option Plan Price per share Options granted Exercisable between 10.4p 5.0p 6.0565p 1,500,000 9,000,000 3,500,000 14,000,000 March 2008 and March 2015 March 2009 and March 2016 September 2009 and September 2016 The fair value of services received in return for share options granted is based on the fair value of share options granted, measured using the Black–Scholes model with the following inputs: Share price at date of grant Option exercise price at date of grant Expected volatility Option life Expected dividends Risk-free interest rate varies from varies from 2005 Share Option Plan 5.0p to 10.4p 5.0p to 10.4p 20% 3.5 years 0% 4.60% Expected volatility was determined by calculating the historical volatility of the Company’s weighted average share price over the period. The expected life used has been adjusted based on management’s best estimate for the effects of non-transferability, exercise restrictions and behavioural considerations. Expense in profit and loss account: Share options 19 Open sports bets liabilities 2013 £000 – – 2012 £000 – – By the nature of the business, a stake can be received from a customer in respect of some event happening in the future, and hence the level of any actual liability to the Group cannot be assessed until after that event has occurred, although the maximum potential liability can be determined. As at the financial position date there were £5,546 (2012: £8,035) of such stakes that had been received where the event to which they related was after the financial position date. Accordingly, such amount has been reflected as open sports bets in the balance sheet (see note 16). The maximum possible liability on open sports bets is £0.032m (2012: £0.059m). 20 Capital commitments As at 31 May 2013, the Group had no capital commitments (2012: £Nil). 21 Operating lease commitments At 31 May 2013, the Group was committed to future minimum lease payments of: Leases which expire within one year Leases which expire between one and two years Leases which expire between two and five years www.webisholdingsplc.com Stock Code: WEB 2013 £000 17 27 108 2012 £000 27 – – 31 Webis Holdings AR2013-proof-7.indd 31 22836.04 25 October 2013 2:24 PM PROOF 7 25/10/2013 14:29:37 Notes to the Financial Statements continued For the period ended 31 May 2013 22 Related party transactions Identity of related parties The Group has a related party relationship with its subsidiaries (see note 12), and with its Directors and executive officers and with Burnbrae Ltd (significant shareholder) and with Conister Bank Ltd (common director and shareholder). Transactions with and between subsidiaries Transactions with and between the subsidiaries in the Group which have been eliminated on consolidation are considered to be related party transactions. Transactions with entities with significant influence over the Group Rental and service charges of £29,391 (2012: £28,957), loan interest of £20,805 (2012: £42,873) and Directors’ fees of £23,333 (2012: £24,000) were charged in the period by Burnbrae Limited of which Denham Eke is a common director. Burnbrae Limited had also provided an unsecured loan of £1,300,000, which was converted into share capital in the period (2012: £1,125,000). A loan of £25,260 was owed to Conister Bank Limited (note 17) at the period end (2012: £Nil). Transactions with other related parties Cash deposits totalling £3,652,419 (2012: £1,612,039) were held with Conister Bank Limited at the period end. Transactions with key management personnel See page 13 for disclosure of Directors’ Emoluments. 23 Financial risk management Capital structure The Group’s capital structure is as follows: Cash and cash equivalents Loans and similar income Net funds Shareholders’ equity Capital employed 2013 £000 5,114 (25) 5,089 (3,114) 1,975 2012 £000 2,683 (1,125) 1,558 (594) 964 The Group’s principal financial instruments comprise cash and cash equivalents, trade receivables and payables that arise directly from its operations. The main purpose of these financial instruments is to finance the Group’s operations. The existence of the financial instruments exposes the Group to a number of financial risks, which are described in more detail below. The principal risks which the Group is exposed to relate to liquidity risks, credit risks, interest rate risks and foreign exchange risks. Liquidity risks Liquidity risk is the risk that the Group will be unable to meet its financial obligations as they fall due. The Group’s objective is to maintain continuity of funding through trading and share issues but to also retain flexibility through the use of short-term loans if required. Management controls and monitors the Group’s cash flow on a regular basis, including forecasting future cash flow. Banking facilities are kept under review to ensure they meet the Group’s requirements. Funds equivalent to customer balances are held in designated bank accounts to ensure that GSC player protection principles are met. The directors anticipate that the business will continue to generate positive cash flow in the forthcoming period to meet its financial obligations. The Group had an unsecured loan facility with Burnbrae Limited of £1,300,000 with an interest rate of base plus 4% (2012: £1,125,000). The loan and interest were converted into share capital in the period. The following are the contractual maturities of financial liabilities: 32 Webis Holdings plc Annual Report and Financial Statements for the period ended 31 May 2013 Webis Holdings AR2013-proof-7.indd 32 22836.04 25 October 2013 2:24 PM PROOF 7 25/10/2013 14:29:37 i s l a c n a n F r u O i 23 Financial risk management continued 2013 Financial liabilities Trade creditors and deferred income Income tax and national insurance Other creditors 2012 Financial liabilities Trade creditors Income tax and national insurance Other creditors Carrying amount £000 Contractual cash flow £000 6 months or less £000 2,670 34 760 3,464 (2,670) (34) (760) (3,464) (2,670) (34) (760) (3,464) Carrying amount £000 Contractual cash flow £000 1,687 16 1,140 2,843 (1,687) (16) (1,165) (2,868) 6 months or less £000 (1,687) (16) (1,165) (2,868) Up to 1 year £000 – – – – Up to 1 year £000 – – – – 1–5 years £000 – – – – 1–5 years £000 – – – – Credit risk Credit risk is the risk that one party to a financial instrument will cause a financial loss for the other party by failing to discharge an obligation. Classes of financial assets — carrying amounts Cash and cash equivalents Trade and other receivables 2013 £000 5,114 1,255 6,369 2012 £000 2,683 621 3,304 Generally, the maximum credit risk exposure of financial assets is the carrying amount of the financial assets as shown on the face of the balance sheet (or in the notes to the financial statements). Credit risk, therefore, is only disclosed in circumstances where the maximum potential loss differs significantly from the financial asset’s carrying amount. The maximum exposure to credit risks for trade receivables any business segment: Pari-mutuel Sportsbook 2013 £000 1,019 236 1,255 2012 £000 447 174 621 Of the above receivables, £356,000 (2012: £399,000) relates to amounts owed from US racing tracks. These receivables are actively monitored to avoid significant concentration of credit risk and the Directors consider there to be no significant concentration of credit risk. The directors consider that all the above financial assets that are not impaired for each of the reporting dates under review are of good credit quality. No amounts were considered past due at the year end (2012: £Nil). The credit risk for liquid funds and other short-term financial assets is considered negligible, since the counterparties are reputable banks with high quality external credit ratings. www.webisholdingsplc.com Stock Code: WEB 33 Webis Holdings AR2013-proof-7.indd 33 22836.04 25 October 2013 2:24 PM PROOF 7 25/10/2013 14:29:37 Notes to the Financial Statements continued For the period ended 31 May 2013 23 Financial risk management continued Interest rate risk The Group finances its operations mainly through capital with limited levels of borrowings. Cash at bank and in hand earns negligible interest at floating rates, based principally on short-term inter bank rates. Any movement in interest rates would not be considered to have any significant impact on net assets at the balance sheet date. Foreign currency risks The Group operates internationally and is subject to transactional foreign currency exposures primarily with respect to the Euro, US Dollar and Singapore Dollar. The Group does not actively manage the exposures but regularly monitors the Group’s currency position and exchange rate movements and makes decisions as appropriate. At the balance sheet date the Group had the following exposure: 2013 Current assets Current liabilities Short-term exposure 2012 Current assets Current liabilities Short-term exposure HKD £000 GBP £000 EUR £000 USD £000 SGD £000 NOK £000 DKK £000 AUD £000 CAD £000 CHF £000 CNY £000 SEK £000 72 2,372 (412) (27) 45 1,960 48 3,515 (174) (3,059) 456 (126) 125 (56) 69 1 (2) (1) 5 (2) 3 3 (3) – 4 (1) 3 3 (1) 2 – (–) – 221 (43) 178 HKD £000 GBP £000 EUR £000 USD £000 SGD £000 NOK £000 DKK £000 AUD £000 CAD £000 CHF £000 CNY £000 SEK £000 23 1,658 (50) (1,697) (39) (27) 41 1,510 (189) (1,004) 506 (148) 36 (80) (44) – (4) (4) 3 (–) 3 4 (6) (2) 3 (–) 3 1 (–) (1) – (6) (6) 25 (10) (15) Total £000 6,369 (3,780) 2,589 Total £000 3,304 (3,046) 258 The following table illustrates the sensitivity of the net result for the period and equity in regards to the Group’s financial assets and financial liabilities and the Sterling–US Dollar exchange rate, Sterling–Euro exchange rate and Sterling–Singapore Dollar exchange rate. A 5% weakening of Sterling against the following currencies at 31 May 2013 would have increased equity and profit and loss by the amounts shown below: 2013 Current assets Current liabilities Net assets 2012 Current assets Current liabilities Net assets USD £000 176 (153) 23 USD £000 80 (50) 30 EUR £000 2 (9) (7) EUR £000 2 (10) (8) SGD £000 6 (3) 3 SGD £000 2 (4) (2) Total £000 184 (165) 19 Total £000 84 (64) 20 A 5% strengthening of Sterling against the above currencies would have had the equal but opposite effect on the above currencies to the amounts shown above on the basis that all other variables remain constant. 24 Controlling party and ultimate controlling party The directors consider the ultimate controlling party to be Burnbrae Limited and its beneficial owner Jim Mellon by virtue of their combined shareholding of 68.19%. 34 Webis Holdings plc Annual Report and Financial Statements for the period ended 31 May 2013 Webis Holdings AR2013-proof-7.indd 34 22836.04 25 October 2013 2:24 PM PROOF 7 25/10/2013 14:29:37 i s l a c n a n F r u O i Notice of Meeting NOTICE IS HEREBY GIVEN that the Annual General Meeting of Webis Holdings plc (the ‘‘Company”) will be held at The Claremont Hotel, 18/19 Loch Promenade, Douglas, Isle of Man, on 3 December 2013 at 11 am for the purpose of transacting the following business: Ordinary Business 1 To receive and adopt the report of the directors and the accounts for the period ended 31 May 2013. 2 To re-elect as a director Mr D H N Eke who retires by rotation and, being eligible, offers himself for re-election in accordance with the Company’s Articles of Association. 3 To reappoint KPMG Audit LLC as auditor and to authorise the directors to determine their remuneration. Special Business To consider and, if thought fit, to pass the following resolutions: As an Ordinary Resolution 4 That the authority granted by special resolution to the directors of the Company to allot relevant securities up to an amount equal to but not exceeding the authorised but unissued share capital of the Company for the time being which was passed at the Annual General Meeting of the Company held on 9 December 2002 be renewed pursuant to the power provided by Article 6(C) of the Company’s Articles of Association, that such renewal of authority be for the exercise of that power generally and unconditionally and in all respects in the same terms as originally granted, and that such authority shall expire at the conclusion of the next Annual General Meeting of the Company after the date of passing of this Resolution unless renewed, varied or revoked by the Company in General Meeting. As a Special Resolution 5 The directors of the Company be and they are hereby empowered pursuant to Article 8 of the Articles of Association of the Company (the “Articles”) to allot equity securities (as defined in Article 7(H) of the Articles) pursuant to the authority conferred on the directors to allot relevant securities by Resolution 4 above as if Article 7(A) of the Articles did not apply to such allotment PROVIDED THAT this power shall be limited to: (i) the allotment of equity securities in connection with a rights issue in favour of ordinary shareholders where the equity securities are issued proportionally (or as nearly as may be) to the respective number of ordinary shares held by such shareholders (but subject to such exclusions or other arrangements as the directors may deem necessary or expedient to deal with issues arising under the laws of any territory or the requirements of any regulatory body or any stock exchange in any territory or the fixing of exchange rates applicable to any such equity securities where such equity securities are to be issued to shareholders in more than one territory, or legal or practical problems in respect of overseas shareholders, fractional entitlements or otherwise howsoever); (ii) the allotment of equity securities to holders of any options under any share option scheme of the Company for the time being in force, on the exercise by them of any such options; and (iii) the allotment (otherwise than pursuant to paragraphs (i) or (ii) above) of equity securities up to a maximum aggregate nominal value equal to 50% of the issued ordinary share capital of the Company for the time being. The power hereby conferred shall expire at the conclusion of the next Annual General Meeting of the Company after the date of passing of this Resolution unless such power shall be renewed in accordance with and subject to the provisions of the said Article 8, save that the Company may before such expiry make an offer or agreement which would or might require equity securities to be allotted after such expiry and the directors may allot equity securities pursuant to such offer or agreement as if the power conferred hereby had not expired. As Ordinary Resolutions 6 That in accordance with Article 12 of the Company’s Articles of Association and with Section 13 of the Companies Act 1992 the Company be generally and unconditionally authorised to make market purchases (as defined by Section 13(2) of the Companies Act 1992) of ordinary shares of 1 pence each in its capital, provided that: (a) the maximum number of shares that may be acquired is 39,334,000; (b) the minimum price that may be paid for the shares is 1 pence; (c) the maximum price that may be paid is, for a share the Company contracts to purchase on any day, a sum equal to 105% of the average of the upper and lower quotations on the Daily Official List of the London Stock Exchange for the ordinary shares of the Company on the five business days immediately preceding that day; and www.webisholdingsplc.com Stock Code: WEB 35 Webis Holdings AR2013-proof-7.indd 35 22836.04 25 October 2013 2:24 PM PROOF 7 25/10/2013 14:29:38 Notice of Meeting continued (d) the authority conferred by this resolution shall expire at the conclusion of the next Annual General Meeting of the Company after the date of the passing of this Resolution unless renewed, varied or revoked by the Company in General Meeting, but not so as to prejudice the completion of a purchase contracted before that date. 7 That the Report of the remuneration committee be received and adopted. By order of the Board Chris Allen Secretary 25 October 2013 Registered Office: Viking House Nelson Street, Douglas Isle of Man, IM1 2AH Notes 1 Members are entitled to appoint a proxy to exercise all or any of their rights to attend and vote on their behalf at the meeting. A proxy need not be a shareholder of the Company. A shareholder may appoint more than 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 shareholder. To appoint more than one proxy you may photocopy the proxy form accompanying this notice. Please indicate the proxy holder’s name and the number of shares in relation to which they are authorised to act as your proxy (which, in aggregate, should not exceed the number of shares held by you). Please also indicate if the proxy instruction is one of multiple instructions being given. All forms must be signed and should be returned together in the same envelope. 2 To be valid, the form of proxy and the power of attorney or other authority (if any) under which it is signed or a notarially certified or office copy of such power or authority must be lodged at the offices of the Company’s registrars,Capita Asset Services, PXS, 34 Beckenham Road, Beckenham, Kent, BR3 4TU by hand, or sent by post, so as to be received not less than 48 hours before the time fixed for the holding of the meeting or any adjournment thereof (as the case may be). 3 The completion and return of a form of proxy will not preclude a member from attending in person at the meeting and voting should he wish to do so. 4 In the case of a corporation, the form of proxy must be executed under its common seal or the hand of an officer or attorney duly authorised. 5 A member may appoint a proxy of its own choice. If the name of the member’s choice is not entered in the space provided on the form of proxy, the return of the form of proxy duly signed will authorise the chairman of the meeting to act as that member’s proxy. 6 To abstain from voting on a resolution, select the relevant ‘withheld’ box. A vote withheld is not a vote in law and will not be counted in the calculation of votes for or against the resolution. If no voting indication is given, your proxy will vote or abstain from voting at his or her discretion. Your proxy will vote (or abstain from voting) as he or she thinks fit in relation to any other matter which is put before the meeting. 7 Pursuant to regulation 22 of the Uncertificated Securities Regulations 2005, the Company has specified that only those members entered on the register of members at 6 pm on 1 December 2013 shall be entitled to attend and vote at the meeting. Changes to the register after 6 pm on 1 December 2013 shall be disregarded in determining the rights of any person to attend and vote at the meeting. 8 Where a corporation is to be represented at the meeting by a personal representative, such corporation must deposit a certified copy of the resolution of its directors or other governing body authorising the appointment of the representative at the Company’s registered office: Viking House, Nelson Street, Douglas, Isle of Man, IM1 2AH not later than 48 hours before the time appointed for the holding of the meeting. 36 Webis Holdings plc Annual Report and Financial Statements for the period ended 31 May 2013 Webis Holdings AR2013-proof-7.indd 36 22836.04 28 October 2013 11:53 AM PROOF 7 28/10/2013 11:54:10 Company Information Directors Denham Eke Non-Executive Chairman Garry Knowles Managing Director Ed Comins Pari-mutuel Operations Director Sir James Mellon Non-Executive Director Secretary Chris Allen Registered Office Viking House Nelson Street Douglas, Isle of Man IM1 2AH Bankers Conister Bank Limited Clarendon House, Victoria Street Douglas, Isle of Man IM1 2LN Auditors KPMG Audit LLC Chartered Accountants Heritage Court 41 Athol Street Douglas, Isle of Man IM99 1HN Nominated Adviser and Broker Beaumont Cornish Limited 2nd Floor, Bowman House 29 Wilson Street London EC2M 2SJ Legal Advisors Appleby (Isle of Man) LLC 33-37 Athol Street Douglas Isle of Man IM1 1LB Mishcon de Reya Summit House 12 Red Lion Square London WC1R 4QD UK Registrar Capita Asset Services The Registry, 34 Beckenham Road Beckenham Kent BR3 4TU Corporate Website www.webisholdingsplc.com Twitter @WebisHoldings Webis Holdings AR2013-proof-7.indd 4 22836.04 25 October 2013 2:24 PM PROOF 7 25/10/2013 14:29:30 Webis Holdings plc Viking House, Nelson Street Douglas, Isle of Man IM1 2AH, British Isles Tel: +44 (0) 1624 698141 Fax: +44 (0) 1624 698134 Email: info@betinternet.com Website: www.webisholdingsplc.com Webis Holdings AR2013-proof-7.indd 1 22836.04 25 October 2013 2:24 PM PROOF 7 25/10/2013 14:29:26
Continue reading text version or see original annual report in PDF format above