Webis Holdings plc
Global Gaming Group
Annual Report and Consolidated Financial Statements for the year ended 31 May 2016
AIM Stock Code: WEB
Webis Holdings plc
Contents
Our Performance
2
3
Group at a Glance
Chairman’s Statement
Our Governance
6
7
9
11
12
The Board of Directors
Directors’ Report
Corporate Governance
Statement of Directors’ Responsibilities
Report of the Remuneration Committee
Our Financials
14
15
16
17
18
19
36
38
Report of the Independent Auditors
Consolidated Statement of Comprehensive Income
Statements of Financial Position
Statements of Changes in Equity
Consolidated Statement of Cash Flows
Notes to the Financial Statements
Notice of Meeting
Company Information
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1
Webis Holdings plc
Group at a Glance
Webis Holdings plc operates two primary segments within its Group structure:
WatchandWager.com Ltd and WatchandWager.com LLC – Advanced Deposit Wagering (“ADW”)
WatchandWager.com LLC - Cal Expo Harness Racetrack
WatchandWager.com Ltd is regulated in the Isle of Man and operates a totalisator wagering hub through its United States Tote
supplier, which enables it to conduct its ADW business by passing wagers directly into global racetrack betting pools in real time.
WatchandWager.com LLC has its operational base in Lexington, Kentucky, with its head office in Larkspur, California, and provides
pari-mutuel, or pool-betting, wagering services through a number of distribution channels to a global client base. The company
holds United States pari-mutuel licences for its ADW business in the US, issued by North Dakota, California, Maryland and
Colorado. The business provides wagering opportunities predominantly on horse and greyhound racing and has contracted with a
significant number of prestigious racetrack partners within the United States, Hong Kong, France, Canada, United Kingdom,
Ireland, and Australia amongst others. It provides wagering facilities to customers through its website, watchandwager.com, as
well as offering a business-to-business wagering product and a telephone call centre.
WatchandWager.com LLC also 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 continues to provide
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 the Isle of Man licensed Group companies
are held in fully protected client accounts within an Isle of Man regulated bank.
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2
Webis Holdings plc
Chairman’s Statement
Introduction
This report is the first trading year that the Group reports
solely on our core USA based business subsidiary of
WatchandWager.com ("WatchandWager"), head-quartered
in the San Francisco Bay area, with an operations hub in
Lexington, Kentucky, and the race track management
business – Cal Expo, based in Sacramento, California. As
shareholders are aware, we closed our sportsbook operation
in March 2015 (see note 7). As a result of this, financial
comparisons in the report are restated and based on
continuing operations only.
Despite an overall loss on the year, I am pleased to report a
further improved trading performance from WatchandWager.
In particular, we saw a significant increase in turnover across
the operation through the year, but most especially in the
second half. This has continued into the new financial year
as reported below. The operation has made good progress
in key areas of the business, namely the Business Trading
arm and our consumer website/mobile product. In addition,
our racetrack at Cal Expo had another solid year, assisting
with many strategic projects during the year and for the
future.
Most importantly, WatchandWager has achieved a size and
credibility within the USA to be a significant player in the
USA horseracing and e-gaming space, which is widely still
considered to be a jurisdiction of opportunity as European
markets consolidate. The company has a solid operational
presence and multiple licences in key States. In addition, its
global reach continues, particularly in key Racing
jurisdictions such as the USA, Hong Kong, France, UK and
Ireland, amongst others.
Year End Results Review
Group turnover for the year ended 31 May 2016 was US$
224.3 million (2015: US$154.4 million) – a growth of over
45% on continuing operations. Gross Profit decreased by
3.3% to US$ 4.1 million (2015: US$4.2 million), reflecting the
cost of remaining competitive. This trend led to a reduction in
overall gross margin to 1.8% (2015: 2.7%).
Operating costs were US$5.04 million: almost identical to
2015 (2015: US$ 5.03 million). There were some cost
savings during the year as we become more established
within the USA. Against that, the scope of business has
grown significantly and the costs savings have levelled
against further investment in new staff, particularly in
Lexington, as well as the costs of meeting global compliance
and regulatory requirements.
(2015:
As a result, our loss from continuing operations was US$1.2
million
re-
loss of US$1.6 million),
organisational costs, impairments and one-off costs. This
provided a basic and diluted loss per share for continuing
operations of 31 cents (2015: loss of 40 cents).
including
gambling legislation. A further amount of US$2.6 million
(2015: US$2.6 million) is held as bonds and deposits with
other regulatory authorities on behalf of players.
WatchandWager
Business to Business (“Business Trading”)
WatchandWager has recently rebranded the BTOB sector of
its operations to Business Trading to more accurately reflect
its operations, namely the provision of pari-mutuel wagering
to high-roller clients, many of whom specialise in algorithmic
or computer assisted trading on a wide range of global
racetracks.
The turnover for the full year was boosted by significant high
volume player activity through its access into the Hong Kong
Jockey Club pools and the French PMU in particular, and
other markets in the USA, Canada, Australia, UK, Ireland
and several others.
It has been very much a game of two halves in this sector.
The first six months of the year reflected a slower than
anticipated turnover and less content availability. Importantly,
the second half showed a marked improvement in turnover
to May 2016, a trend that has continued into the new
financial year. The reason for this is an increase in the
number of active players and further improvements in
content availability.
Against these positive developments, the Business Trading
high volume wagering sector has become increasingly
competitive over the year, with other operators and player
agents providing third-party services, and increased
racetrack fees being charged in return for access to
racetrack wagering and video streaming rights. This has
made the sector become increasingly high volume, but low
margin in nature, as is reflected in the overall decline in the
company’s gross margin.
The division also remains relatively high maintenance as
content providers, in particular, are concerned with high
volume winners impacting their local markets. In order to
grow, and in some instances maintain existing relationships,
we incurred some additional regulatory and legal costs, as
well as increased travel expenses, to service content
providers, clients and conferences in what is primarily a
global relationship business.
Despite this, WatchandWager has now achieved a vital
critical mass and level of expertise to become a significant
player in this market. The Board remains very positive for
further growth in the Business Trading sector in the future,
especially in core reputable horseracing jurisdictions.
Shareholder equity has decreased to US$1.9 million (2015:
US$3.2 million). Total cash stands at US$ 6.4 million (2015:
US$6.1 million), which includes a ring-fenced amount of
US$0.9 million (2015: US$1.4 million) held as protection
against our player liability as required under Isle of Man
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3
Webis Holdings plc
Chairman’s Statement continued
Business to Consumer
www.watchandwager.com/mobile
We have made good progress in this area, although, at
present, only allocating a relatively modest marketing
budget. This resulted in active player numbers peaking at
almost double than the prior year around Triple Crown time
(May to June 2016). Positively, the successful opening of our
Lexington operations hub has assisted growth in this sector.
The recruitment of dedicated marketing, social media and
customer services teams has given this activity momentum.
In addition, we also successfully launched several new and
improved payment processors during the year, something
the team has worked on tirelessly for several years. Most
importantly, these methods, which are both direct card/ACH
deposit, wallet solutions and voucher schemes, are primarily
based in the USA and have assisted successful acceptance
rates and credibility with our clients: something that has been
challenging for all operators in the USA e-gaming space. The
investment in compliance in gaining these contracts will be
important to the company long term.
We have also launched aggressive bonusing and
promotional offers to our clients, utilising SMS, mail and
social media outlets, with a content focus on daily cash back
and bonuses to clients. Whilst always monitoring the impact
this can have on the bottom line, it is clear this more
aggressive strategy has improved player numbers and
reactivation and retention rates.
During the period, we also opened our new telephone Call
Centre in Lexington. Take up has been relatively slow to date
but this gives another outlet for wagering for our customers
at low cost, with operators working on customer service and
social media during downtime.
Cal Expo Racetrack
Cal Expo, our Sacramento based harness racetrack
operation, again performed well in its fourth year of operation
under our control.
In conjunction with our management team at Sacramento,
we have run the operation in a pragmatic but efficient
manner by controlling costs to achieve the best return for all
stakeholders and by keeping a very close control on Health
and Safety issues. In this regard, it is especially pleasing that
there were no significant health and safety issues at the track
during the period. We continue to focus on a policy of less is
more, with a slight reduction in race days, but with a focus on
competitive field sizes and providing a good betting medium
for our clients both on and off track. As operators of the
track, we have also been successful in attracting Business
Trading clients to our pools, which helps liquidity building
and,therefore, confidence in the betting product.
Post Year, Strategy and Regulatory Developments
I am pleased to report a further improved performance into
the new financial year, with good turnover levels and
EBITDA profitability in the first four months.
Our Business Trading sector has continued the positive
momentum generated with good staking levels across our
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core markets in France, U.K., Ireland, USA, and Australia.
This is especially encouraging as HKJC was not racing
during the summer period, but restarted in September thus
helping trading in the last two months. France, in particular,
has also shown significant growth in the last few months.
With regard to the website/mobile product, it is encouraging
that we have continued the momentum since the Triple
Crown in May/June throughout the summer. Our recipe of
focusing on the improved wagering platform plus preferred
USA payment methods, range of content and an enhanced
advantage program, do appear to be working.
On the back of these encouraging signs, we have recently
signed heads of agreement for a significantly upgraded
wagering platform contract with our software suppliers,
i-neda, based in Farnborough, UK. This was after an
exhaustive Request for Proposal program across multiple
suppliers. This is an important project, with a launch date of
1st April 2017, coupled with a supporting marketing spend.
Licenses/Regulation
I am pleased to report that on 17th November 2016 we
successfully renewed our two core USA licenses, namely the
North Dakota Racing Commission multi-jurisdictional license
and California Horse Racing Board license for 2017. The
California license comes with a caveat of two outstanding
items, due to be presented in January 2017, and we are
confident we will be able to comply with these items. We
continue to pursue other licenses on a cost/benefit basis to
the company, in particular in Kentucky and New York, and at
time of writing we expect these license applications to be
held in December 2016, and if approved to be live for 2017
operations.
Our Isle of Man Gambling Supervision Commission license
continues in good status. This license occupies a small
section of our business, but does give us strategic
advantages and opportunities outside the USA.
Cal Expo
Cal Expo resumed racing on 22nd October as planned. Also,
as previously reported, we have renewed our leasehold
contract with the State owned landlord at the track, to show
our commitment to the operation. We launched a specific
horse recruitment process during the summer which has
proven successful, and have a record number of horse
population of over 450 at present. The racetrack has been
instrumental in many of the deals and growth we have seen
in the business. As a result, we are currently examining other
racetrack or race related contracts, to evaluate whether they
have strategic benefits in key US States, most probably
outside California.
4
Webis Holdings plc
Chairman’s Statement continued
USA on-line gaming
Progress has been slow in this area, especially during a
Federal election year, and has largely vindicated the Board’s
decision to monitor it rather than spend significant sums on
lobbying. That said, 2017 will be a fresh year, and we
support any new on-line poker bills in California that provide
a subsidy to active racetracks, such as our operation at Cal
Expo. We also continue to look at new forms of e-gaming
such as Fantasy and Virtual Sports, although mindful of not
impacting daily operations.
Summary Outlook
In summary, despite an overall loss reported on the year, the
Board are very encouraged by the growth in the business,
especially in the second half of the year and the first quarter
of the new financial year. There is clear evidence of
achieving a critical mass in turnover which is vital to achieve
profitability in the market. Equally importantly, the Board
remains confident that the strategies adopted are regulatory
compliant, correctly aligned and focussed to ensure the best
prospects for future growth and a return to profitability.
I would like to thank all of our staff, our customers and our
shareholders for their continued support throughout the year.
Denham Eke
Non-executive Chairman
28 November 2016
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5
Webis Holdings plc
The Board of Directors
Denham Eke, aged 65
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.
Denham Eke was appointed Non-
executive Chairman in April 2003.
Ed Comins, aged 47
Managing Director
Ed Comins has 22 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 online skill
games, where he managed betting
partner relationships with key
sportsbooks.
Ed Comins joined the Board in May
2010.
Nigel Caine, aged 46
Non-executive Director
Nigel Caine is currently the Chief
Financial Officer for Burnbrae Group
Limited. He is a Fellow of the Association
of Chartered Certified Accountants and a
Member of both the Chartered Institute
of Securities and Investments and the
Institute of Chartered Secretaries and
Administrators. He also holds an MBA
from the University of Wales. Nigel
began his career in audit and transaction
services with KPMG and Deloitte. Before
joining Burnbrae Group Limited in 2014,
Nigel was the Chief Financial Officer for
Speymill Deutsche Immobilien Company
Plc.
Nigel Caine joined the Board in June
2015.
Sir James Mellon, aged 87
Non-executive Director
Sir James Mellon is a former diplomat
who began his career with the
Department of Agriculture for Scotland
before moving on to several varied roles
including Head of Trade Relations and
Export Dept (TRED); FCO; UK
Ambassador to Denmark; 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.
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6
Webis Holdings plc
Directors’ Report
The directors present their annual report and the audited
financial statements for the year ended 31 May 2016.
At the year end there were 9 days (2015: 6 days) of purchases
in trade creditors.
Principal activities
The Group operates:
a pari-mutuel service to individual and business
customers; and
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 pari-mutuel
events.
A more detailed review of the business, its results and future
developments is given in the Chairman’s Statement on page
3.
Proposed dividend
The directors do not propose the payment of a dividend (2015:
$Nil).
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.
Directors’ interests
Financial risks
Details relating to financial risk management are shown in
note 21 to the financial statements.
Directors and directors’ interests
The directors who held office during the year and to date were
as follows:
Denham Eke
Non-executive Chairman
Ed Comins
Managing Director
Nigel Caine
Non-executive Director
Sir James Mellon
Non-executive Director
The director retiring by rotation is Denham Eke who, being
eligible, offers himself for re-election.
The directors who held office at the end of the year had the
following interests in the ordinary shares of the Company and
options to purchase such shares arising from incentive
schemes:
Denham Eke
Ed Comins
Nigel Caine
Sir James Mellon
Ordinary shares
Options
Interest
at end of
year
2016
Interest at
start of
year
2015
—
—
—
—
—
—
—
—
Interest
at end of
year
2016
—
14,000,000
—
—
Interest at
start of
year
2015
Denham Eke is Managing Director of Burnbrae Limited which holds 248,204,442 ordinary shares representing 63.10% 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.
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—
—
—
—
7
Webis Holdings plc
Directors’ Report continued
Substantial interests
On 1 August 2016, the following interests in 3% or more of the Company’s ordinary share capital had been reported:
Burnbrae Limited
BBHISL Nominees Ltd
Vidacos Nominees Limited
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
training and career
matters
development of employees, and is opposed to any form of less
favourable treatment afforded on the grounds of disability,
sex, race or religion.
to employment,
relating
Number of
ordinary
shares
%
63.10
248,204,442
7.54
29,651,666
5.08
20,000,000
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
$29,899 during the year (2015: $37,179).
Auditors
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
The Group recognises the importance of ensuring employees
are kept informed of the Group’s performance, activities and
future plans.
Ed Comins
Managing Director
28 November 2016
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8
Webis Holdings plc
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.
2. Directors’ Remuneration
The Report of the Remuneration Committee is set out on
pages 12 and 13 of the report and financial statements.
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 one executive and three non-executive
directors.
The non-executive 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 non-executive
Chairman should they require clarification on any aspect of
the Company’s business.
All directors are able to take independent professional advice
in furtherance of their duties if necessary.
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
then subsequently as
training on appointment and
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 non-executive 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.
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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 3, 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
auditors.
The Board also acknowledges that it has overall responsibility
for reviewing the effectiveness of internal control. It believes
the Group’s operating
that senior management within
businesses should also contribute in a substantial way and
this has been built into the process.
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.
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Webis Holdings plc
Corporate Governance continued
Internal Control continued
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:
o 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.
o 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.
o 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
thorough
reforecast exercise is undertaken following production of
the half-year financial statements.
the year progresses. A
o Cash flow forecasts are regularly prepared to ensure that
the Group has adequate funds and resources for the
foreseeable future.
o Risks are identified and appraised through the annual
process of preparing these budgets.
o Steps have been taken to embed internal control and risk
management into the operations of the business and to
to
deal with areas of
management’s and the Board’s attention. This process is
continuing to increase risk awareness throughout the
Group.
improvement which come
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 auditors, and meets its external auditors at least
once a year. Additional meetings may be requested by the
auditors.
Going Concern
As more fully explained in note 1.1 to the financial statements
on page 20, 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.
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10
Webis Holdings plc
Statement of Directors’ Responsibilities in Respect of the Directors’ Report and the Financial
Statements
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 year.
In preparing these financial statements, the directors are
required to:
o select suitable accounting policies and then apply them
consistently;
o make judgements and estimates that are reasonable and
prudent;
o state whether they have been prepared in accordance with
International Financial Reporting Standards as adopted by
the EU; and
o 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.
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.
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11
Webis Holdings plc
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 Conduct 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:
o Basic annual salary and benefits.
o Eligibility to participate in an annual bonus scheme, when
such scheme operates.
o Share option incentives.
o Contribution to a pension plan.
Aggregate Directors’ Remuneration
The total amounts for directors’ remuneration were as follows:
Emoluments — salaries, bonuses and taxable benefits
— fees
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AIM Stock Code: WEB
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. 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 year.
Service Contracts
The service contract of Ed Comins provided for a notice period
of six months.
2016
US$000
2015
US$000
332
77
409
667
56
723
12
Webis Holdings plc
Report of the Remuneration Committee continued
Directors’ Emoluments
Basic
salary
US$000
Fees
US$000
Bonus
US$000
Termination
payments
US$000
Benefits
US$000
2016
Total
US$000
2015
Total
US$000
307
—
—
—
—
307
—
—
30
24
23
77
—
—
—
—
—
—
—
—
—
—
—
—
25
—
—
—
—
25
332
—
30
24
23
299
368
32
—
24
409
723
Executive
Ed Comins
Garry Knowles
Non-executive
Denham Eke*
Nigel Caine*
Sir James Mellon
Aggregate emoluments
* Paid to Burnbrae Limited.
Details of the options outstanding at 31 May 2016 are as follows:
Name of
director
Ed Comins
2016 Share Option Plan
31 May
2015
Granted /
(lapsed) in
year
31 May
2016 Exercise price
Date
from which
exercisable
Expiry
date
—
—
14,000,000
14,000,000
1p 3 March 2019 3 March 2026
14,000,000
14,000,000
The market price of the shares at 31 May 2016 was 1.80p. The range during the year was 2.50p to 0.45p.
Approval
The report was approved by the Board of directors and signed on behalf of the Board.
Denham Eke
Non-executive Chairman
28 November 2016
www.webisholdingsplc.com
AIM Stock Code: WEB
13
Webis Holdings plc
Report of the Independent Auditors, KPMG Audit LLC, to the members of Webis Holdings plc
We have audited the financial statements of Webis Holdings
plc for the year ended 31 May 2016 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
financial reporting
framework that has been applied in their preparation is
applicable
International Financial Reporting
Standards (IFRSs) as adopted by the European Union.
the related notes. The
law and
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 auditors’ report and for no other
purpose. To the fullest extent permitted by law, we do not
accept or assume responsibility to anyone other than the
Company and the Company’s members, as a body, for our
audit work, for this report, or for the opinions we have formed.
Respective responsibilities of Directors and Auditors
As explained more fully in the Statement of Directors’
Responsibilities 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.
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.
In addition, we read all the financial and non-financial
information in the Directors’ Report to identify material
inconsistencies with the audited financial statements and to
identify any information that is apparently materially incorrect
based on, or materially inconsistent with, the knowledge
acquired by us in the course of performing the audit. If we
become aware of any apparent material misstatements or
inconsistencies we consider the implications for our report.
Opinion on the financial statements
In our opinion, the financial statements:
o give a true and fair view of the state of the Group’s and
Parent Company’s affairs as at 31 May 2016 and of the
Group’s loss for the year then ended;
o have been properly prepared in accordance with IFRSs as
adopted by the European Union; and
o have been properly prepared in accordance with the
provisions of Companies Acts 1931 to 2004.
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:
o 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
o
o certain disclosures of directors’ remuneration specified by
law are not made; or
o 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
29 November 2016
www.webisholdingsplc.com
AIM Stock Code: WEB
14
Webis Holdings plc
Consolidated Statement of Comprehensive Income
For the year ended 31 May 2016
Continuing operations
Turnover
Cost of sales
Betting duty paid
Gross profit
Operating costs
Operating loss
Other losses – net
Re-organisational costs, impairments and one-off costs
Finance income
Finance costs
Finance (costs)/income - net
Loss before income tax
Income tax expense
Loss from continuing operations
Discontinued operations
Loss from discontinued operations
Loss for the year
Other comprehensive income:
Items that may be subsequently reclassified to profit or loss:
Currency translation differences on disposal of foreign subsidiaries
Other comprehensive income for the year
Total comprehensive income for the year
Basic earnings per share for loss attributable to the equity holders of the Company
during the year (cents) – all operations
Diluted earnings per share for loss attributable to the equity holders of the
Company during the year (cents) – all operations
Basic and diluted earnings per share for loss attributable to the equity holders of
the Company during the year (cents) – continuing operations
The notes on pages 19 to 35 form part of these financial statements.
www.webisholdingsplc.com
AIM Stock Code: WEB
Note
2016
US$000
2015
US$000
2
224,313
154,411
(219,826)
(149,978)
(393)
(203)
4,094
4,230
(5,042)
(5,037)
3
4
4
6
7
8
8
8
(948)
(50)
(231)
—
(1)
(1)
(807)
(415)
(346)
5
—
5
(1,230)
(1,563)
—
—
(1,230)
(1,563)
(12)
(432)
(1,242)
(1,995)
—
—
(4)
(4)
(1,242)
(1,999)
(0.32)
(0.51)
(0.31)
(0.51)
(0.31)
(0.40)
15
Webis Holdings plc
Statements of Financial Position
As at 31 May 2016
Non-current assets
Intangible assets
Property, equipment and motor vehicles
Investments
Bonds and deposits
Total non-current assets
Current assets
Bonds and deposits
Trade and other receivables
Cash and cash equivalents
Total current assets
Total assets
Equity
Called up share capital
Share option reserve
Retained losses
Total equity
Current liabilities
Trade and other payables
Total current liabilities
Total liabilities
Total equity and liabilities
Note
31.05.16
Group
US$000
31.05.16
Company
US$000
31.05.15
Group
US$000
31.05.15
Company
US$000
9
10
11
12
12
14
13
16
16
15
113
160
—
105
378
2,499
2,671
6,445
11,615
11,993
6,334
—
(4,402)
1,932
10,061
10,061
10,061
11,993
—
4
3
—
7
—
37
4,974
5,011
5,018
170
118
—
204
492
2,441
2,579
6,103
11,123
11,615
—
11
3
—
14
—
41
2,838
2,879
2,893
6,334
—
6,334
—
6,334
—
(5,352)
(3,160)
(5,119)
982
3,174
1,215
4,036
4,036
4,036
5,018
8,441
8,441
8,441
11,615
1,678
1,678
1,678
2,893
The financial statements were approved by the Board of directors on 28 November 2016
Denham Eke
Ed Comins
Non-executive Chairman
Managing Director
The notes on pages 19 to 35 form part of these financial statements.
www.webisholdingsplc.com
AIM Stock Code: WEB
16
Webis Holdings plc
Statements of Changes in Equity
For the year ended 31 May 2016
Group
Called up
share capital
US$000
Share
premium
US$000
Share option
reserve
US$000
Foreign
currency
translation
reserve
US$000
Retained
earnings
US$000
Total equity
US$000
Balance as at 31 May 2014
6,334
16,978
156
(4)
(18,295)
5,169
Total comprehensive income for the
period:
Loss for the year
Other comprehensive income
Transactions with owners:
Cancellation of share premium account
Share-based payment credit
Balance as at 31 May 2015
Total comprehensive income for the
year:
Loss for the year
Transactions with owners:
Share-based payment credit
Balance as at 31 May 2016
—
—
—
—
6,334
—
—
6,334
—
—
(16,978)
—
—
—
—
—
—
—
—
(156)
—
—
—
—
Company
Called up
share capital
US$000
Share
premium
US$000
Share option
reserve
US$000
—
4
—
—
—
(1,999)
(1,999)
—
16,978
156
4
—
—
(3,160)
3,174
—
(1,242)
(1,242)
—
—
—
—
(4,402)
1,932
Foreign
currency
translation
reserve
US$000
Retained
earnings
US$000
Total equity
US$000
Balance as at 31 May 2014
6,334
16,978
156
—
(19,508)
3,960
Total comprehensive income for the
period:
Loss for the year
Other comprehensive income
Transactions with owners:
Cancellation of share premium account
Share-based payment credit
Balance as at 31 May 2015
Total comprehensive income for the
year:
Loss for the year
Transactions with owners:
Share-based payment credit
Balance as at 31 May 2016
—
—
—
—
6,334
—
—
6,334
—
—
(16,978)
—
—
—
—
—
—
—
—
(156)
—
—
—
—
The notes on pages 19 to 35 form part of these financial statements.
www.webisholdingsplc.com
AIM Stock Code: WEB
—
—
—
—
—
—
—
—
(2,745)
(2,745)
—
16,978
156
—
—
—
(5,119)
1,215
(233)
(233)
—
(5,352)
—
982
17
Webis Holdings plc
Consolidated Statement of Cash Flows
For the year ended 31 May 2016
Cash flows from operating activities
Loss before income tax
Adjustments for:
- Depreciation of property, equipment and motor vehicles
- Amortisation of intangible assets
- Finance costs/(income) - net
- Foreign exchange losses on exchange movements
- Goodwill impaired
Changes in working capital:
- Increase in receivables
- Increase in payables
Cash flows from/(used in) operations
Finance income
Bonds and deposits placed in the course of operations
Net cash generated from/(used in) operating activities
Cash flows from investing activities
Purchase of intangible assets
Purchase of property, equipment and motor vehicles
Disposal of property, equipment and motor vehicles
Cost of closure of discontinued operation
Net cash used in investing activities
Cash flows from financing activities
Interest paid
Loans repaid
Net cash used in financing activities
Net increase/(decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of year
Exchange losses on cash and cash equivalents
Cash and cash equivalents at end of year
The notes on pages 19 to 35 form part of these financial statements.
www.webisholdingsplc.com
AIM Stock Code: WEB
2016
US$000
2015
US$000
(1,242)
(1,995)
74
107
1
143
—
(92)
1,620
611
—
41
652
(51)
(118)
—
(12)
(181)
(1)
—
(1)
470
6,103
(128)
6,445
81
147
(8)
450
177
(254)
479
(923)
10
(643)
(1,556)
(77)
(57)
4
(253)
(383)
(2)
(17)
(19)
(1,958)
8,402
(341)
6,103
18
Webis Holdings plc
Notes to the Financial Statements
For the year ended 31 May 2016
1 Reporting entity (“the company”)
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 year ended 31
May 2016 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
(“IFRS”) and its interpretations as adopted by the European Union.
Standards and interpretations not yet effective
A number of new standards, amendments to standards and interpretations are not yet effective for the year, and have not been
applied in preparing these consolidated financial statements:
New/revised
Reporting Standards (IAS/IFRS)
International Accounting Standards/International Financial
IFRS 14 Regulatory Deferral Accounts
Accounting for Acquisitions of Interests in Joint Operations (Amendments to IFRS 11)
Clarification of Acceptable Methods of Depreciation and Amortisation (Amendments
to IAS 16 and IAS 38)
Equity Method in Separate Financial Statements (Amendments to IAS 27)
Sale or Contribution of Assets between an Investor and its Associate or Joint Venture
(Amendments to IFRS 10 and IAS 28)
Annual Improvements to IFRS 2012 – 2014 Cycle – various standards
Investment Entities: Applying the Consolidation Exception (Amendments to IFRS 10,
IFRS 12 and IAS 28)
Disclosure Initiative (Amendments to IAS 1)
IFRS 9 Financial Instruments
Effective date
(accounting periods
commencing on or after)
1 January 2016
1 January 2016
1 January 2016
1 January 2016
1 January 2016
1 January 2016
1 January 2016
1 January 2016
1 January 2018
The Directors do not expect the adoption of the standards and interpretations to have a material impact on the Group’s financial
statements in the period of initial application.
There has been no material impact on the Group financial statements of new standards/interpretations that have come into effect
during the current reporting period.
Functional and presentational currency
These financial statements are presented in US Dollars which is the Group’s primary functional currency and its presentational
currency. Financial information presented in US Dollars has been rounded to the nearest thousand. All continued operations
of the Group have US Dollars as their functional currency.
(b) Basis of measurement
The Group consolidated financial statements 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
16, are the most appropriate for the Group.
The directors consider the only critical judgement area to be the valuation of share options, as disclosed in note16.
The accounting policies set out below have been applied consistently to all periods presented in these consolidated financial
statements.
19
www.webisholdingsplc.com
AIM Stock Code: WEB
Webis Holdings plc
Notes to the Financial Statements continued
1.1 Basis of preparation continued
Going concern
As noted within the Chairman’s Statement, the Group has experienced a tightening of margins and an increase in costs during
the year, which has resulted in continuing losses being incurred. Achieving economies of scale and controlling costs are key
priorities for the Group in achieving its goal of profitability and maintaining adequate liquidity in order to continue its operations.
The Directors continue to assess all strategic options in this regard, albeit that the ultimate success of strategies adopted is
difficult to predict. Notwithstanding the losses incurred, the directors have prepared projected cash flow information for the next
12 months and believe that the Group has adequate resources to meet its obligations as they fall due. Accordingly, the directors
consider that it is appropriate that the financial statements are prepared on a going concern basis.
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
The consolidated financial statements incorporate the results of Webis Holdings plc and its subsidiaries (“the Group”).
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.
The Group applies the acquisition method to account for business combinations. The consideration transferred for the acquisition
of a subsidiary is the fair values of the assets transferred, the liabilities incurred to the former owners of the acquiree and the
equity interests issued by the Group. The consideration transferred includes the fair value of any asset or liability resulting from a
contingent consideration arrangement. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business
combination are measured initially at their fair values at the acquisition date. Acquisition-related costs are expensed as incurred.
Inter-company transactions, balances and unrealised gains on transactions between the Group companies are eliminated.
Unrealised losses are also eliminated. When necessary amounts reported by subsidiaries have been adjusted to conform with
the Group’s accounting policies.
Foreign currency translation
(a) Functional and presentation currency
Items included in the financial statements of each of the Group’s entities are measured using the currency of the primary economic
environment in which the entity operates (‘the functional currency’). The consolidated financial statements are presented in US
Dollars, which is also the Group’s functional currency.
(b) Transactions and balances
Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the
transactions or valuation where items are remeasured. Foreign exchange gains and losses resulting from the settlement of
such transactions and from the translation at year-end exchange rates of monetary assets and liabilities denominated in foreign
currencies are recognised in the income statement, except when deferred in other comprehensive income as qualifying cash
flow hedges and qualifying net investment hedges. Foreign exchange gains and losses that relate to borrowings and cash and
cash equivalents are presented in the income statement within ‘finance income or costs’. All other foreign exchange gains and
losses are presented in the income statement within ‘Other losses – net’.
(c) Group companies
The results and financial position of all the Group entities (none of which has the currency of a hyper-inflationary economy) that
have a functional currency different from the presentation currency are translated into the presentation currency as follows:
(i) assets and liabilities for each balance sheet presented are translated at the closing rate at the date of that balance sheet;
(ii) income and expenses for each income statement are translated at average exchange rates (unless this average is not a
reasonable approximation of the cumulative effect of the rates prevailing on the transaction dates, in which case income and
expenses are translated at the rate on the dates of the transactions); and
(iii) all resulting exchange differences are recognised in other comprehensive income.
Goodwill and fair value adjustments arising on the acquisition of a foreign entity are treated as assets and liabilities of the foreign
entity and translated at the closing rate. Exchange differences arising are recognised in other comprehensive income.
Revenue recognition and turnover
Turnover represents the amounts staked in respect of bets placed by customers on events which occurred during the year. 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.
20
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AIM Stock Code: WEB
Webis Holdings plc
Notes to the Financial Statements continued
1.2 Summary of significant accounting policies continued
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.
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.
Borrowing costs
Borrowing costs are recognised in profit or loss in the period in which they are incurred.
Current and deferred income tax
The tax expense for the period comprises current and deferred tax. Tax is recognised in the income statement, except to the
extent that it relates to items recognised in other comprehensive income or directly in equity. In this case, the tax is also recognised
in other comprehensive income or directly in equity, respectively.
The current income tax charge is calculated on the basis of the tax laws enacted or substantively enacted at the reporting date in
the countries where the Group operates and generates taxable income. Management periodically evaluates positions taken in
tax returns with respect to situations in which applicable tax regulation is subject to interpretation. It establishes provisions where
appropriate on the basis of amounts expected to be paid to the tax authorities.
Deferred income tax is recognised on temporary differences arising between the tax bases of assets and liabilities and their
carrying amounts in the consolidated financial statements. However, deferred tax liabilities are not recognised if they arise from
the initial recognition of goodwill; deferred tax is not accounted for if it arises from initial recognition of an asset or liability in a
transaction other than a business combination that at the time of the transaction affects neither accounting nor taxable profit or
loss. Deferred tax is determined using tax rates (and laws) that have been enacted or substantively enacted by the reporting date
and are expected to apply when the related deferred income tax asset is realised or the deferred income tax liability is settled.
Deferred income tax assets are recognised only to the extent that it is probable that future taxable profit will be available against
which the temporary differences can be utilised.
Deferred income tax liabilities are provided on taxable temporary differences arising from investments in subsidiaries except for
deferred income tax liability, where the timing of the reversal of the temporary difference is controlled by the Group and it is
probable that the temporary difference will not reverse in the foreseeable future. Only where there is an agreement in place that
gives the Group the ability to control the reversal of the temporary difference is the liability not recognised.
Deferred income tax assets are recognised on deductible temporary differences arising from investments in subsidiaries only to
the extent that it is probable the temporary difference will reverse in the future and there is sufficient taxable profit available against
which the temporary difference can be utilised.
Deferred income tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets against
current tax liabilities and when the deferred income taxes, assets and liabilities relate to income taxes levied by the same taxation
authority on either the same taxable entity or different taxable entities where there is an intention to settle the balances on a net
basis.
Discontinued operation
A discontinued operation is a component of the Group’s business, the operations and cash flows of which can be clearly
distinguished from the rest of the Group and which:
represents a separate major line of business or geographic area of operations; and
is part of a single co-ordinated plan to dispose, or discontinue, a separate major line of business or geographic area of
operations.
Classification as a discontinued operation occurs at the earlier of disposal, permanent cessation of activities or when the operation
meets the criteria to be classified as held-for-sale.
When an operation is classified as a discontinued operation, the comparative statement of profit or loss and OCI is re-presented
as if the operation had been discontinued from the start of the comparative year.
www.webisholdingsplc.com
AIM Stock Code: WEB
21
Webis Holdings plc
Notes to the Financial Statements continued
1.2 Summary of significant accounting policies continued
Intangible assets — goodwill
Goodwill arises on the acquisition of subsidiaries and represents the excess of the consideration transferred over the Group’s
interest in net fair value of the net identifiable assets, liabilities and contingent liabilities of the acquiree and the fair value of the
non-controlling interest in the acquiree.
For the purpose of impairment testing, goodwill acquired in a business combination is allocated to each of the cash-generating
units (“CGUs”), or groups of CGUs, that is expected to benefit from the synergies of the combination. Each unit or group of units
to which the goodwill is allocated represents the lowest level within the entity at which the goodwill is monitored for internal
management purposes. Goodwill is monitored at the operating segment level.
Goodwill impairment reviews are undertaken annually or more frequently if events or changes in circumstances indicate a potential
impairment. The carrying value of goodwill is compared to the recoverable amount, which is the higher of value in use and the
fair value less costs of disposal. Any impairment is recognised immediately as an expense and is not subsequently reversed.
Intangible assets — other
(a) Trademarks and licences
Separately acquired trademarks and licences are shown at historical cost. Trademarks and licences acquired in a business
combination are recognised at fair value at the acquisition date. Trademarks and licences have a finite useful life and are carried
at cost less accumulated amortisation. Amortisation is calculated using the straight-line method to allocate the cost of trademarks
and licences over their estimated useful lives of three years.
Acquired computer software licences are capitalised on the basis of the costs incurred to acquire and bring to use the specific
software. These costs are amortised over their estimated useful lives of three years.
(b) Website design and development costs
Costs associated with maintaining websites are recognised as an expense as incurred. Development costs that are directly
attributable to the design and testing of identifiable and unique websites controlled by the Group are recognised as intangible
assets when the following criteria are met:
it is technically feasible to complete the website so that it will be available for use;
management intends to complete the website and use it;
there is an ability to use the website;
it can be demonstrated how the website will generate probable future economic benefits;
adequate technical, financial and other resources to complete the development and to use the website are available; and
the expenditure attributable to the website during its development can be reliably measured.
Directly attributable costs that are capitalised as part of the website include the website employee costs and an appropriate portion
of relevant overheads.
Other development expenditures that do not meet these criteria are recognised as an expense as incurred. Development costs
previously recognised as an expense are not recognised as an asset in a subsequent period.
Website development costs recognised as assets are amortised over their estimated useful lives, which do not exceed three
years.
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.
Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only when it is
probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured
reliably. The carrying amount of the replaced part is derecognised. All other repairs and maintenance are charged to the income
statement during the financial period in which they are incurred.
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. Depreciation is calculated using the straight-line method to allocate the cost of property, equipment and
motor vehicles over their estimated useful lives of three years.
Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised within
‘Other (losses)/gains – net’ in the income statement.
22
www.webisholdingsplc.com
AIM Stock Code: WEB
Webis Holdings plc
Notes to the Financial Statements continued
1.2 Summary of significant accounting policies 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 payments
The Group operates an equity-settled, share-based compensation plan, under which the entity receives services from employees
as consideration for equity instruments (options) of the Group. The fair value of the employee services received in exchange for
the grant of the options is recognised as an expense. The total amount to be expensed is determined by reference to the fair
value of the options granted:
including any market performance conditions (for example, an entity’s share price); and
excluding the impact of any service and non-market performance vesting conditions (for example, profitability, sales growth
targets and remaining an employee of the entity over a specified time period).
Non-market performance and service conditions are included in assumptions about the number of options that are expected to
vest. The total expense is recognised over the vesting period, which is the period over which all of the specified vesting conditions
are to be satisfied.
At the end of each reporting period, the Group revises its estimates of the number of options that are expected to vest based on
the non-market vesting conditions. It recognises the impact of the revision to original estimates, if any, in the income statement,
with a corresponding adjustment to equity.
When the options are exercised, the Company issues new shares. The proceeds received net of any directly attributable
transaction costs are credited to share capital (nominal value) and share premium.
Leases
Leases in which a significant portion of the risks and rewards of ownership are retained by the lessor are classified as operating
leases. Payments made under operating leases (net of any incentives received from the lessor) are charged to the income
statement on a straight-line basis over the period of the lease. The Group is not party to any leases that are classified as finance
leases.
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. The carrying value of all financial instruments is deemed to equate to their fair value.
www.webisholdingsplc.com
AIM Stock Code: WEB
23
Webis Holdings plc
Notes to the Financial Statements continued
1.2 Summary of significant accounting policies continued
Trade and other receivables
Trade and other receivables are recognised initially at fair value and subsequently measured at amortised cost using the effective
interest method, less provision for impairment.
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 payables are recognised initially at fair value and subsequently measured at amortised cost using the effective interest
method.
Open sports bets
The Group may have at any point in time, an exposure on open 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.
Employee benefits
(a) Pension obligations
The Group does not operate any post-employment schemes, including both defined benefit and defined contribution pension
plans.
(b) Short-term employee benefits
Short-term employee benefits, such as salaries, paid absences, and other benefits, are accounted for on an accruals basis over
the period in which employees have provided services in the year. All expenses related to employee benefits are recognised in
the Statement of Comprehensive Income in operating costs.
(c) Profit sharing and bonus plans
The Group recognises a liability and an expense for bonuses and profit sharing, based on a formula that takes into consideration
the profit attributable to the Company’s shareholders after certain adjustments. The Group recognises a provision where
contractually obliged or where there is a past practice that has created a constructive obligation.
2 Segmental analysis
Turnover
Pari-mutuel and Racetrack Operations
Total comprehensive income – continuing operations
Pari-mutuel and Racetrack Operations
Group
www.webisholdingsplc.com
AIM Stock Code: WEB
2016
US$000
2015
US$000
Asia Pacific
130,777
17,128
United States
81,273
124,312
Europe
British Isles
7,353
4,910
1,962
11,009
224,313
154,411
(1,071)
(1,065)
(159)
(498)
(1,230)
(1,563)
24
Webis Holdings plc
Notes to the Financial Statements continued
2 Segmental analysis continued
Net assets
Pari-mutuel and Racetrack Operations
Group
3 Operating loss
Operating loss is stated after charging:
Auditors’ remuneration — audit
Depreciation of property, equipment and motor vehicles
Amortisation of intangible assets
Exchange losses
Operating lease rentals — other than plant, equipment and Harness Racetrack
Operating lease rentals — Harness Racetrack
Directors’ fees
4 Finance (costs)/income - net
Bank interest receivable
Finance income
Bank interest payable
Loan interest payable
Finance costs
Finance (costs)/income - net
5 Staff numbers and cost
Average number of employees – Pari-mutuel and Racetrack Operations
The aggregate payroll costs of these persons were as follows:
Pari-mutuel and Racetrack Operations
Wages and salaries
Social security costs
www.webisholdingsplc.com
AIM Stock Code: WEB
2016
US$000
2015
US$000
843
1,089
1,932
1,915
1,259
3,174
2016
US$000
2015
US$000
80
74
107
50
16
94
77
102
37
93
416
70
110
56
2016
US$000
2015
US$000
–
–
–
(1)
(1)
(1)
5
5
–
–
–
5
2016
58
2015
63
2016
US$000
2015
US$000
1,871
135
2,006
1,832
152
1,984
25
Webis Holdings plc
Notes to the Financial Statements continued
6
Income tax expense
Loss 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
2016
US$000
2015
US$000
(1,242)
(1,995)
–
–
(161)
161
–
(164)
164
–
The maximum deferred tax asset that could be recognised at year end is US$485,000 (2015: US$324,000). The Group has not
recognised any asset.
7 Discontinued operations
In March 2015, the Group ceased its Sportsbook and Casino operations due to regulatory changes in its primary geographical
market that would have affected its ability to remain competitive and profitable.
The comparative Consolidated Statement of Comprehensive Income shows the discontinued operation separately from
continuing operations.
(a) Results of discontinued operations
Turnover
Expenses
Results from operating activities
Fixed assets written off
Other comprehensive income:
Currency translation differences on closure of foreign subsidiaries
Loss for the year
2016
US$000
2015
US$000
–
(12)
(12)
–
–
(12)
121,577
(121,923)
(346)
(86)
(4)
(436)
The loss from the discontinued operations of US$12,000 (2015: loss of US$436,000) is attributable entirely to the owners of the
Company. The loss from continuing operations of US$1,230,000 (2015: loss of US$1,407,000) is also attributable entirely to
the owners of the Company.
(b) Cash flows (used in)/from discontinued operations
Net cash used in operating activities
Net cash used in investing activities
Net cash flow for the year
www.webisholdingsplc.com
AIM Stock Code: WEB
2016
US$000
2015
US$000
(12)
–
(12)
(336)
(2)
(338)
26
Webis Holdings plc
Notes to the Financial Statements continued
7 Discontinued operations continued
(c) Effect of discontinued operations on the financial position of the Group
Closure costs paid from Group funds
Net liabilities
Cash and cash equivalents disposed of
Net cash outflow
2016
US$000
2015
US$000
(12)
(12)
–
(12)
(253)
(253)
–
(253)
The above represents costs met by Group in relation to the administration costs of the discontinued operations at the year end.
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 year.
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.
Loss for the year – all operations
Loss for the year – continuing operations
Loss for the year – discontinued operations
Weighted average number of ordinary shares in issue
Diluted number of ordinary shares
Basic earnings per share – all operations
Diluted earnings per share – all operations
Basic and diluted earnings per share – continuing operations
Basic earnings per share – discontinued operations
2016
US$000
(1,242)
(1,230)
2015
US$000
(1,995)
(1,563)
(12)
(432)
No.
No.
393,338,310
393,338,310
397,874,810
393,338,310
(0.32)
(0.31)
(0.31)
(0.01)
(0.51)
(0.51)
(0.40)
(0.11)
www.webisholdingsplc.com
AIM Stock Code: WEB
27
Webis Holdings plc
Notes to the Financial Statements continued
9
Intangible assets
Goodwill
Group
US$000
Software & development
costs
Total
Group
US$000
Company
US$000
Group
US$000
Company
US$000
Cost
Balance at 31 May 2015
Additions during the year
Currency translation differences
177
1,246
–
–
51
(1)
Balance at 31 May 2016
177
1,296
Amortisation and Impairment
At 31 May 2015
Amortisation for the year
Impairment of goodwill
At 31 May 2016
Net book value
At 31 May 2016
At 31 May 2015
177
1,076
–
–
107
–
177
1,183
–
–
113
170
50
–
–
50
50
–
–
50
–
–
1,423
51
(1)
1,473
1,253
107
–
1,360
113
170
50
–
–
50
50
–
–
50
–
–
The goodwill balance brought forward relates to the historical acquisition of subsidiary businesses. The goodwill balances were
fully impaired during the year ended 31 May 2015. The Group tests intangible assets annually for impairment or more frequently
if there are indications that the intangible assets may be impaired (see note 1).
10 Property, equipment and motor vehicles
Group
Cost
At 31 May 2015
Additions during the year
Currency translation differences
At 31 May 2016
Depreciation
At 31 May 2015
Charge for the year
At 31 May 2016
Net book value
At 31 May 2016
At 31 May 2015
www.webisholdingsplc.com
AIM Stock Code: WEB
Computer
Equipment
US$000
Fixtures,
Fittings &
Track
Equipment
US$000
Motor
Vehicles
US$000
Total
US$000
573
11
(2)
582
522
13
535
47
51
454
107
–
561
423
51
474
87
31
47
–
–
47
11
10
21
26
36
1,074
118
(2)
1,190
956
74
1,030
160
118
28
Webis Holdings plc
Notes to the Financial Statements continued
10 Property, equipment and motor vehicles continued
Company
Cost
At 31 May 2015
Additions
Disposals
At 31 May 2016
Depreciation
At 31 May 2015
Charge for the year
At 31 May 2016
Net book value
At 31 May 2016
At 31 May 2015
11 Investments
Computer
Equipment
US$000
Fixtures &
Fittings
US$000
Total
US$000
401
141
–
–
–
–
401
141
401
–
401
–
–
130
7
137
4
11
542
–
–
542
531
7
538
4
11
Investments in subsidiaries are held at cost. Details of investments at 31 May 2016 are as follows:
Subsidiaries
Country of
incorporation
Activity
Holding (%)
WatchandWager.com Limited
Isle of Man
Operation of interactive wagering
totaliser hub
WatchandWager.com LLC
United States of
America
Operation of interactive wagering
totaliser hub and harness racetrack
Technical Facilities & Services Limited
Isle of Man
betinternet.com (IOM) Limited
Isle of Man
Dormant
Dormant
betinternet.com NV
Netherlands Antilles
Dormant
B.E. Global Services Limited
Isle of Man
Dormant
www.webisholdingsplc.com
AIM Stock Code: WEB
100
100
100
100
100
100
29
Webis Holdings plc
Notes to the Financial Statements continued
12 Bonds and deposits
Group
Company
2016
US$000
2015
US$000
2016
US$000
2015
US$000
Bonds and deposits which expire within one year
2,499
2,441
Bonds and deposits which expire within one to two years
Bonds and deposits which expire within two to five years
–
105
–
204
2,604
2,645
–
–
–
–
–
–
–
–
A rent deposit of US$200,000 was paid to California Exposition & State Fair in 2012. This was reduced to US$100,000 in the
current year and is for a term of 5 years (2015: US$200,000). US$500,000 has been paid as a bond in relation to
WatchandWager’s Californian ADW licence (2015: US$500,000). Rent and security deposits of US$69,462 have been paid in
relation to security deposits (2015: US$7,685). An annually renewable insurance bond of US$2,000 is also in place.
Under the terms of the licencing agreement with the Hong Kong Jockey Club the Company is required to hold a retention amount
of US$1,932,019 / HK$15,000,000 (2015: US$1,935,685 / HK$15,000,000).
13 Cash and cash equivalents
Cash and cash equivalents – company and other funds
Cash and cash equivalents – protected player funds
Total cash and cash equivalents
Group
Company
2016
US$000
2015
US$000
2016
US$000
2015
US$000
5,538
907
6,445
4,691
1,412
6,103
4,067
907
4,974
1,426
1,412
2,838
The Group holds funds for operational requirements and for its non-Isle of Man customers, shown as ‘company and other 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.
14 Trade and other receivables
Trade receivables
Other receivables and prepayments
Group
Company
2016
US$000
2015
US$000
2016
US$000
2015
US$000
1,546
1,125
2,671
1,111
1,468
2,579
–
37
37
–
41
41
www.webisholdingsplc.com
AIM Stock Code: WEB
30
Webis Holdings plc
Notes to the Financial Statements continued
15 Trade and other payables
Trade payables
Amounts due to Group undertakings
Open sports bets
Taxes and national insurance
Accruals and other payables
Group
Company
2016
US$000
2015
US$000
2016
US$000
2015
US$000
9,724
7,678
–
–
52
285
–
1
72
690
15
3,994
–
2
25
10,061
8,441
4,036
21
1,509
–
–
148
1,678
Amounts due to Group undertakings are unsecured, interest free and repayable on demand. Included within trade payables are
amounts due to customers of US$9,656,431 (2015: US$7,591,139).
16 Share capital
Allotted, issued and fully paid
No.
2016
US$000
2015
US$000
At beginning and close of year: ordinary shares of 1p each
At 31 May: ordinary shares of 1p each
393,338,310
393,338,310
6,334
6,334
6,334
6,334
The authorised share capital of the Company is US$9,619,000 divided into 600,000,000 ordinary shares of £0.01 each.
Options
Movements in share options during the year ended 31 May 2016 were as follows:
At 31 May 2015 – 1p ordinary shares
Options granted
Options lapsed
Options exercised
At 31 May 2016 – 1p ordinary shares
No.
–
14,000,000
–
–
14,000,000
During the year the Group established an equity-settled share based option program. The fair value of options granted is
recognised as an expense, with a corresponding increase in equity. The fair value is measured at grant date using a Black -
Scholes model and is spread over the vesting period. The amount recognised in equity is adjusted to reflect the actual number
of share options which are expected to vest.
The options were issued on 3 March 2016 to Ed Comins, Managing Director of the Group. The fair value of each option on the
grant date was estimated as being £0.0022. The options are able to be exercised from 3 March 2019 and expire on 2 March
2026. The weighted average exercise price of all options is £0.01.
The charge for share options recorded in profit and loss for the year was US$457 (2015: credit of US$156,000).
www.webisholdingsplc.com
AIM Stock Code: WEB
31
Webis Holdings plc
Notes to the Financial Statements continued
17 Open sports bets liabilities
Due to the closure of the sportsbook operations in 2015, the Group is no longer exposed to open sports bets liabilities. This
related to stakes that could be received from a customer in respect of some event happening in the future, and hence the level of
any actual liability to the Group could not be assessed until after that event had occurred, although the maximum potential liability
could be determined. Therefore, as at the financial position date, there were US$Nil (2015: US$1,157) of such stakes that had
been received where the event to which they related was after the financial position date. Accordingly, such amounts had been
reflected as open sports bets in the Statements of Financial Position (see note 15).
The maximum possible liability on open sports bets was US$Nil (2015: US$0.007m).
18 Capital commitments
As at 31 May 2016, the Group had no capital commitments (2015: US$Nil).
19 Operating lease commitments
At 31 May 2016, the Group was committed to future minimum lease payments of:
Payments due within one year
Payments due between one to five years
Payments due beyond five years
2016
US$000
2015
US$000
86
345
86
119
102
–
20 Related party transactions
Identity of related parties
The Group has a related party relationship with its subsidiaries (see note 11), and with its directors and executive officers and
with Burnbrae Ltd (significant 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 US$60,038 (2015: US$56,293) and directors’ fees of US$54,002 (2015: US$31,890) were charged
in the year by Burnbrae Limited, of which Denham Eke and Nigel Caine are common directors.
Transactions with key management personnel
The total amounts for directors’ remuneration were as follows:
Emoluments — salaries, bonuses and taxable benefits
— fees
2016
US$000
2015
US$000
332
77
409
667
56
723
Directors’ fees of US$54,002 were paid to Burnbrae Ltd (2015: US$31,890). Details of share options issued in the year can be
seen in note 16.
www.webisholdingsplc.com
AIM Stock Code: WEB
32
Webis Holdings plc
Notes to the Financial Statements continued
21 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
2016
US$000
2015
US$000
6,445
6,103
–
–
6,445
6,103
(1,932)
(3,174)
4,513
2,929
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 and foreign exchange risks.
Liquidity risk
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 where applicable to ensure that Isle of Man Gambling Supervision Commission player protection
principles are met. The directors anticipate that the business will continue to generate sufficient cash flow in the forthcoming
period to meet its financial obligations.
The following are the contractual maturities of financial liabilities:
2016
Financial liabilities
Carrying
amount
US$000
Contractual
cash flow
US$000
6 months
or less
US$000
Up to
1 year
US$000
1–5
years
US$000
Trade creditors
9,724
(9,724)
(9,724)
52
35
(52)
(35)
(52)
(35)
9,811
(9,811)
(9,811)
–
–
–
–
–
–
–
–
Income tax and national insurance
Other creditors
2015
Financial liabilities
Trade creditors
Income tax and national insurance
Other creditors
www.webisholdingsplc.com
AIM Stock Code: WEB
Carrying
amount
US$000
Contractual
cash flow
US$000
6 months
or less
US$000
Up to
1 year
US$000
1–5
years
US$000
7,678
(7,678)
(7,678)
72
295
(72)
(295)
(72)
(295)
8,045
(8,045)
(8,045)
–
–
–
–
–
–
–
–
33
Notes to the Financial Statements continued
Webis Holdings plc
21 Financial risk management continued
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
Bonds and deposits
Trade and other receivables
2016
US$000
2015
US$000
6,445
2,604
2,551
6,103
2,645
2,443
11,600
11,191
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 receivables in any business segment:
Pari-mutuel
2016
US$000
2015
US$000
2,549
2,549
2,304
2,304
Of the above receivables, US$1,546,000 (2015: US$1,111,000) relates to amounts owed from racing tracks. These receivables
are actively monitored to avoid significant concentration of credit risk and the directors consider there to be no significant
concentration of credit risk.
The directors consider that all the above financial assets that are not impaired for each of the reporting dates under review are of
good credit quality. No amounts were considered past due at the year end (2015: US$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.
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 interbank 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 Pound
Sterling, Swedish Krona, Hong Kong 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.
www.webisholdingsplc.com
AIM Stock Code: WEB
34
Webis Holdings plc
Notes to the Financial Statements continued
21 Financial risk management continued
Foreign currency risks continued
At the reporting date the Group had the following exposure:
Short-term exposure
(426)
75
282
1,728
2016
Current assets
Current liabilities
2015
Current assets
Current liabilities
HKD
US$
000
GBP
US$
000
EUR
US$
000
USD
US$
000
SGD
US$
000
SEK
US$
000
Total
US$
000
4,673
464
2,106
4,477
(5,099)
(389)
(1,824)
(2,749)
–
–
–
–
–
–
11,720
(10,061)
1,659
HKD
US$
000
GBP
US$
000
EUR
US$
000
USD
US$
000
SGD
US$
000
SEK
US$
000
Total
US$
000
3,080
1,149
255
6,315
(5,320)
(584)
(56)
(2,482)
1
–
1
524
11,324
–
(8,442)
524
2,882
Short-term exposure
(2,240)
565
199
3,833
The following table illustrates the sensitivity of the net result for the year and equity in regards to the Group’s financial assets and
financial liabilities and the US Dollar–Sterling exchange rate, US Dollar–Euro exchange rate and US Dollar–Hong Kong Dollar
exchange rate.
A 5% weakening of the US Dollar against the following currencies at 31 May 2016 would have increased/(decreased) equity and
profit and loss by the amounts shown below:
2016
Current assets
Current liabilities
Net assets
2015
Current assets
Current liabilities
Net assets
GBP
US$000
EUR
US$000
HKD
US$000
Total
US$000
23
(20)
3
105
(91)
14
234
(255)
(21)
362
(366)
(4)
GBP
US$000
EUR
US$000
HKD
US$000
Total
US$000
57
(29)
28
13
(3)
10
154
(266)
(112)
224
(298)
(74)
A 5% strengthening of the US Dollar 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.
22 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 63.10%.
23 Subsequent events
To the knowledge of the directors, there have been no material events since the end of the reporting period that require disclosure
in the accounts
35
www.webisholdingsplc.com
AIM Stock Code: WEB
Webis Holdings plc
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 29 December 2016 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 year ended 31 May 2016.
2 To re-elect as a director Denham 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 auditors 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
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.
the exercise of
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
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
respect of overseas shareholders,
problems
fractional entitlements or otherwise howsoever);
laws of any
territory or
the
in
www.webisholdingsplc.com
AIM Stock Code: WEB
(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 39,333,831;
(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
(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
Nigel Caine
Secretary
28 November 2016
Registered Office: Viking House
Nelson Street, Douglas
Isle of Man, IM1 2AH
36
Webis Holdings plc
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.
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 his or her 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
close of business on 27 December 2016 shall be entitled
to attend and vote at the meeting. Changes to the register
after close of business on 27 December 2016 shall be
disregarded in determining the rights of any person to
attend and vote at the meeting.
www.webisholdingsplc.com
AIM Stock Code: WEB
37
Webis Holdings plc
Nominated Adviser and Broker
Beaumont Cornish Limited
2nd Floor, Bowman House
29 Wilson Street
London
EC2M 2SJ
Legal Advisors
Long & Humphrey
The Old Courthouse
Athol Street
Douglas
Isle of Man
IM1 1LD
UK Registrar
Capita Asset Services
The Registry, 34 Beckenham Road
Beckenham
Kent
BR3 4TU
Corporate Website
www.webisholdingsplc.com
Twitter
@WebisHoldings
Company Information
Directors
Denham Eke
Non-Executive Chairman
Ed Comins
Managing Director
Nigel Caine
Non-Executive Director
Sir James Mellon
Non-Executive Director
Secretary
Nigel Caine
Registered Office
Viking House
Nelson Street
Douglas, Isle of Man
IM1 2AH
Bankers
NedBank Private Wealth Ltd
St Mary’s Court
20 Hill Street
Douglas
Isle of Man
IM1 1EU
Auditors
KPMG Audit LLC
Chartered Accountants
Heritage Court
41 Athol Street
Douglas, Isle of Man
IM99 1HN
www.webisholdingsplc.com
AIM Stock Code: WEB
38
Webis Holdings plc
Webis Holdings plc
Viking House, Nelson Street
Douglas, Isle of Man
IM1 2AH, British Isles
Email: ir@webisholdingsplc.com
Website: www.webisholdingsplc.com
www.webisholdingsplc.com
AIM Stock Code: WEB
39