Webis Holdings plc
Global Gaming Group
Annual Report and Consolidated Financial Statements for the year ended 31 May 2020
AIM Stock Code: WEB
Webis Holdings plc
Contents
Our Performance
2
3
Group at a Glance
Chairman’s Statement
Our Governance
6
7
9
13
14
15
The Board of Directors
Directors’ Report
Corporate Governance Statement
Audit, Risk and Compliance Committee Report
Statement of Directors’ Responsibilities
Report of the Remuneration Committee
Our Financials
17
21
22
23
24
25
Independent Auditor’s Report
Consolidated Statement of Comprehensive Income
Statements of Financial Position
Statements of Changes in Equity
Consolidated Statement of Cash Flows
Notes to the Financial Statements
Shareholder Information
Notice of Meeting
Company Information
50
52
1
Webis Holdings plc
Group at a Glance
Webis Holdings plc (the “Company”) and its subsidiary
companies (together the “Group”) operates two primary
segments as described below: -
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.
its operational base
in
WatchandWager.com LLC has
Lexington, Kentucky, with its head office in Larkspur,
California, and provides pari-mutuel wagering, or pool-betting,
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 USA, including a multi-
jurisdictional licence issued by the States of North Dakota, and
individual licences for the States of California, Maryland,
Colorado, Minnesota, New York, Washington and
Kentucky. 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
interactive 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 USA continues
to provide leverage for our related global pari-mutuel
operations.
As part of the requirements for the Isle of Man licence, client
funds for the Isle of Man licensed companies are held in fully
protected segregated client accounts within an Isle of Man
regulated bank.
2
Webis Holdings plc
Chairman’s Statement
Introduction
I am very pleased to report that it has been a much improved
from our core USA based business,
performance
WatchandWager.com LLC (“WatchandWager”) over
the
financial year, with a significant improvement in trading
especially in the second half. In addition, I can confirm that
this performance has continued into the new financial year.
Indeed, we fully expect a return to profitability for the Group
for the 2020/21 financial year.
In addition, your Board believes that our standing as a credible
proven licensed operator across the USA continues to place
us in a unique position. The USA is clearly the land of
opportunity in relation to licensed forms of gaming, and
increasingly the major operators in our sector are looking to
the USA for increased revenue streams. This can only
enhance our position for the benefit of shareholders.
With that said, and clearly in these extraordinary times, this
positive report comes with a caveat that any external factors,
such as Covid-19 affecting our clients ability to wager on our
core content, or other external factors outside our control, may
have an unforeseen impact. These factors are analyzed in this
report.
Year End Results Review
The Group amounts wagered for the year ended 31 May 2020
were US$ 105.3 million (2019: US$ 136.3 million). Gross Profit
reported was up at US$ 4.53 million (2019: US$ 4.48 million).
Operating costs were US$ 4.9 million: down 7% on 2019
(2019 US$ 5.3 million), as we continue to manage costs over
the entire operation. As a result, our loss from operations was
US$ 284,000, again, a significant improvement from last year,
and continues our projected curve to return to bottom line
profit.
Shareholder equity stands at US$ 0.9 million (2019: US$ 1.2
million). Total cash stands at US$ 4.0 million (2019: US$ 2.6
million), which includes ring-fenced funds held as protection
against our player liability as required under USA and Isle of
Man gambling legislation. An amount of US$ 0.88 million was
held during the year as bonds and deposits with regulatory
authorities.
Approach to Risk and Corporate Governance
As part of the adoption of the Quoted Companies Alliance
Corporate Governance code in 2018, the Board completed an
assessment of the risks inherent in the business and defined
and adopted a statement of risk appetite, being the amount
and type of risk, it is prepared to seek, accept or tolerate in
pursuit of value. This being: -
“The Group’s general risk appetite is a moderate, balanced
one that allows it to maintain appropriate growth, profitability
and scalability, whilst ensuring full regulatory compliance.”
The Group’s primary risk drivers include: -
Strategic
Reputational
Credit
Operational
Market
Liquidity, Capital and Funding
Regulatory and Compliance
Conduct
Our risk appetite is classified under an “impact” matrix defined
as Zero, Low, Medium and High. Appropriate steps are
implemented to ensure the prudential control monitoring of
risks to the Group and the Audit, Risk and Compliance
Committee oversees this essential requirement. Further
details of the Corporate Governance Statement will be found
on pages 9 to 12 of this report.
The Board refined
incorporates the risk and compliance framework.
the Group’s business plan which
Performance by Sector
WatchandWager
Business-to-Consumer
www.watchandwager.com/mobile
I can report a significant improvement in performance, both
during the period reported and in the future outlook. During
the period, we saw a 16% increase in handle versus the same
period last year. This despite much of our core content being
postponed in the early stages of Covid-19 in March, April and
May. In addition, we thoroughly reviewed the operation with a
view to improving our performance. This review is carried out
regularly and ensures that we achieve optimum cost control to
maximize our margin. This excellent performance has
continued into the new financial year.
This improvement continued in the second half of the year,
enhanced by our content continuing to operate, despite the
impact of global Covid-19 lockdowns, from March onwards.
Lack of attendance on racetracks and some other sports being
unable to operate has helped our online operations. The
Board wishes to thank our global content partners for
continuing operations during these extremely difficult times
Business-to-Business
This sector covers the provision of pari-mutuel (pool) wagering
to high-roller clients, many of whom specialise in algorithmic
or computer assisted trading on a wide range of global
racetracks.
This sector has performed satisfactorily but is somewhat
complex to manage. We are finding that the area is becoming
increasingly competitive, as content holders manage their
rates and control their channel of distribution. In addition, as
stated before, this sector is a relationship business, where
person-to-person interaction with content holders, suppliers,
and customers is an important factor for success. This has of
course been difficult to achieve during the Covid-19 pandemic
due to travel restrictions.
3
Webis Holdings plc
Chairman’s Statement continued
Cal Expo
Our racetrack operation at Cal Expo, Sacramento performed
well during the period with a good horse population, steady
handle and, importantly, zero horse fatalities at the racetrack
itself. However, we were impacted by the California wildfires
in and around the State, and that remains a concern, mainly
due to air quality. We were fortunate in that our meeting
ceased on 31 March before the major impact of Covid-19.
Health and safety has been our principle focus and will always
continue to be so, especially as a live sporting event. We
thank all our staff and all our participants at Cal Expo for their
diligence and excellent record in this regard during difficult
times to operate a retail operation.
Covid-19 and other risk factors
This has been an unprecedented period to report upon and I
feel it is important to update shareholders on the position of
the Company in relation to Covid-19 and other factors out of
our control. In relation to Covid-19, we believe that the
Company will be largely unaffected by the impact of the
pandemic, with our principal revenues being mainly on-line
business. However, there is always a caveat insofar as we are
reliant on racing continuing throughout any lockdown of
sports. We are a content company and without content that
would be a risk to the Company, as with many other
operations. Wildfires in California also remain a risk to our
retail operations at Cal Expo.
Licenses, Regulatory and Compliance
The management team have once again been busy renewing
our key strategic licenses during the period and subsequently.
I am pleased to confirm at the time of writing that all our core
licenses have either been renewed or in the process of being
renewed for the calendar year of 2021 and in some cases,
even further.
As announced on to the market on 20 November, we were
approved by the California Horseracing Board to continue our
advanced deposit wagering operations for a further two years.
California being a strategically key State for our operations.
The Board considers these licenses and future applications,
alongside our physical presence at Cal Expo, to be the
principal assets of the Group, and this is commented more in
subsequent events below.
In addition, I can report that the Group did not have any
regulatory breaches or complaints from our valued content
providers during the period, and indeed to date, as we hold
compliance and social responsibility to be high priority across
the Group.
Subsequent Events (post period reported)
Trading
As mentioned above, I can report a significant upturn in
business performance in our new financial year. This has
principally been from increased business on our BtoC
operation with increases in player numbers and handle
generated. Handle has increased by 67% at time of writing
across the same period last year.
Our retail facility at Cal Expo has also benefited from wagers
placed from locations inside California, which we are entitled
to a share of as a licensed operator in the State.
Notwithstanding external factors, the Board is confident this
positive trend will continue to the year end. A further update
will be provided at our half year results (due to be announced
February 2021).
Cal Expo License Renewal
As reported to shareholders on 19 December 2019, we have
renewed our license with our Cal Expo State landlord until
2025, with an option to renew until 2030. We believe this is
extremely important to secure our asset in the fifth largest
economy in the world. We can also report that our landlord
has received funding from the State due to lost income as a
result of the pandemic lockdowns.
We will commence live Racing on 21 November and race until
mid-April 2021, with 44 race days arranged. At present, we
plan to race without crowds but at all times will be guided by
the Sacramento County Health Authorities. It should be noted
that 97% of our revenues at the facility are generated off the
track, and this figure is expected to increase, so the impact of
a lack of attendance will be negligible, although of course we
would want to welcome spectators back as guided.
USA/California regulated sports betting
Shareholders may have noted the developments in relation to
California legalized sports betting in the summer of this year.
We were disappointed that the Dodd/Gray AB10 Bill did not
get approved, but we are optimistic for the future. We believe
that post the USA Election and in early 2021, this matter will
progress. The State has a significant budget deficit, and it will
only be a matter of time before legalized sports betting will be
embraced, and WatchandWager will be very well positioned
to take advantage of this.
We will be increasing our lobbying and activity in the State
Capitol post the election. We do not favour the Native
American proposal which does not permit on-line wagering.
As we have seen across the world, and in indeed in several
market leaders such as New Jersey and Pennsylvania, on-line
wagering will create for much higher levels of duties, jobs and
revenues back into the State. We plan to lobby more
aggressively in this matter in 2021 and will keep shareholders
up to date as to progress
4
Webis Holdings plc
Chairman’s Statement continued
USA/California regulated sports betting continued
At time of writing we expect sports betting to be legalized for
those with a physical presence in the State by 2022, with a
go-live date in 2023.
The Executive continue to look at other opportunities to
diversify our product offering in other States and will keep
shareholders informed.
Summary and Outlook
Overall, the Board is pleased with the business performance
both during the period and looking forward. Our cash position
is much improved, and we expect trading to continue to be
solid, notwithstanding external factors beyond our control
We also need to look to the future, and we are very aware that
USA regulated gaming is seen as a very relevant subject at
present in global gaming space. The likely acquisition of
William Hill by a US based corporation is clear evidence of
that, and we expect this trend to continue. In relation to that
we have hired a leading gaming consultant to look at merger
and acquisition opportunities with a natural fit to our business,
most likely in the USA. We will keep shareholders informed of
any significant developments.
It is also important to re-confirm the support of our principal
shareholder for our USA operations, strategy, and expansion
plans. As a Board, we also believe we have the ability to raise
further capital to support our operations both short term and
indeed for future funding of our USA strategy.
Finally, I would like to thank all our shareholders, customers
for their continued loyalty, and our staff for their continued
hard work during these very difficult times.
Denham Eke
Non-executive Chairman
6 January 2021
5
Webis Holdings plc
The Board of Directors
Denham Eke, aged 69
Non-executive Chairman
career
Denham Eke began his
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
mining, leisure, manufacturing and financial
services sectors.
Denham Eke was appointed Non-executive
Chairman in April 2003.
Ed Comins, aged 51
Managing Director
the
Tote
Ed Comins has 30 years’ experience in the
betting and gaming industry with Coral,
and
Ladbroke Casinos,
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 50
Non-executive Director
Investments and
Nigel Caine is a Fellow of the Association of
Chartered Certified Accountants and a
Member of both the Chartered Institute of
the
Securities and
Chartered Governance Institute. He also
holds an MBA from the University of Wales.
Nigel began his career
in audit and
transaction services with KPMG and Deloitte
and has since served as the Chief Financial
Officer for a number of companies.
Nigel Caine joined the Board in June 2015
and resigned on 17 November 2020.
Sir James Mellon, aged 91
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.
6
Webis Holdings plc
Directors’ Report
The Directors present their annual report and the audited
consolidated financial statements for the year ended 31 May
2020.
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 in the Chairman’s Statement on pages 3 to
5.
Proposed dividend
The Directors do not propose the payment of a dividend
(2019: US$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
Denham Eke 1
Ed Comins
Nigel Caine
Sir James Mellon
At the year-end there were 26 days (2019: 19 days) of
purchases in trade creditors.
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
Sir James Mellon
Non-executive Director
Nigel Caine
Non-executive Director
The Director retiring by rotation is Ed Comins who, being
eligible, offers himself for re-election.
Nigel Caine resigned on 17 November 2020.
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:
Ordinary shares
Options
Interest
at end of
year
2020
Interest at
start of
year
2019
Interest
at end of
year
2020
Interest at
start of
year
2019
—
—
—
—
—
—
—
—
—
—
14,000,000
14,000,000
—
—
—
—
1 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 15 and 16.
7
Webis Holdings plc
Directors’ Report continued
Substantial interests
On 2 October 2020, the following interests in 3% or more of the Company’s ordinary share capital had been reported:
Burnbrae 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
matters
training and career
development of employees, and is opposed to any form of less
favourable treatment afforded on the grounds of disability,
sex, race or religion.
to employment,
relating
Number of
ordinary
shares
%
63.10
248,204,442
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
US$34,195 during the year (2019: US$39,807).
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.
Denham Eke
Non-executive Chairman
6 January 2021
8
Webis Holdings plc
Corporate Governance Statement
Corporate Governance Report
The Webis Holdings Board (the “Board”) is committed to best
practice in corporate governance throughout Webis Holdings
plc and all subsidiary companies (together the “Group”). The
Directors have agreed to comply with the provisions of the
Quoted Companies Alliance (“QCA”) Corporate Governance
Code for Small and Mid-Size Quoted Companies (2018) to the
extent which is appropriate to its nature and scale of
operations. This report illustrates how the Group complies with
those principles.
QCA Principle 1: Establish a strategy and business model
which promotes long-term value for shareholders
The strategy and business operations of the Group are set out
in the Chairman’s Statement on pages 3 to 5.
The Group’s strategy and business model and amendments
thereto, are developed by the Managing Director and his
senior management team and approved by the Board. The
management
is
responsible for implementing the strategy and managing the
business at an operational level.
the Managing Director,
led by
team,
The Group’s overall strategic objective is to develop a
profitable, sustainable advance deposit wagering (“ADW”)
platform that benefits from a wide and diverse client base,
both business and retail. The Group operates through two
principal operating subsidiaries: WatchandWager.com Ltd
and WatchandWager.com LLC.
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.
its operational base
WatchandWager.com LLC has
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
website,
watchandwager.com, as well as offering a business-to-
business wagering product.
customers
through
its
to
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.
The Group also plans to develop an attractive US-based
sportsbook offering following the recent Supreme Court ruling
which paves the way to legalizing wagering on sports in the
United States, subject to individual State legislation. Whilst the
ruling will not have an immediate impact on revenue levels
until individual State legislation is in place, the Group
considers this market to be a significant growth area for our
US operations. Significantly, California’s draft Sports Betting
Bill specifies that only land-based racetracks and casinos will
be eligible for license applications. In the United States,
WatchandWager.com LLC holds ADW licenses not only for
California, but also for North Dakota (providing regulated
access to a total of 26 states), together with individual State
licenses for New York, Kentucky, Colorado, Minnesota and
Washington.
The Group operates in an inherently high risk and heavily
regulated sector and this is reflected in the principal risks and
uncertainties.
In executing the Group’s strategy and operational plans,
management will typically confront a range of day-to-day
challenges associated with these key risks and uncertainties
and will seek to deploy the identified mitigation steps to
manage these risks as they manifest themselves.
QCA Principle 2: Seek
shareholder needs and expectations
to understand and meet
The Group via the Managing Director seeks to maintain a
regular dialogue with both existing and potential new
shareholders in order to communicate the Group’s strategy
and progress and to understand the needs and expectations
of shareholders.
Beyond the Annual General Meeting, the Managing Director
and, where appropriate, other members of the senior
management team or Board will meet with investors and
analysts to provide them with updates on the Group’s
business and to obtain feedback regarding the market’s
expectations of the Group.
The Group’s investor relations activities encompass dialogue
with both institutional and private investors. From time to time,
the Company attends private investor events, providing an
opportunity for those investors to meet with representatives
from the Group in a more informal setting.
QCA Principle 3: Take into account wider stakeholder and
social responsibilities and their implications for long-
term success
The Group is aware of its corporate social responsibilities and
the need to maintain effective working relationships across a
range of stakeholder groups. These include the Group’s
employees, clients, partners, suppliers, regulatory authorities
and horseracing colleagues involved in the Group’s track
facility at Cal Expo. The Group’s operations and working
methodologies take account of the need to balance the needs
of all of these stakeholder groups while maintaining focus on
the Board’s primary responsibility to promote the success of
the Group for the benefit of its members as a whole. The
Group endeavours to take account of feedback received from
stakeholders, making amendments to working arrangements
and operational plans where appropriate and where such
amendments are consistent with the Group’s longer-term
strategy.
The Group takes due account of any impact that its activities
may have on the environment and seeks to minimise this
impact wherever possible. Through the various procedures
and systems, it operates, the Group ensures full compliance
with health and safety and environmental legislation relevant
to its activities.
9
Webis Holdings plc
Corporate Governance Statement continued
QCA Principle 4: Embed effective risk management,
considering both opportunities and threats, throughout
the organisation
The Board is responsible for the systems of risk management
and internal control and for reviewing their effectiveness. The
internal controls are designed to manage rather than eliminate
risk and provide reasonable but not absolute assurance
against material misstatement or loss. Through the activities
of the Group Audit, Risk and Compliance Committee, the
effectiveness of these internal controls is reviewed annually.
A comprehensive budgeting process is completed once a year
and is reviewed and approved by the Board. The Group’s
results, compared with the budget, are reported to the Board
on a monthly basis.
The Group maintains appropriate insurance cover in respect
of actions taken against the Directors because of their roles,
as well as against material loss or claims against the Group.
The insured values and type of cover are comprehensively
reviewed on a periodic basis.
The senior management team meets at least monthly to
consider new risks and opportunities presented to the Group,
making recommendations to the Board and/or Group Audit,
Risk and Compliance Committee as appropriate.
QCA Principle 5: Maintain the board as a well-
functioning, balanced team led by the chair
The Group’s Board currently comprises three Non-executive
Directors and one Executive Director.
All of the Directors are subject to election by shareholders at
the first Annual General Meeting after their appointment to the
Board and will continue to seek re-election at least once every
three years.
The Board is responsible to the shareholders for the proper
management of the Group and meets at least four times a
year to set the overall direction and strategy of the Group, to
review operational and financial performance and to advise on
management appointments. All key operational decisions are
subject to Board approval.
Sir James Mellon, one of the Non-executive Directors is
considered to be independent, although the Board intends to
appoint at least one further independent Director at an
appropriate time. The other two Non-executive Directors are
not considered independent given their connection to the
Company’s controlling shareholder. The QCA Code suggests
that a board should have at least two independent Non-
executive Directors. The Board considers that the current
composition and structure of the Board of Directors have been
appropriate to maintain effective oversight of the Group’s
activities to date. However, the Board is aware that further
oversight through independent Non-executive Directors could
be beneficial to the governance environment. This process is
under review and is pending the further development of the
sportsbook opportunity in the US in order to be able to
determine the exact need and requirements.
Non-executive Directors receive their fees in the form of a
basic cash emolument. The Executive Director receives a
basic cash salary and also holds options over the Group’s
shares. The number and terms are set out on page 16.
The option grant concerned is not deemed to be significant for
the individual Executive Director. The current remuneration
structure for the Board’s Executive and Non-executive
Directors is deemed to be proportionate.
QCA Principle 6: Ensure that between them the Directors
have the necessary up-to-date experience, skills and
capabilities
The Board considers that all of the Executive and Non-
executive Directors are of sufficient competence and calibre
to add strength and objectivity to its activities and bring
considerable experience in the operational and financial
development of gambling and horseracing companies.
The Directors’ biographies are set out on page 6.
The Board regularly reviews the composition of the Board to
ensure that it has the necessary breadth and depth of skills to
support the ongoing development of the Group. Whilst there
is no Finance Director on the Board, the overview of the
finance function was the responsibility of Nigel Caine, aided
by a non-Board Financial Controller.
The Chairman, in conjunction with the Company Secretary,
ensures that the Directors’ knowledge is kept up to date on
key issues and developments pertaining to the Group, its
operational environment and to the Directors’ responsibilities
as members of the Board. During the course of the year,
Directors received updates from the Company Secretary and
various external advisers on a number of corporate
governance matters.
Directors’ service contracts or appointment letters make
provision for a Director to seek personal advice in furtherance
of his or her duties and responsibilities, normally via the
Company Secretary.
QCA Principle 7: Evaluate board performance based on
clear and relevant objectives, seeking continuous
improvement
Internal evaluation of the Board, the Committees and
individual Directors is undertaken on an annual basis in the
form of peer appraisal and discussions to determine their
effectiveness and performance as well as the Directors'
continued independence.
The results and recommendations that come out of the
appraisals for the directors shall identify the key corporate and
financial targets that are relevant to each Director and their
personal targets in terms of career development and training.
Progress against previous targets is also assessed where
relevant.
The Board may utilise the results of the evaluation process
when considering the adequacy of the composition of the
Board and for succession planning.
10
Webis Holdings plc
Corporate Governance Statement continued
QCA Principle 8: Promote a corporate culture that is
based on ethical values and behaviours
The Board seeks to maintain the highest standards of integrity
and probity in the conduct of the Group’s operations. These
values are enshrined in the written policies and working
practices adopted by all employees in the Group. An open
the Group, with regular
culture
communications
to staff regarding progress and staff
feedback regularly sought. The Executive Management
regularly monitors the Group’s cultural environment and seeks
to address any concerns that may arise, escalating these to
Board level as necessary.
is encouraged within
The Group is committed to providing a safe environment for
its staff and all other parties for which the Group has a legal
or moral responsibility in this area. The Group’s health and
safety policies and procedures are enshrined in the Group’s
documented quality systems, which encompass all aspects of
the Group’s day-to-day operations.
QCA Principle 9: Maintain governance structures and
processes that are fit for purpose and support good
decision- making by the board
The Role of the Board
The Board is collectively responsible for the long-term
success of the organisation. Its principal function is to
determine the strategy and policies of the Group within an
effective control framework which enables risk to be assessed
and managed.
The Board ensures that the necessary financial and human
resources are in place for the Group to meet its objectives and
that business and management performances are reviewed.
Furthermore, the Board ensures that the Group operates
within its constitution, relevant legislation and regulation and
that proper accounting records and effective systems of
business control are established, maintained, documented
and audited.
There are at least four formal Board meetings each year. All
Board members have the benefit, at the Group’s expense, of
liability insurance in respect of their responsibilities as
Directors and have access to independent legal or other
professional advice if required. The Board has a formal
schedule of matters which are reserved for its consideration
and it has established three committees to consider specific
issues in greater detail, being the Group Audit, Risk and
Compliance, Remuneration and Nomination Committees. The
Terms of Reference for each of these Committees are
published on the Group’s website.
The Chairman
The Chairman is responsible for leading the Board, ensuring
its effectiveness in all aspects of its role, promoting a culture
of openness of debate and communicating with the Group’s
members on behalf of the Board. The Chairman sets the
direction of the Board and promotes a culture of openness and
debate by facilitating the effective contribution of Non-
executive Directors and ensuring constructive relations
between Executive and Non-executive Directors. The
Chairman also ensures that Directors receive accurate, timely
and clear information. In doing so, this fosters a positive
corporate governance culture throughout the Group.
The Managing Director
The Managing Director is responsible for managing the
Group’s business and operations within the parameters set by
the Board.
Non-executive Directors
The Non-executive Directors are responsible for bringing
independent judgement to the discussions held by the Board,
using their breadth of experience and understanding of the
business. Their key responsibilities are to constructively
challenge and contribute to strategic proposals, and to monitor
resources, and standards of conduct,
performance,
compliance and control, whilst providing support to executive
management in developing the Group.
The Board has established a Group Audit, Risk and
a Remuneration
Compliance Committee
Committee and a Nominations Committee with formally
delegated duties and responsibilities. Sir James Mellon chairs
both the ARCC and the Remuneration Committee.
(“ARCC”),
Group Audit, Risk and Compliance Committee
The Group Audit, Risk and Compliance Committee (the
“ARCC”) meets at least two times each year and comprises
two Non-executive Directors, currently Sir James Mellon
(Chairman) and Denham Eke. The external auditors attend by
invitation. Its role is to be responsible for reviewing the
integrity of the financial statements and the balance of
information disclosed in the accompanying Directors’ Report,
to review the effectiveness of internal controls and risk
management systems and recommend to the Board (for
approval by the members) the appointment or re-appointment
of the external auditor. The ARCC reviews and monitors the
external auditor’s objectivity, competence, effectiveness and
independence, ensuring that if it or its associates are invited
to undertake non-audit work it will not compromise auditor
objectivity and independence.
Further information can be found within the Group Audit, Risk
and Compliance Report contained within this Annual Report.
Remuneration Committee
The Remuneration Committee meets at least twice a year and
comprises of two Non-executive Directors. It is chaired by Sir
the
James Mellon and
is responsible
remuneration of
the Company
Secretary and other members of the management. Committee
members do not take part in discussions concerning their own
remuneration.
the Executive Director,
for determining
Further information can be found within the Remuneration
Report contained within this Annual Report.
Nomination Committee
The Nomination Committee is comprised of the whole Board.
It is chaired by the Chairman of the Board and is responsible
for making recommendations to the Board on matters relating
to the composition of the Board, including Executive and Non-
executive Director succession planning, the appointment of
new Directors and the election and re-election of Directors.
The Nomination Committee only meets as matters arise.
11
Webis Holdings plc
QCA Principle 10: Communicate how the company is
governed and is performing by maintaining a dialogue
with shareholders and other relevant stakeholders
The Group places a high priority on regular communications
with its various stakeholder groups and aims to ensure that all
communications concerning the Group’s activities are clear,
fair and accurate. The Group’s website is regularly updated,
and users can register to be alerted when announcements or
details of presentations and events are posted onto the
website.
Notices of General Meetings of the Company can be found
here: http://www.webisholdingsplc.com/latest-news/.
The results of voting on all resolutions in general meetings are
posted to the Group’s website, including any actions to be
taken as a result of resolutions for which votes against have
been received from at least 20 per cent of independent
shareholders.
Approval
This report was approved by the Board of Directors on 6
January 2021 and signed on its behalf by:
Denham Eke
Non-executive Chairman
6 January 2021
Corporate Governance Statement continued
Appointments to the Board
The principal purpose of the Nomination Committee is to
undertake the assessment of the balance of skills, experience,
independence and knowledge on the Board against the
requirements of the business, with a view to determining
whether any shortages exist. Having completed
the
assessment, the Committee makes recommendations to the
Board accordingly. Appointments to the Board are made on
merit, with due regard to the benefits of diversity. Within this
context, the paramount objective is the selection of the best
candidate, irrespective of background, and it is the view of the
Board that establishing quotas or targets for the diversity of
the Board is not appropriate.
All Director appointments must be approved by
the
Company’s Nominated Adviser, as required under the AIM
Rules, before they are appointed to the Board.
Prior to appointment, Non-executive Directors are required to
demonstrate that they are able to allocate sufficient time to
undertake their duties.
Re-election
The Group’s Rules require that all Directors are submitted for
election at the AGM following their first appointment to the
Board. Thereafter all directors will submit themselves for re-
election at least once every three years, irrespective of
performance.
Board and committee attendance
The number of formal scheduled Board and committee
meetings held and attended by Directors during the year was
as follows: -
Board Audit Remuneration Nomination
Denham
Eke
Sir
James
Mellon
Ed
Comins
Nigel
Caine
5/6
2/2
2/2
6/6
2/2
2/2
6/6
5/6
-
-
-
-
-
-
-
-
12
Webis Holdings plc
Audit, Risk and Compliance Committee Report
The Directors have agreed to comply with the provisions of
(“QCA”) Corporate
the Quoted Companies Alliance
Governance Code for Small and Mid-Size Quoted Companies
(2018) to the extent which is appropriate to its nature and
scale of operations.
This report illustrates how the Group complies with those
principles in relation to its Group Audit, Risk and Compliance
Committee (the “Committee”).
Membership
The Committee comprises of two Non-executive Directors and
the members are Sir James Mellon (Chairman) and Denham
Eke. The composition of the Committee has been reviewed
during the year and the Board is satisfied that the Committee
members have recent relevant financial experience and the
expertise to resource and fulfil its responsibilities effectively,
including those relating to risk and controls.
Meetings
The Committee meets two times a year, including the review
of the interim and full year results. Other Directors and
representatives from the external auditors attend by invitation.
Duties
The Committee carries out the duties below for the Company
and the Group as a whole, as appropriate:
▪ Monitors the integrity of the financial statements of the
Company, including annual and half-yearly reports,
interim management statements, and any other formal
financial performance,
announcement
to
issues and
reviewing significant
judgements which they contain.
financial reporting
relating
▪ Reviews and challenges the consistency the information
presented within the financial statements, compliance
legal requirements,
with stock exchange or other
accounting policies and the methods used to account for
significant or unusual transactions.
▪ Keeps under review the effectiveness of the Group’s
internal controls and risk management systems.
▪ Reviews the Group’s arrangements for its employees to
raise, in confidence, possible wrongdoing in financial
reporting or other matters, the procedures for detecting
fraud, prevention of bribery and adequacy and
effectiveness of the Group’s anti-money laundering
systems and control.
▪ KPMG Audit LLC was appointed as auditor in 2002 and
the Committee oversees the relationship with them
including regular meetings to discuss their remit and
review the findings and any issues with the annual audit.
It also reviews their terms of appointment, meets them
once a year independent of management and considers
and makes recommendations to the Board, to be put to
the Company for approval at the Annual General Meeting,
in relation to the appointment, re-appointment and
removal of the Company’s external auditor. There are no
contractual restrictions in place in respect of the auditor
choice.
The Committee is governed by a Terms of Reference and
a copy of this is available on www.webisholdingsplc.com
- the Company’s website.
▪
2020 Annual Report
During the year the Committee held two meetings and can
confirm that it has received sufficient, reliable and timely
information from management and the external auditors to
enable it to fulfil its responsibilities.
The Committee has satisfied
itself that there are no
relationships between the auditor and the Group which could
adversely affect the auditor’s independence and objectivity
and regular meetings have been held with them at both the
planning stage prior to the audit and after the audit at the
reporting stage.
All internal control and risk issues that have been brought to
the attention of the Committee by the external auditors have
been considered and the committee confirms that it is satisfied
that management has addressed the issues or has plans to
do so.
The Group has a number of policies and procedures in place
as part of its internal controls and these are subject to
continuous review and as a minimum are reviewed by the
Committee on an annual basis.
The Committee has reviewed and discussed together with
management and the external auditor the Company’s financial
statements for the year ended 31 May 2020 and reports from
the external auditor on the planning for and outcome of their
reviews and audit. The key accounting issues and judgements
considered relating to the Group’s financial statements and
disclosures were as follows:
▪ Revenue recognition – the Committee considered the
conditions of revenue recognition, including that of being
recognised on an accrual basis. The Committee agreed
that the current method of revenue recognition is
appropriate for the market that the Group operates within
and that revenue satisfied the necessary criteria to be
recognised. Disclosures are included in note 1;
▪ Going concern – the Committee reviewed the going
concern position of the Group, taking into account the 12-
month cash flow forecasts and the continued support of
the principal shareholder. The Committee is satisfied that
preparing the financial statements on a going concern
basis is appropriate. Disclosures are included in note 1;
▪ Cash balances – the Committee reviewed the cash
position to ensure that it is able to meet its ongoing
requirements and also has sufficient cash reserves to
cover the relevant player liabilities. The Committee is
satisfied that there are sufficient cash balances to meet
its ongoing expenses and cover the player balances in full
if required. Disclosures are included in note 12;
the Committee reviewed
▪ Government grant –
the
Government loan received during the financial year to
ensure
terms provided reasonable
assurance it could be classed as a government grant; and
▪ Reviewed changes to treatment of leases due to adoption
forgiveness
the
of IFRS 16 effective 1 June 2019.
Denham Eke
Non-executive Chairman
6 January 2021
13
Webis Holdings plc
Statement of Directors’ Responsibilities in Respect of the Annual Report and the Financial
Statements
The Directors are responsible for preparing the Annual Report
and the Group and Parent Company 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.
Under the AIM Rules of the London Stock Exchange they are
required to prepare the Group financial statements in
accordance with International Financial Reporting Standards
as adopted by the European Union (IFRSs as adopted by the
EU) and applicable law and they have elected to prepare the
Parent Company financial statements on the same basis.
Under company law the Directors must not approve the
financial statements unless they are satisfied that they give a
true and fair view of the state of affairs of the Group and Parent
Company and of their profit or loss for that period. In preparing
each of the Group and Parent Company financial statements,
the Directors are required to:
•
select suitable accounting policies and then apply them
consistently;
Parent Company’s transactions and disclose with reasonable
accuracy at any time the financial position of the Parent
Company and enable them to ensure that its financial
statements comply with the Companies Acts 1931-2004.
They are responsible for such internal control as they
determine is necessary to enable the preparation of financial
statements that are free from material misstatement, whether
due to fraud or error, and 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.
Under applicable law and regulations, the Directors are also
responsible for preparing a Directors’ Report that complies
with that law and those regulations.
The Directors are responsible for the maintenance and
integrity of the corporate and financial information included on
the company’s website. Legislation in the Isle of Man
governing the preparation and dissemination of financial
statements may differ from legislation in other jurisdictions.
• make judgements and estimates that are reasonable,
relevant and reliable;
Signed on behalf of the Board.
•
•
•
state whether they have been prepared in accordance
with IFRSs as adopted by the EU;
assess the Group and Parent Company’s ability to
continue as a going concern, disclosing, as applicable,
matters related to going concern; and
use the going concern basis of accounting unless they
either intend to liquidate the Group or the Parent
Company or to cease operations or have no realistic
alternative but to do so.
for keeping adequate
The Directors are
accounting records that are sufficient to show and explain the
responsible
Denham Eke
Non-executive Chairman
6 January 2021
14
Webis Holdings plc
Report of the Remuneration Committee
Directors’ Remuneration Report
As an Isle of Man registered company there is no requirement
to produce a Directors’ Remuneration Report. However, the
Board follows best practice and therefore has prepared such
a report.
The Directors have agreed to comply with the provisions of
(“QCA”) Corporate
the Quoted Companies Alliance
Governance Code for Small and Mid-Size Quoted Companies
(2018) to the extent which is appropriate to its nature and
scale of operations.
This report illustrates how the Group complies with those
principles in relation to Directors’ remuneration.
The Level and Components of Executive Director
Remuneration
The Group’s Remuneration Policy reflects the Group’s
business strategy and objectives as well as sustained and
long-term value creation for shareholders. In addition, the
policy aims to be fair and provide equality of opportunity,
ensuring that: -
▪
▪
▪
▪
the Group is able to attract, develop and retain high-
performing and motivated employees in the competitive
local and wider US markets;
employees are offered a competitive remuneration
package to encourage enhanced performance and are,
in a fair and responsible manner, rewarded for their
individual contribution to the success of the Group;
it reflects our culture and values; and
there is full transparency of the Group’s Remuneration
Policy.
In line with the Board’s approach, which reflects that adopted
the Group’s
within other comparable organisations,
Remuneration Policy provides for the reward of the Executive
Director through salary and other benefits.
Executive Director’s Emoluments
The remuneration for the Executive Director reflects their
responsibilities.
to
participate in an annual bonus scheme when this is
considered appropriate, private healthcare and share option
incentives.
It comprises basic salary, eligibility
Annual bonus scheme payments are not pensionable and are
not contracted.
As with staff generally, whose salaries are subject to annual
reviews, the basic salary payable to the Executive Director is
reviewed each year with reference to jobs carrying similar
responsibilities in comparable e-gaming organisations, market
Emoluments — salaries, bonuses and taxable benefits
— fees
conditions generally and local employment competition in
view of the Group’s geographical position.
It is anticipated that an annual bonus scheme will operate
when Group profitability and cash flow allow. Bonuses for the
executive director 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.
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.
The Group does not intend to contribute to the personal
pension plans of Directors in the forthcoming year.
Executive Directors’ Contractual Terms
The service contract of the Executive Director provides for a
notice period of six months.
Non-executive Directors’ Remuneration
Non-executive Directors do not receive any benefits other
than their fees and travelling expenses for which they are
reimbursed. The level of fees payable to Non-executive
Directors is assessed using benchmarks from a group of
comparable e-gaming organisations.
The Procedure for Determining Remuneration
The Remuneration Committee, comprising two Non-executive
Directors, is responsible for setting the remuneration of the
Executive Director and is chaired by Sir James Mellon.
in discussions
Committee members do not
concerning their own remuneration. The basic Non-executive
Director fee is set by the Group Chairman. The Chairman of
the Committee reports at the Board meeting following a
Committee meeting.
take part
It is the view of the Committee that Directors’ remuneration
awarded across the Group for the year has been in
accordance with the Group’s stated Remuneration Policy and,
on behalf of the Committee I recommend that you endorse this
Group report. An analysis of Directors’ emoluments is as
follows:
2020
US$000
2019
US$000
368
64
432
348
67
415
15
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
2020
Total
US$000
2019
Total
US$000
310
—
—
—
310
—
25
20
19
64
30
—
—
—
30
—
—
—
—
—
28
—
—
—
28
368
348
25
20
19
26
21
20
432
415
Executive
Ed Comins
Non-executive
Denham Eke*
Nigel Caine*
Sir James Mellon
Aggregate emoluments
* Paid to Burnbrae Limited.
Details of the options outstanding at 31 May 2020 are as follows:
Name of
director
Ed Comins
2016 Share Option Plan
31 May
2019
Granted /
(lapsed) in
year
31 May
2020 Exercise price
Date
from which
exercisable
Expiry
date
14,000,000
14,000,000
—
—
14,000,000
14,000,000
1p 3 March 2019 3 March 2026
The market price of the shares at 31 May 2020 was 1.55p. The range during the year was 2.70p to 0.85p.
Approval
The report was approved by the Board of Directors and signed on behalf of the Board.
Denham Eke
Non-executive Chairman
6 January 2021
16
Webis Holdings plc
Independent Auditor’s Report, to the members of Webis Holdings plc
1 Our opinion is unmodified
We have audited the financial statements of Webis Holdings PLC (“the Company” or (“the Group”) for the year ended 31 May 2020
which comprise the Consolidated Statement of Comprehensive Income, Consolidated and Parent Company Statements of Financial
Position, Consolidated and Parent Company Statements of Changes in Equity, Consolidated Statement of Cash Flows and the
related notes, including the accounting policies in note 1.
In our opinion:
•
the financial statements give a true and fair view of the state of the Group’s and of the Parent Company’s affairs as at 31 May
2020 and of the Group’s loss for the year then ended;
the Group financial statements have been properly prepared in accordance with International Financial Reporting Standards as
adopted by the European Union (IFRSs as adopted by the EU);
the Parent Company financial statements have been properly prepared in accordance with IFRSs as adopted by the EU and as
applied in accordance with the provisions of the Companies Acts 1931 to 2004; and
the financial statements have been prepared in accordance with the requirements of the Companies Acts 1931-2004.
•
•
•
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (“ISAs (UK)”) and applicable law. Our
responsibilities are described below. We have fulfilled our ethical responsibilities under, and are independent of the Group in
accordance with, UK ethical requirements including the FRC Ethical Standard as applied to listed entities. We believe that the audit
evidence we have obtained is a sufficient and appropriate basis for our opinion.
2 Material uncertainty related to going concern
We draw attention to note 1.1 to the financial statements which indicates that the Group incurred a net loss of US$284,000 for the
year (2019: loss of US$930,000) and has had a decrease in its net assets from US$1,152,000 to US$868,000. As indicated in note
1.1, in view of the history of recent losses and uncertainties in achieving projected cashflow, the Group’s and Parent Company’s
ability to continue as a going concern is dependent on Galloway Limited, a related party, providing additional financial support if
required. As further indicated in that note, there is no certainty that such support will continue.
These events and conditions, along with the other matters explained in note 1.1, constitute a material uncertainty that may cast
significant doubt on the Group and the Parent Company’s ability to continue as a going concern.
Our opinion is not modified in respect of this matter.
3 Other key audit matters: our assessment of risks of material misstatement
Key audit matters are those matters that, in our professional judgment, were of most significance in the audit of the financial
statements and include the most significant assessed risks of material misstatement (whether or not due to fraud) identified by us,
including those which had the greatest effect on: the overall audit strategy; the allocation of resources in the audit; and directing the
efforts of the engagement team. These matters were addressed in the context of our audit of the financial statements as a whole,
and in forming our opinion thereon, we do not provide a separate opinion on these matters. Going concern is a significant key audit
matter and is described in section 2 of our report. In arriving at our audit opinion above, the other key audit matters, in decreasing
order of audit significance, were as follows:
17
Webis Holdings plc
Independent Auditor’s Report, to the members of Webis Holdings plc continued
3 Other key audit matters: our assessment of risks of material misstatement continued
The risk
Revenue
occurrence
Our response
recognition-
Our procedures included:
Key audit matter
Revenue recognition
Consolidated
Comprehensive
US$43,436,000 (2019: US$47,259,000)
of
Revenue
Statement
Income:
Refer to note 1.2 (Accounting Policy for
Revenue) and note 2 (Segmental analysis)
The Group enters into high
volumes of revenue-generating
transactions each day which
are processed on Complex IT
systems. There is a risk that a
system may not be configured
correctly from the outset such
that winning and losing bets or
commissions are calculated
incorrectly, that the systems do
not interface correctly from the
systems
facing
customer
through
financial
the
information systems and that
unauthorised changes may be
made to any of these systems,
which may
the
in
misstatement of revenue.
result
to
There is also the risk that
revenue is materially misstated
in order to boost the parent
company’s earnings position
future outlook may be
and
induced by a number of factors.
This may include the client’s
AIM listed status – hence an
effort to maintain a high share
price and the need to meet both
internal goals and external
market expectations.
Considering the factors above
we identified the occurrence of
revenue as a significant risk.
Outsourcing controls:
- We evaluated the control environment
of the service organisation by obtaining
the latest System and Organisation
Controls (SOC) reports upon whose
system infrastructure and applications
are relied on by the Group, and in
assessing the design.
- We tested the operating effectiveness of
controls by using SOC reports obtained
from the service organisation.
- We
the
assessed
objectivity,
competence and the nature of work
performed by the Independent Service
Auditor who provides the SOC reports.
Tests of detail:
- We agreed total revenues and payouts
recorded by the Group to the reports
extracted from the third-party service
organisation’s system, which we
obtained independently from third party
service organisations system.
- We tested a sample of the other directly
related expenses by tracing amounts
recorded to supplier invoices.
- We recalculated net gaming revenue
subtracting total payouts and other
directly
from
revenue.
expenses
related
- We have performed a cut-off test to
ensure that revenue occurred during the
year and that revenue earned in P1
2021 hasn't been recorded incorrectly in
the year under audit.
- Reviewed post year end journals for
reversals in revenue.
- Compared FX rates used in translating
revenue to market rates.
18
Webis Holdings plc
Independent Auditor’s Report, to the members of Webis Holdings plc continued
4 Our application of materiality and an overview of the scope of our audit
Materiality for the Group financial statements as a whole was set at US$41,000 (2019: US$40,000), of which it represents 0.9%
(2019: 0.9%). We consider net gaming revenue (Gross profit) to be the most appropriate benchmark as it provides a more stable
measure year on year than Group profit before tax.
Materiality for the Parent Company financial statements as a whole was set at US$12,000 (2019: US$18,000), Determined as an
allocation of group materiality as above, of which it represented 30% (2019: 45%).
We agreed to report to the Audit Committee any corrected or uncorrected identified misstatements exceeding US$2,000 (2019:
US$2,000) for the Group financial statements and US$600 (2019: US$900) for the Parent Company financial statements, in addition
to other identified misstatements that warranted reporting on qualitative grounds.
All of the Group’s subsidiaries were subjected to full scope audit by the Group audit team and in accordance with the Group’s
materiality, or a lower level of materiality based on their individual financial statements.
5 We have nothing to report on the other information in the Annual Report
The Directors are responsible for the other information presented in the Annual Report together with the financial statements. Our
opinion on the financial statements does not cover the other information and, accordingly, we do not express an audit opinion or,
except as explicitly stated below, any form of assurance conclusion thereon.
Our responsibility is to read the other information and, in doing so, consider whether, based on our financial statements audit work,
the information therein is materially misstated or inconsistent with the financial statements or our audit knowledge
Based solely on our work on the other information:
• we have not identified material misstatements in the directors’ report;
•
•
in our opinion the information given in those reports for the financial year is consistent with the financial statements; and
in our opinion those reports have been prepared in accordance with the Companies Act 1931-2004
6 We have nothing to report on the other matters on which we are required to report by exception
Under the Companies Act 1931-2004, we are required to report to you if, in our opinion:
•
adequate accounting records have not been kept by the parent Company, or returns adequate for our audit have not been
received from branches not visited by us; or
the parent Company financial statements are not in agreement with the accounting records and returns; or
•
certain disclosures of directors’ remuneration specified by law are not made; or
•
• we have not received all the information and explanations we require for our audit.
We have nothing to report in these respects.
7 Respective responsibilities
Directors’ responsibilities
As explained more fully in their statement set out on page 14, the Directors are responsible for: the preparation of the financial
statements including being satisfied that they give a true and fair view; such internal control as they determine is necessary to enable
the preparation of financial statements that are free from material misstatement, whether due to fraud or error; assessing the Group
and Parent Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern; and using
the going concern basis of accounting unless they either intend to liquidate the Group or the Parent Company or to cease operations,
or have no realistic alternative but to do so.
Auditor’s responsibilities
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material
misstatement, whether due to fraud or error, and to issue our opinion in an auditor’s report. Reasonable assurance is a high level of
assurance but does not guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement
when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in aggregate, they could
reasonably be expected to influence the economic decisions of users taken on the basis of the financial statements.
A fuller description of our responsibilities is provided on the FRC’s website at www.frc.org.uk/auditorsresponsibilities.
19
Webis Holdings plc
Independent Auditor’s Report, to the members of Webis Holdings plc continued
8 The purpose of our audit work and to whom we owe our responsibilities
This report is made solely to the company’s members, as a body, in accordance with Section 15 of the Companies Act 1982. Our
audit work has been undertaken so that we might state to the company’s members those matters we are required to state to them in
an auditor’s report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to
anyone other than the company and the company’s members as a body, for our audit work, for this report, or for the opinions we
have formed.
KPMG Audit LLC
Chartered Accountants
Heritage Court
41 Athol Street
Douglas
Isle of Man IM1 1LA
6 January 2021
20
Webis Holdings plc
Consolidated Statement of Comprehensive Income
For the year ended 31 May 2020
Amounts wagered
Revenue
Cost of sales
Betting duty paid
Gross profit
Operating costs
Impairment loss on trade receivables
Re-organisational and other costs
Other losses
Government grant
Other income
Operating loss
Finance costs
Loss before income tax
Income tax expense
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 loss for the year
Total comprehensive loss for the year
Note
2020
US$000
2019
US$000
105,325
136,353
2
43,436
47,259
(38,820)
(42,625)
(83)
(146)
4,533
4,488
(4,908)
(5,277)
21
1.3
3
4
6
(18)
(28)
(29)
48
212
(190)
(94)
(284)
—
(284)
(67)
(54)
(166)
—
187
(889)
(41)
(930)
—
(930)
—
—
—
—
(284)
(930)
Basic earnings per share for loss attributable to the equity holders of the Company
during the year (cents)
Diluted earnings per share for loss attributable to the equity holders of the
Company during the year (cents)
7
7
(0.07)
(0.24)
(0.07)
(0.23)
The notes on pages 25 to 49 form part of these financial statements.
21
Webis Holdings plc
Statements of Financial Position
As at 31 May 2020
Note
31.05.20
Group
US$000
31.05.20
Company
US$000
31.05.19
Group
US$000
31.05.19
Company
US$000
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, cash equivalents and restricted cash
Total current assets
Total assets
Equity
Called up share capital
Share option reserve
Retained losses
Total equity
Current liabilities
Trade and other payables
Deferred income
Loans, borrowings and lease liabilities
Total current liabilities
Non-current liabilities
Loans, borrowings and lease liabilities
Total non-current liabilities
Total liabilities
Total equity and liabilities
8
9
10
11
11
13
12
17
17
14
15
16
16
The notes on pages 25 to 49 form part of these financial statements
The financial statements were approved by the Board of Directors on 6 January 2021
Denham Eke
Non-executive Chairman
30
415
—
101
546
882
1,256
3,969
6,107
6,653
6,334
42
—
7
2
—
9
—
463
1,780
2,243
2,252
6,334
42
104
26
—
101
231
882
1,191
2,594
4,667
4,898
7
10
3
—
20
—
427
1,416
1,843
1,863
6,334
6,334
42
42
(5,508)
(5,526)
(5,224)
(5,412)
868
850
1,152
964
3,749
272
97
4,118
1,667
1,667
5,785
6,653
52
—
—
52
1,350
1,350
1,402
2,252
2,896
—
—
2,896
850
850
3,746
4,898
49
—
—
49
850
850
899
1,863
22
Webis Holdings plc
Statements of Changes in Equity
For the year ended 31 May 2020
Group
Balance as at 31 May 2018
Total comprehensive loss for the year:
Loss for the year
Transactions with owners:
Share-based payment expense (note 17)
Balance as at 31 May 2019
Total comprehensive loss for the year:
Loss for the year
Transactions with owners:
Share-based payment expense (note 17)
Balance as at 31 May 2020
Company
Balance as at 31 May 2018
Total comprehensive loss for the year:
Loss for the year
Transactions with owners:
Share-based payment expense (note 17)
Balance as at 31 May 2019
Total comprehensive loss for the year:
Loss for the year
Transactions with owners:
Share-based payment expense (note 17)
Balance as at 31 May 2020
Called up
share capital
US$000
Share option
reserve
US$000
Retained
earnings
US$000
Total
equity
US$000
6,334
—
—
6,334
—
—
6,334
4
—
38
42
—
—
42
(4,294)
2,044
(930)
(930)
—
38
(5,224)
1,152
(284)
(284)
—
(5,508)
—
868
Called up
share capital
US$000
Share option
reserve
US$000
Retained
earnings
US$000
Total
equity
US$000
6,334
—
—
6,334
—
—
6,334
4
—
38
42
—
—
42
(5,282)
1,056
(130)
(130)
—
(5,412)
38
964
(114)
(114)
—
(5,526)
—
850
The notes on pages 25 to 49 form part of these financial statements.
23
Webis Holdings plc
Consolidated Statement of Cash Flows
For the year ended 31 May 2020
Cash flows from operating activities
Loss before income tax
Adjustments for:
- Depreciation of property, equipment and motor vehicles
- Amortisation of intangible assets
- Rent concession received
- Finance costs
- Government grant utilised
- Share based payment expense
- Other foreign exchange movements
Changes in working capital:
- (Increase) / decrease in receivables
- Increase / (decrease) in payables
Cash flows from operations
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
Net cash used in investing activities
Cash flows from financing activities
Interest paid
Payment of lease liabilities and rent concessions received
Repayment of loans and borrowings
Receipt of Government funding/grant
Loans, borrowings and lease liabilities received
Net cash generated from financing activities
Net increase / (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of year
Exchange gains / (losses) on cash and cash equivalents
(Increase) / decrease in movement of restricted cash
Cash and cash equivalents at end of year
The notes on pages 25 to 49 form part of these financial statements.
Note
2020
US$000
2019
US$000
(284)
(930)
9
8
4
17
11
8
9
4
12
122
73
(13)
94
(48)
—
(83)
(65)
853
649
—
649
—
(39)
(39)
(94)
(101)
(1)
320
556
680
34
80
—
41
—
38
363
1,109
(13,425)
(12,690)
1,964
(10,726)
(18)
—
(18)
(41)
—
—
—
350
309
1,290
(10,435)
1,363
11,962
85
(239)
2,499
(363)
199
1,363
24
Webis Holdings plc
Notes to the Financial Statements
For the year ended 31 May 2020
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 Webis Holdings plc consolidated financial statements as at and for the year
ended 31 May 2020 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.
Except for the changes detailed in note 1.2, the Group has consistently applied the accounting policies as set out in note 1.3 to
all periods presented in these financial statements.
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, unless otherwise indicated.
All continued operations of the Group have US Dollars as their functional currency.
Other information presented
In line with the Isle of Man Companies Acts 1931-2004, the Company also presents Parent Company Statements of Financial
Position, the Parent Company Statement of Changes in Equity and related disclosures
(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 consider the only critical judgement areas to be as follows:
• Note 16 – discount rates applied to lease liabilities. The Directors consider that the assumptions used to determine the
relevant incremental borrowing rates reflect fair market rates and are appropriate for the purposes of the calculations.
• Note 21 – the measurement of Expected Credit Loss (“ECL”) allowance for trade and other receivables and assessment of
specific impairment allowances where receivables are past due.
Going concern
The Group and Parent Company financial statements have been prepared on a going concern basis.
As indicated in the statement of comprehensive income, the Group has a loss of US$284,000 (2019: US$930,000) in the current
year and net assets have decreased from US$1,152,000 to US$868,000 due to that.
Further, WatchandWager.com LLC (USA Subsidiary) has been historically loss making and nullified the profit generated by
WatchandWager.com Limited (IOM Subsidiary) which resulted in the consolidated accumulated loss of US$5,508,000 at the
group level.
As noted within the Chairman’s Statement and note 23, the global coronavirus (“COVID-19”) pandemic has had an unprecedented
impact on communities and businesses worldwide. Despite this, the horseracing industry was able to reopen, albeit behind closed
doors, in advance of other sports which has attracted higher player numbers and wagering volumes. This has resulted in increased
profitability since the close of the financial year and extensive efforts have been made to promote the content and markets the
Group provides to a wider customer base with an increased focus on player retention. Whilst there can be no certainty as to the
level and duration of higher volumes and improved trading results, significant attention is being applied to sustain these trading
patterns through attracting and retaining new players.
The Directors recognise that there is difficulty in maintaining the recent uplift in revenue as other sporting events start up again.
25
Webis Holdings plc
Notes to the Financial Statements continued
1.1 Basis of preparation continued
Going concern continued
In order to help achieve its goal of profitability and maintaining adequate liquidity in order to continue its operations the Directors
are pursuing strategies that include:
•
•
•
broadening the Group’s client base and the continued expansion of its business to customer base;
continuing to renew and acquire further US state regulated gaming licenses and continuing to develop and expand the
Cal Expo racetrack operation; and
taking advantage of the anticipated regulatory change in the State of California’s adoption of sports betting legislation
which will further open up opportunities for the Group
Whilst the Directors continue to assess all strategic options in relation to the strategies noted in the previous paragraph, the
Directors recognize that the ultimate success of strategies adopted is difficult to predict as they require additional liquidity to
pursue the required investment, including bonds to be placed with the relevant authorities to allow for betting on those tracks and
excess cost to be paid to service providers to add more servers to allow for increased number of users . The Directors have
prepared cash flow forecasts for a period of 12 months from the date of approval of these financial statements which indicate that,
taking account of reasonably possible downsides, the Group is projected to have sufficient funds. Projections are inherently
uncertain (also considering the history of losses) and, in that regard, the related entity has committed to extend funding in case
the Group faces any difficulty to meet its liabilities as they fall due for that period.
The Company and the Group depend on Galloway Limited (related entity) for financial support and Galloway Limited has indicated
its intention to continue to make available funds as and when needed by the Group. The loan from Galloway Limited stands at
$1,350,000 as at 31 May 2020.
As with any company placing reliance on other parties for financial support, the Directors acknowledge that there can be no
certainty that this support will continue, although, at the date of approval of these financial statements, they have no reason to
believe that it will not do so. The willingness of Galloway Limited to continue to provide this support is reliant on the strategies
highlighted above which are subject to uncertainty.
Based on these indications, (namely cashflow projections and commitment of support from the related entity), the Directors believe
that it remains appropriate to prepare the financial statements on a going concern basis. However, the circumstances discussed
in the note represent a material uncertainty that may cast significant doubt on the Company’s and the Group’s ability to continue
as a going concern and, therefore, to continue realising its assets and discharging its liabilities in the normal course of
business. The financial statements do not include any adjustments to the carrying amounts and classification of assets, liabilities
and reported expenses that may otherwise be required if the basis of preparation should be inappropriate.
1.2 Changes in significant accounting policies
During the current year the Group adopted all the new and revised IFRSs that are relevant to its operation and are effective for
accounting periods beginning on 1 June 2019. Except for the transition to IFRS 16 detailed below, no other adoption had a
material effect on the accounting policies of the Group.
IFRS 16 Transition
IFRS 16 introduced a single, on-balance sheet accounting model for lessees. As a result, the Group, as a lessee, has recognised
right of use assets representing its rights to use the underlying assets and lease liabilities representing its obligation to make
lease payments.
The Group has applied IFRS 16 using the modified retrospective approach, under which the cumulative effect of initial application
is recognised in retained earnings as at 1 June 2019. Accordingly, the comparative information presented to 31 May 2019 has
not been restated – i.e. it is presented, as previously reported, under IAS 17 and related interpretations.
The details of the changes in accounting policies are disclosed below.
A. Definition of a lease
Previously, the Group determined at contract inception whether an arrangement was or contained a lease under IAS 17. The
Group now assesses whether a contract is, or contains, a lease based on the new definition of a lease. Under IFRS 16, a contract
is, or contains, a lease if the contract conveys a right to control the use of an identified asset for a period of time in exchange for
consideration.
On transition to IFRS 16, the Group elected to apply the practical expedient to grandfather the assessment of which transactions
are leases. It applied IFRS 16 only to contracts that were previously identified as leases. Contracts that were not identified as
leases under IAS 17 were not reassessed. Therefore, the definition of a lease under IFRS 16 has been applied only to contracts
entered into or changed on or after 1 June 2019.
26
Webis Holdings plc
Notes to the Financial Statements continued
1.2 Changes in significant accounting policies continued
IFRS 16 Transition continued
B. As a lessee
The Group leases property assets. As a lessee, the Group previously classified these leases as operating leases based on its
assessment of whether the lease transferred substantially all of the risks and rewards of ownership. Under IFRS 16, the Group
recognises right of use assets and lease liabilities for leases that meet the relevant definition, presenting these leases on the
Statement of Financial Position.
The Group does not recognise right of use assets and lease liabilities for property rental costs that do not meet the definition of
leases under IFRS 16. The Group recognises these costs as an expense on a straight-line basis.
i. Significant accounting policies
The Group recognises a right of use asset and a lease liability at the lease commencement/modification date. The right of use
asset is initially measured at cost, and subsequently at cost less accumulated depreciation and impairment loss and adjusted for
certain remeasurements of the lease liability.
The right of use asset is subsequently depreciated using the straight-line method from the commencement date to the end of the
lease term.
The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date,
discounted at the Group’s applicable incremental borrowing rate (the rate implicit in the lease cannot be determined). The Group
has measured the incremental borrowing as equal to external borrowing rates. The lease liability is subsequently increased by
the interest cost of the lease liability and decreased by the lease payment made. It is remeasured when there is a change in future
lease payments arising from a change in an index or rate, a change in the estimate of the amount expected to be payable under
a residual value guarantee, or as appropriate, changes in the assessment of whether a purchase or extension option is reasonably
certain to be exercised, or a termination option is reasonably certain not to be exercised.
The Group has applied judgment to determine the lease term for some lease contracts in which it is a lessee that include renewal
options. The assessment of whether the Group is reasonably certain to exercise such options impacts the lease term, which
affects the amount of lease liabilities and right of use assets recognised. Extension/renewal is only available to lessor on terms
and conditions to be agreed between both parties.
ii. Impacts on transition
Previously, the Group classified property leases as operating leases under IAS 17. The leases typically run for a period of 1 to 6
years and the operating lease commitment relating to these leases at 31 May 2019 as disclosed in the Group’s consolidated
financial statements was US$294,000. At transition, for relevant leases classified as operating leases under IAS 17, lease
liabilities were measured at the present value of the remaining lease payments, discounted at the Group’s applicable incremental
borrowing rate as at 1 June 2019. Right of use assets are measured at an amount equal to the lease liability, adjusted by the
amount of any net prepaid and accrued lease payments, if applicable. The impact on transition is summarised below.
As at 1 June 2019
Right of use assets
Lease liabilities
Retained earnings
iii. Impacts for the period
Right of use assets
The carrying amount of right of use assets at the end of the year is as follows:
Balance at 1 June 2019
Depreciation expense
Modification to right of use assets
Balance at 31 May 2020
US$000
262
(262)
–
Property
US$000
Right of use
assets
US$000
262
(98)
211
375
262
(98)
211
375
27
Webis Holdings plc
Notes to the Financial Statements continued
1.2 Changes in significant accounting policies continued
IFRS 16 Transition continued
iii. Impacts for the period continued
Lease liability
The carrying amount of lease liability at the end of the year is as follows:
Balance at 1 June 2019
Interest expense
Lease payments
Rent concessions received
Modification to lease liabilities
Balance at 31 May 2020
Property
US$000
Lease liability
US$000
262
25
(101)
(13)
211
384
262
25
(101)
(13)
211
384
The Group has classified cash payments for the principal portion of lease payments as financing activities. During the year under
review, an extension was agreed to the lease term of one of the leases, which has resulted in a modification to the relevant right
of use asset and lease liability.
During the year, the Group received a rent concession of US$12,600 and the practical expedient has been applied to all rent
concessions that meet the conditions. This was recognised as a deduction from depreciation expense.
iv. Exemptions taken
The Group used the following practical expedient when applying IFRS 16 to leases previously classified as operating leases
under IAS 17:
• Applied the exemption not to recognise right of use assets and lease liabilities for leases with less than 12 months of
lease term.
v. Lease policy until 31 May 2019
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.
1.3 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 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.
28
Webis Holdings plc
Notes to the Financial Statements continued
1.3 Summary of significant accounting policies continued
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 are presented in
the income statement within ‘Finance income’ or ‘Finance costs’. All other foreign exchange gains and losses are presented in
the income statement within ‘Other (losses)/gains’.
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 from contracts with customers
The Group generates revenue primarily from the provision of wagering services and the hosting of races on which guests are
entitled to participate in the related wagering services. Revenue is measured based on the consideration specified in a contract
with a customer. The Group recognises revenue when it discharges services to a customer. Revenue has been disaggregated
by geographical locations which are consistent with the operating segments (note 2).
Hosting fees (Racetrack operations) are recognised when the customers participate in the Group’s pari-mutuel pools and the race
audio visual signals are transmitted. Hosting fees are recorded on a gross receipts basis.
Wagering revenue from the Group’s activities as the race host is recognised when a race on which wagers are placed is
completed. The wagering commission from the Group’s commingling of its wagering pools with a host’s pool is recognised when
the race on which those wagers are placed is completed. The Group acts as a principal when it allows customers to place wagers
in the races it hosts and as an agent when it allows customers to place wagers in other entities’ races.
Settlement terms for revenue where the Group acts as a host is usually 7 days for on and off-track wagering and 30 days from
month end for ADW wagering. Where the Group acts as an agent, settlement terms are typically 30 days from month end.
Transactions fees (ADW operations) are recognised when the Group facilitates customers’ deposit transactions into their betting
accounts. The Group recognises revenue for transaction services net of related winnings.
Government grants
The Group initially recognises government grants, that compensate for expenses incurred, as deferred income at fair value if
there is a reasonable assurance that they will be received. They are then recognised in profit or loss on a systematic basis in the
periods in which the expenses are recognised.
Segmental reporting
Segmental reporting is based on the business areas in accordance with the Group’s internal reporting structure, which allows the
individual operating segments to be identified by the disparate nature of the principal activity they undertake. The Group
determines and presents segments based on the information that internally is provided to the Board and 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 Board and 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.
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.
29
Webis Holdings plc
Notes to the Financial Statements continued
1.3 Summary of significant accounting policies continued
Current and deferred income tax continued
Current tax comprises the expected tax payable or receivable on the taxable income or loss for the year and any adjustment to
the tax payable or receivable in respect of previous years. The amount of current tax payable or receivable is the best estimate
of the tax amount expected to be paid or received that reflects uncertainty related to income taxes, if any. It is measured using
tax rates enacted or substantively enacted at the reporting date. Current tax also includes any tax arising from dividends. Current
tax assets and liabilities are offset only if certain criteria are met.
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.
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:
30
Webis Holdings plc
Notes to the Financial Statements continued
1.3 Summary of significant accounting policies continued
Intangible assets — other continued
(b) Website design and development costs continued
• 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.
The estimated useful lives of property, equipment and motor vehicles for current and comparative periods are as follows:
Plant and equipment
Motor vehicles
Fixtures and fittings
3 years
5 years
3 years
Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised within
‘Other gains/(losses) – net’ in the income statement.
Share-based payment expense
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.
31
Webis Holdings plc
Notes to the Financial Statements continued
1.3 Summary of significant accounting policies continued
Equity
Share capital is determined using the nominal value of shares that have been issued.
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
Recognition and measurement
Non-derivative financial instruments include trade and other receivables, cash and cash equivalents, bonds and deposits,
borrowings and trade and other payables.
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.
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.
Bonds and deposits
Bonds and deposits are recognised initially at fair value and subsequently measured at amortised cost using the effective interest
method, less provision for impairment.
Borrowings
Interest-bearing 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.
Impairment of financial assets
The Group uses an impairment model that applies to financial assets measured at amortised cost and contract assets and is
detailed below. Financial assets at amortised cost include trade receivables, cash and cash equivalents, bonds and deposits.
Performing financial assets
Stage 1
From initial recognition of a financial asset to the date on which an asset has experienced a significant increase in credit risk
relative to its initial recognition, a stage 1 loss allowance is recognised equal to the credit losses expected to result from its default
occurring over the earlier of the next 12 months or its maturity date (‘12-month ECL’).
Stage 2
Following a significant increase in credit risk relative to the initial recognition of the financial asset, a stage 2 loss allowance is
recognised equal to the credit losses expected from all possible default events over the remaining lifetime of the asset (‘Lifetime
ECL’). The assessment of whether there has been a significant increase in credit risk requires considerable judgment, based on
the lifetime probability of default (‘PD’). Stage 1 and 2 allowances are held against performing loans; the main difference between
stage 1 and stage 2 allowances is the time horizon. Stage 1 allowances are estimated using the PD with a maximum period of 12
months, while stage 2 allowances are estimated using the PD over the remaining lifetime of the asset.
32
Webis Holdings plc
Notes to the Financial Statements continued
1.3 Summary of significant accounting policies continued
Financial instruments continued
Impairment of financial assets continued
Impaired financial assets
Stage 3
When a financial asset is considered to be credit-impaired, the allowance for credit losses (‘ACL’) continues to represent lifetime
expected credit losses, however, interest income is calculated based on the amortised cost of the asset, net of the loss allowance,
rather than its gross carrying amount.
The Group applies the ECL model to two main types of financial assets that are measured at amortised cost:
Trade receivables, to which the simplified approach (provision matrix) prescribed by IFRS 9 is applied. This approach requires
the recognition of a Lifetime ECL allowance on day one.
Other financial assets at amortised cost, to which the general three stage model (described above) is applied, whereby a 12-
month ECL is recognised initially and the balance is monitored for significant increases in credit risk which triggers the recognition
of a Lifetime ECL allowance.
ECLs are a probability-weighted estimate of credit losses. ECLs for financial assets that are not credit-impaired at the reporting
date are measured as the present value of all cash shortfalls (i.e. the difference between the cash flows due in accordance with
the contract and the cash flows that the company expects to receive). ECLs for financial assets that are credit-impaired at the
reporting date are measured as the difference between the gross carrying amount and the present value of estimated future cash
flows. ECLs are discounted at the effective interest rate of the financial asset which is 0% for all financial assets at amortised
cost. The maximum period considered when estimating ECLs is the maximum contractual period over which the Group is exposed
to credit risk. The measurement of ECLs considers information about past events and current conditions, as well as supportable
information about future events and economic conditions. The Group reviews its impairment methodology for estimating the ECLs,
taking into account forward-looking information in determining the appropriate level of allowance. In addition, it identifies indicators
and set up procedures for monitoring for significant increases in credit risk.
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 accrual’s 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.
Standards and interpretations in issue not yet adopted
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:
Standards
Amendments to IFRS 9, IAS 39 and IFRS 7: Interest Rate Benchmark Reform (issued on 26
September 2019)
Amendments to IAS 1 and IAS 8: Definition of Material (issued on 31 October 2018)
Amendments to References to the Conceptual Framework in IFRS Standards (issued on 29
March 2018)
Effective date
(accounting periods
commencing on or after)
1 January 2020
1 January 2020
1 January 2020
33
Webis Holdings plc
Notes to the Financial Statements continued
2 Operating Segments
A. Basis for segmentation
The Group has the below two operating segments, which are its reportable segments. The segments offer different services in
relation to various forms of pari-mutuel racing, which are managed separately due to the nature of their activities.
Reportable segments and operations provided
Racetrack operations – hosting of races through the management and operation of a racetrack facility, enabling patrons to attend
and wager on horse racing, as well as utilise simulcast facilities.
ADW operations – provision of online ADW services to enable customers to wager into global racetrack betting pools.
The Group’s Board of Directors review the internal management reports of the operating segment on a monthly basis.
Information about reportable segments
B.
Information relating to the reportable segments is set out below. Segment revenue along with segment profit / (loss) before tax
are used to measure performance as management considers this information to be a relevant indicator for evaluating the
performance of the segments.
External revenues
Segment revenue
Segment profit / (loss) before tax
Interest expense
Depreciation and amortisation
Other material non-cash items:
-
Impairment losses on trade receivables
Segment assets
Segment liabilities
External revenues
Segment revenue
Segment loss before tax
Interest expense
Depreciation and amortisation
Other material non-cash items:
Impairment losses on trade receivables
Segment assets
Segment liabilities
Reportable segments
Racetrack
2020
US$000
41,071
41,071
62
(20)
(71)
–
1,185
870
Corporate
operating
costs
2020
US$000
ADW
2020
US$000
2,365
2,365
(232)
(5)
(124)
(18)
3,216
3,513
–
–
(114)
(69)
–
–
2,252
1,402
Reportable segments
Racetrack
2019
US$000
ADW
2019
US$000
Corporate
operating
costs
2019
US$000
44,753
44,753
(97)
–
(8)
–
423
181
2,506
2,506
(708)
–
(106)
(67)
2,612
2,666
–
–
(125)
(41)
–
–
1,863
899
Total
2020
US$000
43,436
43,436
(284)
(94)
(195)
(18)
6,653
5,785
Total
2019
US$000
47,259
47,259
(930)
(41)
(114)
(67)
4,898
3,746
34
Webis Holdings plc
Notes to the Financial Statements continued
2 Operating Segments continued
C. Reconciliations of information on reportable segments to the amounts reported in the financial statements
i. Revenues
Total revenue for reportable segments
Consolidated revenue
ii. Loss before tax
Total loss before tax for reportable segments
Loss before tax for other segments
Consolidated loss before tax
iii. Assets
Total assets for reportable segments
Assets for other segments
Consolidated total assets
iv. Liabilities
Total liabilities for reportable segments
Liabilities for other segments
Consolidated total liabilities
v. Other material items
Interest expense
Depreciation and amortisation
Impairment losses on trade receivables
There were no reconciling items noted between Segment information and the Financial Statements.
D. Geographic information
i. Revenues
The below table analyses the geographic location of the customer base of the operating segments.
Revenue
Racetrack operations
ADW operations
ADW operations
ADW operations
North America
North America
British Isles
Asia Pacific
2020
US$000
2019
US$000
43,436
43,436
47,259
47,259
(170)
(114)
(284)
4,401
2,252
6,653
4,383
1,402
5,785
(94)
(195)
(18)
(805)
(125)
(930)
3,035
1,863
4,898
2,847
899
3,746
(41)
(114)
(67)
2020
US$000
2019
US$000
41,071
1,599
760
6
44,753
1,541
692
273
43,436
47,259
35
Webis Holdings plc
Notes to the Financial Statements continued
2 Operating Segments continued
D. Geographic information continued
ii. Non-current assets
The geographical information below analyses the Group’s non-current assets by the Company’s Country of Domicile (Isle of Man)
and the United States of America. Information is based on geographical location of Group’s assets.
United States of America
Isle of Man
Non-current assets exclude financial instruments.
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
Loan interest payable
Finance costs
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
2020
US$000
2019
US$000
439
6
445
113
17
130
2020
US$000
2019
US$000
96
122
73
29
–
–
64
81
34
80
166
30
74
67
2020
US$000
2019
US$000
(94)
(94)
(41)
(41)
2020
2019
52
55
2020
US$000
2019
US$000
1,701
114
1,815
1,711
121
1,832
36
Webis Holdings plc
Notes to the Financial Statements continued
6
Income tax expense
(a) Current and Deferred Tax Expenses
The current and deferred tax expenses for the year were US$Nil (2019: US$Nil). Despite having made losses, no deferred tax
was recognised as there is no reasonable expectation that the Group will recover the resultant deferred tax assets.
(b) Tax Rate Reconciliation
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
2020
US$000
2019
US$000
(284)
(930)
–
–
(97)
97
–
(166)
166
–
The maximum deferred tax asset that could be recognised at year end is approximately US$907,000 (2019: US$810,000). The
Group has not recognised any asset as it is not reasonably known whether the Group will recover such deferred tax assets.
7 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 in the current 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
Weighted average number of ordinary shares in issue
Dilutive element of share options if exercised (note 17)
Diluted number of ordinary shares
Basic earnings per share (cents)
Diluted earnings per share (cents)
2020
US$000
2019
US$000
(284)
(930)
No.
No.
393,338,310
393,338,310
14,000,000
14,000,000
407,338,310
407,338,310
(0.07)
(0.07)
(0.24)
(0.23)
The earnings applied are the same for both basic and diluted earnings calculations per share as there are no dilutive effects to
be applied.
37
Webis Holdings plc
Notes to the Financial Statements continued
8
Intangible assets
Goodwill
Software & development
costs
Total
Group
US$000
Group
US$000
Company
US$000
Group
US$000
Company
US$000
Cost
Balance at 1 June 2018
Additions during the year
Balance at 31 May 2019
Balance at 1 June 2019
Additions during the year
Decommissioned assets
Balance at 31 May 2020
Amortisation and Impairment
Balance at 1 June 2018
Amortisation for the year
Balance at 31 May 2019
Balance at 1 June 2019
Amortisation for the year
Decommissioned assets
Currency translation differences
Balance at 31 May 2020
Carrying amounts
At 1 June 2018
At 31 May 2019
At 31 May 2020
177
–
177
177
–
–
177
177
–
177
177
–
–
–
177
–
–
–
1,485
18
1,503
1,503
–
(905)
598
1,319
80
1,399
1,399
73
(905)
1
568
166
104
30
64
–
64
64
–
(49)
15
51
6
57
57
6
(49)
1
15
13
7
–
1,662
18
1,680
1,680
–
(905)
775
1,496
80
1,576
1,576
73
(905)
1
745
166
104
30
64
–
64
64
–
(49)
15
51
6
57
57
6
(49)
1
15
13
7
–
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).
During the year a review of assets held was undertaken to remove any historical items that were considered to be
decommissioned and therefore no longer held by the Group. This principally relates to software and website costs that were fully
amortised and removed from service in previous years following changes to those business activities and/or assets reaching their
end of useful life.
38
Webis Holdings plc
Notes to the Financial Statements continued
9 Property, equipment and motor vehicles
Computer
Equipment
US$000
Fixtures,
Fittings &
Track
Equipment
US$000
Motor
Vehicles
US$000
Right of
Use Assets
US$000
Total
US$000
Group
Cost
Balance at 1 June 2018
Balance at 31 May 2019
Balance at 1 June 2019
Additions during the year
Decommissioned/disposed assets
Balance at 31 May 2020
Depreciation
Balance at 1 June 2018
Charge for the year
Balance at 31 May 2019
Balance at 1 June 2019
Charge for the year
604
604
604
5
(447)
162
567
19
586
586
16
580
580
580
–
(339)
241
570
7
577
577
2
51
51
51
34
(35)
50
38
8
46
46
6
–
–
–
1,235
1,235
1,235
473
512
–
(821)
473
926
–
–
–
–
98
–
–
98
–
–
1,175
34
1,209
1,209
122
(821)
1
511
60
26
375
415
Decommissioned/disposed assets
(447)
(339)
(35)
Currency translation differences
Balance at 31 May 2020
Carrying amounts
At 1 June 2018
At 31 May 2019
At 31 May 2020
–
155
37
18
7
1
241
10
3
–
–
17
13
5
33
Right of use assets relate to two assets: an office building leased until May 2021, with an average length of renewal of three
years; and a racetrack facility leased until May 2025, with extensions or renewals typically ranging between three to five years.
Company
Cost
Balance at 1 June 2018
Balance at 31 May 2019
Balance at 1 June 2019
Additions during the year
Discarded assets
Balance at 31 May 2020
Computer
Equipment
US$000
Fixtures &
Fittings
US$000
Total
US$000
429
429
429
5
(401)
33
139
139
139
–
(59)
80
568
568
568
5
(460)
113
39
Webis Holdings plc
Notes to the Financial Statements continued
9 Property, equipment and motor vehicles continued
Company
Depreciation
Balance at 1 June 2018
Charge for the year
Balance at 31 May 2019
Balance at 1 June 2019
Charge for the year
Discarded assets
Balance at 31 May 2020
Carrying amounts
At 1 June 2018
At 31 May 2019
At 31 May 2020
Computer
Equipment
US$000
Fixtures &
Fittings
US$000
Total
US$000
410
9
419
419
8
(401)
26
19
10
7
139
–
139
139
–
(59)
80
–
–
–
549
9
558
558
8
(460)
106
19
10
7
During the year a review of assets held was undertaken to remove any historical items that were considered to be
decommissioned and therefore no longer held by the Group. This principally relates to computer hardware and equipment costs
that were fully depreciated and removed from service in previous years following changes to those business activities and/or
assets reaching their end of useful life.
10 Investments
Investments in subsidiaries are held at cost. Details of investments at 31 May 2020 are as follows:
Subsidiaries
Country of
incorporation
WatchandWager.com Limited
Isle of Man
Activity
Holding (%)
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
B.E. Global Services Limited
Isle of Man
Isle of Man
Dormant
Dormant
Dormant
100
100
100
100
100
11 Bonds and deposits
Bonds and deposits which expire within one year
Bonds and deposits which expire within one to two years
Bonds and deposits which expire within two to five years
Group
Company
2020
US$000
2019
US$000
2020
US$000
2019
US$000
882
–
101
983
882
–
101
983
–
–
–
–
–
–
–
–
40
Webis Holdings plc
Notes to the Financial Statements continued
11 Bonds and deposits continued
Cash bonds of US$875,000 have been paid as security deposits in relation to various US State ADW licences (2019:
US$875,000). These cash bonds are held in trust accounts used exclusively for cash collateral, with financial institutions which
have been screened for their financial strength and capitalization ratio. The financial institutions have a credit rating of A-
Excellent from AM Best credit rating agency. Therefore, these bonds are considered to be fully recoverable. A rent deposit of
US$100,000 is held by California Exposition & State Fair and is for a term of 5 years (2019: US$100,000). This is held by an
entity of the Californian state government and is therefore considered fully recoverable. Rent and other security deposits total
US$8,155 (2019: US$8,227). These deposits are repayable upon completion of the relevant lease term, under the terms of
legally binding agreements.
12 Cash, cash equivalents and restricted cash
Cash and cash equivalents – company and other funds
Restricted cash – protected player funds
Total cash, cash equivalents and restricted cash
Group
Company
2020
US$000
2019
US$000
2020
US$000
2019
US$000
2,499
1,470
3,969
1,363
1,231
2,594
324
1,456
1,780
185
1,231
1,416
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 and certain USA state customers, shown as ‘protected player funds’.
Protected player funds are held in fully protected client accounts within an Isle of Man regulated bank and in segregated accounts
within a USA regulated bank.
13 Trade and other receivables
Trade receivables
Amounts due from Group undertakings
Other receivables and prepayments
Group
Company
2020
US$000
2019
US$000
2020
US$000
2019
US$000
675
–
581
770
–
421
1,256
1,191
–
428
35
463
–
393
34
427
Included within trade receivables are impairment provisions of US$85,775 (see note 21), (2019: US$66,738).
Amounts due from Group undertakings are unsecured, interest free and repayable on demand.
14 Trade and other payables
Trade payables
Amounts due to customers
Taxes and national insurance
Accruals and other payables
Group
Company
2020
US$000
2019
US$000
2020
US$000
2019
US$000
603
2,446
22
678
425
2,194
17
260
3,749
2,896
9
–
2
41
52
12
–
2
35
49
41
Webis Holdings plc
Notes to the Financial Statements continued
15 Deferred income
Government grant
Group
Company
2020
US$000
272
2019
US$000
2020
US$000
2019
US$000
–
–
–
The Group received a Paycheck Protection Program (“PPP”) loan for US$319,994, under the provisions of the US CARES Act in
May 2020 to support certain incurred expenses. The provisions of the loan allow for an application for loan forgiveness, directly
relating to expenditure incurred in the 24-week period from the date of the loan advance, of which at least 60% must be on payroll
related expenditure. The Group has ascertained reasonable assurance that the loan should be forgiven in its entirety and the
application for forgiveness is expected to be submitted in late 2020/early 2021. The grant will be recognised in profit or loss in
the periods that the relevant expenses are recognised.
16 Loans, borrowings and lease liabilities
Current liabilities
Unsecured loans (current portion)
Lease liabilities (current portion) (see note 1.2)
Non-current liabilities
Unsecured loans (non-current portion)
Lease liabilities (non-current portion) (see note 1.2)
Secured loans – Galloway Ltd
Terms and repayment schedule
Unsecured loan
Lease liabilities (see note 1.2)
Secured loan – Galloway Ltd
Secured loan – Galloway Ltd
Secured loan – Galloway Ltd
Total loans and borrowings
Group
Company
2020
US$000
2019
US$000
2020
US$000
2019
US$000
5
92
97
–
–
–
–
–
–
–
–
–
Group
Company
2020
US$000
2019
US$000
2020
US$000
2019
US$000
25
292
1,350
1,667
–
–
850
850
–
–
1,350
1,350
–
–
850
850
Nominal
interest rate
Year of
maturity
8.90%
2025
7.00-9.00%
2021-25
7.75%
7.00%
7.00%
2022
2024
2025
2020
Total
US$000
2019
Total
US$000
30
384
500
350
500
1,764
—
—
500
350
—
850
42
During the year, the Group received the following loans:
Lender
Galloway Ltd
Volkswagen Marin
Principal
US$500,000
US$30,911
Drawdown
March 2020
March 2020
Remaining
term
Term
5 years 4.75 years
5 years 4.75 years
Interest rate
7.00% pa
8.90% pa
The secured loans from Galloway Ltd are secured over the unencumbered assets of the Group.
Webis Holdings plc
Notes to the Financial Statements continued
17 Share capital
Allotted, issued and fully paid
At beginning and close of year: ordinary shares of 1p each
At 31 May: ordinary shares of 1p each
No.
2020
US$000
2019
US$000
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 (2019:
US$9,619,000 divided into 600,000,000 ordinary shares of £0.01 each).
Options
Movements in share options during the year ended 31 May 2020 were as follows:
At 31 May 2019 – 1p ordinary shares
Options granted
Options lapsed
Options exercised
At 31 May 2020 – 1p ordinary shares
No.
14,000,000
–
–
–
14,000,000
During 2016 the Group established an equity-settled share-based option program. The fair value of options granted is recognised
as an expense, with a corresponding increase in equity. The fair value is measured at grant date using a Black-Scholes model
and is spread over the vesting period. The amount recognised in equity is adjusted to reflect the actual number of share options
which are expected to vest. By taking into consideration the volatility of the shares over the 3 years prior to granting, the volatility
of the options is calculated at 75%, with a risk-free interest rate of 0.86%.
The options were issued on 3 March 2016 to Ed Comins, Managing Director of the Group. The fair value of each option on the
grant date was estimated as being £0.0022. The share options vested on 3 March 2019 after Ed Comins had remained in the
employment of the Group for 3 years from when the options were granted. The options are able to be exercised from 3 March
2019 and expire on 2 March 2026. The weighted average exercise price of all options is £0.01.
The charge for share options recorded in profit and loss for the year was US$Nil (2019: US$37,989), with the corresponding
amount reflected in the share option reserve in the Statement of Financial Position and Statement of Changes in Equity. Since
the grant date, the total charge in relation to the share options was US$42,126.
18 Capital commitments
As at 31 May 2020, the Group had no known capital commitments (2019: US$Nil).
19 Operating lease commitments
At 31 May 2020, 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
2020
US$000
2019
US$000
–
–
–
108
186
–
The Group has recognised in the income statement operating lease payments of US$Nil (2019: US$104,000).
The Group leases had comprised office facilities and racetrack facilities in 2019. These leases now fall under the definition of
IFRS 16 and are disclosed accordingly.
43
Webis Holdings plc
Notes to the Financial Statements continued
20 Related party transactions
Identity of related parties
The Parent Company has a related party relationship with its subsidiaries (see note 10), 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$26,273 (2019: US$45,484) and Directors’ fees of US$45,435 (2019: US$46,898) were charged
in the year by Burnbrae Limited, of which Denham Eke is a common Director. The Group also had loans of US$1,350,000 (2019:
US$850,000) from Galloway Ltd, a company related to Burnbrae Limited by common ownership and Directors (note 17).
Transactions with key management personnel
The total amounts for Directors’ remuneration were as follows:
Emoluments — salaries, bonuses and taxable benefits
2020
US$000
2019
US$000
368
348
64
432
67
415
— fees
Directors’ Emoluments
Executive
Ed Comins
Non-executive
Denham Eke*
Nigel Caine*
Sir James Mellon
Aggregate emoluments
* Paid to Burnbrae Limited.
Basic
salary
US$000
Fees
US$000
Bonus
US$000
Termination
payments
US$000
Benefits
US$000
2020
Total
US$000
2019
Total
US$000
310
—
—
—
310
—
25
20
19
64
30
—
—
—
30
—
—
—
—
—
28
—
—
—
28
368
348
25
20
19
26
21
20
432
415
14,000,000 share options were issued to Ed Comins (see note 17) during 2016.
21 Financial risk management
Capital structure
The Group’s capital structure is as follows:
Cash and cash equivalents
Loans and similar liabilities
Net funds
Shareholders’ equity
Capital employed
2020
US$000
2019
US$000
2,499
1,363
(1,380)
1,119
(868)
251
(850)
513
(1,152)
(639)
44
Webis Holdings plc
Notes to the Financial Statements continued
21 Financial risk management continued
Capital structure continued
The Group’s policy is to maintain as strong a capital base as possible, insofar as can be sustained due to the fluctuations in the
net results of the Group and the inherent effect this has on the capital structure.
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. Other customer balances are covered by cash funds held within the Group and by receivables due from ADW
racetrack settlement partners. The Directors anticipate that the business will generate sufficient cash flow in the forthcoming
period, to meet its immediate financial obligations.
The following are the contractual maturities of financial liabilities:
2020
Financial liabilities
Trade payables
Amounts due to customers
Other payables, loans and deferred income
Lease liabilities
2019
Financial liabilities
Trade payables
Amounts due to customers
Other payables and loans
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
(603)
(2,446)
(1,967)
(384)
(603)
(2,446)
(1,967)
(384)
(603)
(2,446)
(590)
(16)
(5,400)
(5,400)
(3,655)
–
–
(2)
(76)
(78)
–
–
(1,375)
(292)
(1,667)
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
(425)
(425)
(425)
(2,194)
(2,194)
(2,194)
(865)
(865)
(15)
(3,484)
(3,484)
(2,634)
–
–
–
–
–
–
(850)
(850)
45
Webis Holdings plc
Notes to the Financial Statements continued
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.
Impairment losses on financial assets recognised in profit or loss were as follows:
Non-credit impaired trade receivables
Credit impaired trade receivables
Total impairment losses
2020
US$000
2019
US$000
23
62
85
5
62
67
The Group’s exposure to credit risk is influenced by the characteristics of the individual racetracks and the settling agents
operating on behalf of these tracks. The racetracks themselves are influenced by many factors, including the product they offer,
supporting sources of revenue they might generate, such as offering simulcast, slots or sports wagering facilities, current
economic conditions, ownership structure and so on, all of which can affect their liquidity.
The Group limits its exposure to credit risk by regular settling and verification of balances due to and from settling agents, with
standard terms of one month. While there is on occasion debt that is slower to be settled, historical settlements for the last five
years show that of the current trade receivable balance, greater than 99% would be expected to be received.
In addition, more than 75% of the current Group customers have transacted with the Group for five years or more and none of
these customers balances have been specifically impaired in that period.
While there has been an obvious impact from Covid-19 across many industries worldwide, horse racing was one of the few events
that managed to maintain some activity during the initial months of the pandemic. There was a natural slowdown of settlements
from settling agents and tracks, but overall, the Group has currently suffered no losses from the receivables that were due.
Nevertheless, the Group has taken a more conservative approach to the assessment of the Weighted Average Loss Rate and
increased these rates to reflect the added risk that exists under current market conditions.
The following table provides information about exposure to credit risk and expected credit losses for trade receivables as at 31
May 2020:
2020
Current (not past due)
1-30 days past due
31-60 days past due
61-90 days past due
More than 90 days past due
More than 90 days past due
2019
Current (not past due)
1-30 days past due
31-60 days past due
61-90 days past due
More than 90 days past due
More than 90 days past due
Weighted
Average
Loss Rate
(%)
0.50%
1.00%
6.00%
8.00%
10.00%
100.00%
Gross
Carrying
Amount
US$000
305
129
97
147
20
62
760
Loss
Allowance
US$000
(2)
(1)
(6)
(12)
(2)
(62)
(85)
Net
Carrying
Amount
US$000
303
128
91
135
18
—
675
Credit
Impaired
No
No
No
No
No
Yes
Weighted
Average Loss
Rate (%)
0.25%
0.50%
1.00%
2.50%
5.00%
100.00%
Gross Carrying
Amount
US$000
385
294
55
28
13
62
837
Loss Allowance
US$000
(1)
(1)
(1)
(1)
(1)
(62)
(67)
Net Carrying
Amount
US$000
384
293
54
27
12
—
770
Credit Impaired
No
No
No
No
No
Yes
46
Webis Holdings plc
Notes to the Financial Statements continued
21 Financial risk management continued
Credit risk continued
The Group uses an allowance matrix to measure the ECLs of trade receivables from racetracks and their settling agents, which
comprise a moderate number of balances, ranging from small to large. The Group has reviewed its historical losses over the past
four years as well as considering current economic conditions in estimating the loss rates and calculating the corresponding loss
allowance.
Classes of financial assets — carrying amounts
Cash and cash equivalents
Bonds and deposits
Trade and other receivables
2020
US$000
2019
US$000
2,499
983
1,184
4,666
1,363
983
1,051
3,397
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
2020
US$000
2019
US$000
1,184
1,051
Of the above receivables, US$675,000 (2019: US$770,000) 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. The banks have external credit ratings of at least Baa3 from Moody’s.
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
as the Group and Parent Company do not have floating rate loans payable.
Foreign currency risks
The Group operates internationally and is subject to transactional foreign currency exposures, primarily with respect to Pounds
Sterling, Hong Kong Dollars and Euros.
The Group does not actively manage the exposures but regularly monitors the Group’s currency position and exchange rate
movements and makes decisions as appropriate.
At the reporting date the Group had the following exposure:
2020
Current assets
Current liabilities
Short-term exposure
USD
US$000
GBP
US$000
EUR
US$000
HKD
US$000
Total
US$000
5,144
(3,170)
1,974
53
(127)
(74)
130
(83)
47
708
6,035
(716)
(4,096)
(8)
1,939
47
Webis Holdings plc
Notes to the Financial Statements continued
21 Financial risk management continued
Foreign currency risks continued
2019
Current assets
Current liabilities
Short-term exposure
USD
US$000
GBP
US$000
EUR
US$000
HKD
US$000
Total
US$000
3,128
(1,911)
1,217
289
(196)
93
427
(84)
343
683
4,527
(688)
(2,879)
(5)
1,648
The following table illustrates the sensitivity of the net result for the year and equity with 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 2020 would have increased/(decreased) equity and
profit and loss by the amounts shown below:
2020
Current assets
Current liabilities
Net assets
2019
Current assets
Current liabilities
Net assets
GBP
US$000
EUR
US$000
HKD
US$000
Total
US$000
3
(6)
(3)
6
(4)
2
35
(36)
(1)
44
(46)
(2)
GBP
US$000
EUR
US$000
HKD
US$000
Total
US$000
15
(10)
5
21
(4)
17
34
(34)
–
70
(48)
22
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 Impact of COVID-19 on the Company’s operations after year end
COVID-19 has impacted the operations of the entity during the last few weeks of the financial year. Since 31 May 2020, COVID-
19 has continued to cause severe implications for many local economies around the globe. In many countries, businesses are
being forced to cease or limit operations for long or indefinite periods of time. Measures taken to contain the spread of the virus,
including travel bans, quarantines, social distancing, and closures of non-essential services have triggered significant disruptions
to businesses worldwide, resulting in an economic slowdown, which continued to be in place after year end. Global stock markets
have also continued experienced great volatility and a significant weakening. Governments and central banks continued
responding with monetary and fiscal interventions to stabilise economic conditions.
The horseracing industry has continued to operate behind closed doors and the level of wagering opportunities and global content
the Group can offer has remained resilient to date. With a reduction in other sports events, the Group has seen a
significant increase in retail player numbers and wagering volumes which has yielded improved trading results. New and
refined strategies aimed at winning and retaining new player accounts remain a core focus of the Group to underpin a larger and
wider customer base that can deliver profitable and consistent revenue streams. Whilst significant efforts have been directed
towards this objective, there can be no certainty that these operating results will continue at current levels or that future
wagering content will not be affected by further restrictions aimed at curbing the spread of future outbreaks.
48
Webis Holdings plc
Notes to the Financial Statements continued
23 Impact of COVID-19 on the Company’s operations after year end continued
Based on an assessment of the impact of COVID-19 on the Group, the Directors determined that any events occurring after year
end disclosed in this note are deemed non-adjusting subsequent events. Accordingly, the financial position and results of
operations as of and for the year ended 31 May 2020 have not been adjusted to reflect their impact. The duration and impact of
the COVID-19 pandemic, as well as the effectiveness of government and central bank responses, remains unclear at this time. It
is not possible to reliably estimate the duration and severity of these consequences, as well as their ultimate impact on the
financial position and results of the Group for future periods.
24. Subsequent events
To the knowledge of the Directors, there have been no other material events since the end of the reporting period that require
disclosure in the accounts.
49
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 1 February 2021 at 11 am for the purpose of
transacting the below business.
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:
for
the meeting considering
The Board has considered how best to deal with the practical
the unique
arrangements
circumstances of the ongoing COVID-19 pandemic. In
particular, the Board has also considered the measures
introduced by the Isle of Man Government in response to the
COVID-19 pandemic, still currently in force, which would
prevent shareholders, advisers and directors of the Company
who are not residents of the Isle of Man to attend the AGM in
person. Of those measures, the most relevant to the AGM are
the restrictions governing travelling to the Isle of Man, which
require a 14-day period of self-isolation.
The Board considers it important that all shareholders should
have the opportunity to exercise their voting rights at the AGM.
To this end, the Company invites shareholders to complete
the voting proxy form as early as possible. Shareholders may
also submit questions to the Company Secretary either in
writing
email
to ir@webisholdingsplc.com prior to the meeting and as early
as possible.
registered
office
the
by
or
at
The Company will continue to monitor the advice of the Isle of
Man Government and, in the event of material changes to the
current advice, the Company will update its shareholders via
the regulatory information service.
Ordinary Business
1 To receive and adopt the report of the Directors and the
accounts for the year ended 31 May 2020.
2 To re-elect as a director Ed Comins 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
(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
problems
respect of overseas shareholders,
fractional entitlements or otherwise howsoever);
laws of any
territory or
the
in
(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
50
Webis Holdings plc
Notice of Meeting continued
As Ordinary Resolutions continued
(d) the authority conferred by this resolution shall expire at
the conclusion of the next Annual General Meeting of
the Company after the date of the passing of this
resolution unless renewed, varied or revoked by the
Company in General Meeting, but not so as to
prejudice the completion of a purchase contracted
before that date.
7 That the Report of the Remuneration Committee be
received and adopted.
By order of the Board
Piotr Schabik
Company Secretary
6 January 2021
Registered Office: Viking House
Nelson Street, Douglas
Isle of Man, IM1 2AH
Notes
1. Members are entitled to appoint a proxy to exercise all or
any of their rights to attend and vote on their behalf at the
meeting. A proxy need not be a shareholder of the
Company. A shareholder may appoint more than one
proxy in relation to the Annual General Meeting provided
that each proxy is appointed to exercise the rights
attached to a different share or shares held by that
shareholder. To appoint more than one proxy you may
photocopy the proxy form accompanying this notice.
Please indicate the proxy holder’s name and the number
of shares in relation to which they are authorised to act as
your proxy (which, in aggregate, should not exceed the
number of shares held by you). Please also indicate if the
proxy instruction is one of multiple instructions being
given. All forms must be signed and should be returned
together in the same envelope.
2. To be valid, the form of proxy and the power of attorney or
other authority (if any) under which it is signed - or a
notarially certified or office copy of such power or authority
- must be lodged at the offices of the Company’s registrars,
Link Group, 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 30 January 2021 shall be entitled to
attend and vote at the meeting. Changes to the register
after close of business on 30 January 2021 shall be
disregarded in determining the rights of any person to
attend and vote at the meeting.
8. Where a corporation is to be represented at the meeting
by a personal representative, such corporation must
deposit a certified copy of the resolution of its Directors or
other governing body authorising the appointment of the
representative at the Company’s registered office: Viking
House, Nelson Street, Douglas, Isle of Man, IM1 2AH not
later than 48 hours before the time appointed for the
holding of the meeting.
51
Webis Holdings plc
Nominated Adviser and Broker
Beaumont Cornish Limited
Building 3, Chiswick Park
566 Chiswick High Road
London
W4 5YA
Legal Advisors
Long & Humphrey
The Old Courthouse
Athol Street
Douglas
Isle of Man
IM1 1LD
UK Registrar
Link 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
Sir James Mellon
Non-Executive Director
Company Secretary
Piotr Schabik
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
IM1 1LA
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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
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