Webis Holdings plc
Global Gaming Group
Annual Report and Consolidated Financial Statements for the year ended 31 May 2022
AIM Stock Code: WEB
Webis Holdings plc
Contents
Our Performance
2
3
6
Group at a Glance
Chairman’s Statement
Group Gaming Licences
Our Governance
7
8
10
14
15
16
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
18
24
25
26
27
28
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
53
56
Notice of Meeting and Proxy Form
Company Information
1
Webis Holdings plc
Group at a Glance
Webis Holdings plc (the “Company”) and its subsidiary
companies (together the “Group”) operates two primary
segments: -
WatchandWager.com Ltd and WatchandWager.com LLC
– Advanced Deposit Wagering (“ADW”)
WatchandWager.com LLC
– Cal Expo Harness Racetrack
WatchandWager.com Ltd is regulated in the Isle of Man
and operates a totalisator wagering hub through its United
States Tote supplier, which enables it to conduct its ADW
business by passing wagers directly into global racetrack
betting pools in real time.
WatchandWager.com LLC has its operational base in
Lexington, Kentucky, with its head office in Larkspur,
California, and provides pari-mutuel 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,
West Virginia 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
interactive website,
through
watchandwager.com, as well as offering a business-to-
business wagering product.
to customers
its
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
The Board is satisfied with the progress of the business over
the year reported. It has been difficult to make comparisons
with prior years with the impact of Covid-19 lock downs
impacting business in various ways for at least the last two
years. The positive factors have been our continued growth
in our B2C sector and our continued good performance at
our racetrack, Cal Expo in Sacramento. Against that we have
seen a decline in our B2B business, which we see as a
mature business model.
On a macro level, we are pleased with a continued licensed
presence across the USA and, of course, our existing
business in California. Shareholders will have noted the “no”
votes on sports betting in California. The bills were badly
constructed on many levels, and as a result now leave us
even better positioned in the State. Sports wagering will
happen in California - the State finance deficit dictates so -
and with our long-term lease at Cal Expo, we are very much
part of the process.
I am also pleased to report that the Board has agreed a clear
business strategy for a minimum of the next two years. This
is largely based upon generating significant growth for our
B2C sector, which we consider an asset, in conjunction with
our increasing licensed presence within the USA. We
consider that focusing on these two areas of growth will
maximise value for shareholders.
In summary, we know that we need to improve our day-to-
day performance (as commented on below) and are
confident that we can achieve that. Finally, I can report we
continue to have the full support of our principal shareholder
to drive the growth strategy forwards in the USA.
Year End Results Review
The Group amounts wagered for the year ended 31 May
2022 were US$ 120.1 million (2021: US$ 132.1 million).
Gross Profit reported was US $ 5.1 million (2021: US$ 5.8
million).
Operating costs were up on last year at US$ 5.6 million
(2021 US$ 5.3 million), primarily from increased race days at
the Cal Expo racetrack, whilst we also managed the
business effectively during the Covid-19 pandemic.
This resulted in a loss on the year of US$ 0.374 million, a
downturn on the 2021 profit of US$ 0.824 million, albeit last
year was an exceptional year.
Shareholder equity stands at US$ 1.3 million (2021: US$ 1.7
million). Total cash stands at US$ 4.1 million (2021: US$ 5.1
million), which includes ring-fenced funds held as protection
against our player liability as required under USA and Isle of
Man gambling legislation.
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 10 to 13 of this report and should be read in
conjunction with my 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
We have been encouraged by the performance of the B2C
business over the period reported. This continues the
positive momentum that we enjoyed in the previous financial
year. Comparisons are very difficult to make against prior
years due to the impact of the COVID-19 pandemic. As
previously reported, this sector performed well last year
during a scenario where live racing continued across the
world but, in many circumstances, customers were not
permitted to visit the tracks. This year, thankfully, saw a
gradual relaxation of the policies around the pandemic,
which was most welcome for the industry as a whole, but
also made trading more competitive.
Given these points, we have analysed our key metrics
versus pre-pandemic levels, and we have shown significant
growth on the website/mobile. Most importantly, overall
handle (amounts wagered) in the period reported from
players on our interactive platforms has increased by 40%
versus the FY ending in May 2019, and 66% versus the FY
ending in May 2018. FY 2020/21 was to an extent a freak
year, for the reasons above, and we saw a small drop off in
handle against last year. This is not wholly surprising looking
at the market overall, but it is vital we keep this positive
momentum going.
3
Webis Holdings plc
Chairman’s Statement continued
Business-to-Consumer continued
We consider our growing B2C business as one of our
principal assets of the company. To that end, our executive
team is currently conducting a detailed strategic review of
this sector, with a view to further invest in software
development, marketing and related resource to grow this
area even faster. This is commented upon further in
Subsequent Events.
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.
Conversely, we consider this model to be a mature business,
albeit one that is still important to the overall Group. Over the
period reported, we saw a decline in handle and in addition
some issues with our key customers’ ability to return a
positive investment on their wagers. This is, of course,
fundamental to the pari-mutuel business model of churn that
we operate. There is no easy solution to this issue. The fact
is that the sector is overly competitive with our main host
global racetracks continuing to request a greater margin from
this type of betting. At the same time, the key high roller
clients are also requesting preferential rates based upon
their volumes. Obviously, this squeezes an operator such as
ourselves.
Cal Expo
We raced between October 2021 and May 2022 during the
period with 45 nights of live racing. Overall, we were pleased
with our performance and this sector continues to show a
consistent level of profitability. The reason for this is we have
achieved unique positioning on the West Coast with our
product. We had good horse level numbers throughout the
season, competitive betting action and good levels of
exposure from the TV channels. This is a recipe for strong
levels of handle throughout the season. In addition, we
continue to benefit from the “dark monies”, namely revenues
accrued whilst we were not racing. As a reminder to
shareholders, we have secured the lease at the property until
2030. We still consider Cal Expo to be a key asset as we
grow our presence in California.
Key risk factors
During the period we have updated our Risk Assessment
procedures and will continue to do so. The Board conducts
regular risk assessments on a micro and macro level.
Licences, Regulatory and Compliance
I am pleased to report that during the period we renewed all
our key licences, and in addition we fully expect all our
licenses subsequent to the period to be approved before the
calendar year end 2022.
In addition, I can report that the Group did not have any
regulatory breaches or complaints from our regulators and
our content providers during the period, and indeed to date.
There were also no AML issues reported to the regulatory
authorities during the period. There were also no Health and
Safety issues over the period. We consider compliance and
social responsibility to be important to the brand and
company.
Subsequent Events (post period reported)
Trading
I am pleased to report that we had a good first quarter of the
new financial year, June-August was overall strong, where
we continued to show good levels of growth in our B2C
sector and also in revenues from Cal Expo. Against that,
B2B business continued to be stagnant.
It should be noted, however, that as anticipated we saw a
slowing in business through September and October, mainly
due to reduced quality of USA content. This is normal
seasonality, however there is no doubt that USA and global
economic factors are becoming a threat to the business and
industry generally.
License Renewals
As reported, we have renewed or are in the process of
renewing all our key licenses in both the Isle of Man and the
USA. Significantly, we extended our Webis license with the
Isle of Man Gambling Supervision Commission in August of
this year. Whilst of course the US is the key generator of
business, we do consider our continued presence in the Isle
of Man as strategically important.
In the USA, as well as our Cal Expo license, and as
previously reported, we renewed our online license with the
California Horseracing Board on 22 November. This is a
vitally important license for reasons given below.
Arizona Downs
Shareholders should be updated on this project. We have
signed a lease agreement with the landlord at the venue in
Prescott Valley, AZ. However, at time of writing we still have
not had our license hearing with the State regulators. This
has been frustrating, but we fully expect to be licensed by the
end of this year, or at worst early in 2023. Based upon that,
we would immediately commence operations as a licensee,
and plan to commence actual live racing in September and
October 2023. We still believe that this project will be
profitable and will assist our other live operations at Cal
Expo. We will keep shareholders fully informed of progress
on this matter.
4
Webis Holdings plc
Chairman’s Statement continued
USA/CA regulated sports betting
As shareholders are aware, on Tuesday 8 November the two
Californian Sports Betting Propositions failed to receive the
number of votes required for them to go into law. Contrary to
some opinions, this was actually a very positive development
for both
for our Californian business. The comments
propositions were seen
thought-out, highly
protective, and in the case of 27, potentially misleading.
Initial indications since the elections show that this subject is
far from dead in California. Simply put, the market for
Californian sports betting is too big for it not to happen.
to be
ill
We much prefer working closely with the State legislature in
Sacramento to devise a State-driven Bill that is fair and
equitable for all interested parties and, most importantly, the
Californian customer. We believe that this can happen in
2023 with a view for live operations in 2024 and will work to
ensure that our assets in California will be included in such a
Bill.
Strategic Outlook
We have now completed a comprehensive strategic review
of our operations and goals for the business through the next
two years, all linked to achieving profitability. We have
identified growing the B2C sector as our principal aim with a
view to at least doubling player numbers within the next two
years. We have developed a detailed software and
marketing plan to that end which has been approved by the
Board with detailed budgets until the end of 2024 which
project this sector and indeed the whole operation to be
profitable.
In conjunction with that, we have several aims to improve our
licensed position in the USA, especially in CA and AZ. We
believe that it is vitally important for growth that we continue
to ensure the highest levels of regulatory compliance as a
company in the USA.
A combination of growth in our core business as detailed
above plus our unique presence in key States will greatly
enhance the valuation of the business. Related to that, we
continue to assess more strategic developments and have
not ruled out alliances, mergers or acquisitions to fast-track
our growth. We will keep shareholders fully up to date on
developments in this area.
Summary
Finally, I would like to thank all our shareholders and
customers for their continued loyalty. In addition, I would like
to thank all our staff and team for their work and commitment
over the year.
Denham Eke
Non-executive Chairman
28 November 2022
5
Webis Holdings plc
Group Gaming Licences
Webis Holdings plc
Isle of Man Gambling Supervision Commission
WatchandWager.com Ltd
Isle of Man Gambling Supervision Commission
WatchandWager.com LLC - Advanced Deposit Wagering
Multi-jurisdictional
California Horse Racing Board
North Dakota Racing Commission
State by State
California Horse Racing Board
Colorado Division of Racing Events
Kentucky Horse Racing Commission
The Maryland Jockey Club
Minnesota Racing Commission
New York State Gaming Commission
North Dakota Racing Commission
Washington Horse Racing Commission
West Virginia Racing Commission
WatchandWager.com LLC - Cal Expo Harness Racing
California Horse Racing Board
6
Webis Holdings plc
The Board of Directors
Denham Eke, aged 71
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 53
Managing Director
the
Tote
Ed Comins has 30+ years’ experience in the
betting and gaming industry with Coral,
Ladbroke Casinos,
and
GameAccount. At the Tote he had overall
responsibility for developing Totepool’s pari-
mutuel business as General Manager of
Tote Direct and Development Director for
Totepool. He was Commercial Director for
GameAccount, a provider of online skill
games, where he managed betting partner
relationships with key sportsbooks.
Ed Comins joined the Board in May 2010.
Richard Roberts, aged 58
Non-executive Director
Richard Roberts has served in executive and
board positions over the past 25 years in the
online gaming and betting industries, leading
US digital operations in iGaming, ADW and
In his current
fantasy sports markets.
position, he
Gaming
Entertainment.
is
the President of Digital
and
for Mohegan Gaming
Richard Roberts joined the Board in April
2021.
Sir James Mellon, aged 93
Non-executive Director
Sir James Mellon is a former British diplomat
whose final post was a Director-General for
Trade and Investment, United States and
Consul-General, New York. He has many
years of corporate experience having been a
chairman or director of numerous public and
private companies.
Sir James Mellon
January 2012.
joined
the Board
in
Katie Errock, aged 35
Non-executive Director
in
experience
Ms Errock, currently Company Secretary for
the Group and its subsidiary companies, has
extensive
compliance,
regulation and corporate governance. She is
an associate of the Chartered Institute for
Securities and Investment and is President
of the Isle of Man chapter. Ms Errock is also
the Company Secretary for a number of
other companies controlled by Burnbrae
Group Limited, an entity wholly owned by
Webis’ principal shareholder, Jim Mellon.
Katie Errock joined the Board in August
2022.
7
Webis Holdings plc
Directors’ Report
The Directors present their annual report and the audited
consolidated financial statements for the year ended 31 May
2022.
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
(2021: 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.
Directors’ interests
Denham Eke 1
Ed Comins
Richard Roberts
Sir James Mellon
The Group seeks to ensure that payments are always made
in accordance with these terms and conditions.
At the year-end there were 23 days (2021: 31 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
Richard Roberts
Non-executive Director
Katie Errock
Non-executive Director (appointed 9
August 2022)
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
2022
Interest at
start of
year
2021
Interest
at end of
year
2022
Interest at
start of
year
2021
—
—
—
—
—
—
—
—
—
—
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 16 and 17.
8
Webis Holdings plc
Directors’ Report continued
Substantial interests
On 27 September 2022, 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$37,892 during the year (2021: US$49,884).
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
recognises
The Group
importance of ensuring
the
employees are kept informed of the Group’s performance,
activities and future plans.
Denham Eke
Non-executive Chairman
28 November 2022
9
Webis Holdings plc
Corporate Governance Statement
Corporate Governance Report
The Board of Webis Holdings plc (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, Kentucky, Minnesota, New York,
West Virginia, Washington, 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
its website,
watchandwager.com, as well as offering a business-to-
business wagering product.
to customers
facilities
through
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 a licensed US-based
sportsbook offering following the US Supreme Court ruling
which paved the way to legalizing wagering on sports in the
United States, subject to individual State legislation. This will
probably be developed in partnership with one or more major
operators and suppliers in the sector. The Group considers
this market to be a significant growth area for our US
operations. Significantly, there are a number of California
draft Sports Betting Bills being currently debated, which
specify that only existing land-based operators in the State
will be eligible for license applications, in our case through
the Cal Expo, Sacramento, CA racetrack facility. 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 the previously mentioned individual State licenses.
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
to meet with
representatives from the Group in a more informal setting.
investors
those
for
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.
10
Webis Holdings plc
Corporate Governance Statement continued
QCA Principle 4: Embed effective risk management,
considering both opportunities and threats, throughout
the organisation
is
for
responsible
the systems of
The Board
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 Group Audit, Risk and
Compliance Committee, the effectiveness of these internal
controls is reviewed annually.
the activities of
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
functioning, balanced team led by the chair
the board as a well-
The Group’s Board currently comprises four 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.
to
their connection
Non-executive Directors, Sir James Mellon and Richard
Roberts, are considered to be independent. The other Non-
executive Directors are not considered to be independent
given
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
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
further development of business
and
opportunities in the US in order to be able to determine the
exact need and requirements.
the Group’s activities
is pending
the
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 pages 16 and
17.
the
The option grant concerned is not deemed to be significant
individual Executive Director. The current
for
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 7.
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 is the responsibility of 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
in
furtherance of his or her duties and responsibilities, normally
via the Company Secretary.
to seek personal advice
for a Director
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.
11
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 culture is encouraged within the Group, with regular
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.
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
framework which enables risk
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
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.
the business. Their key
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
to
constructively challenge and contribute
to strategic
proposals, and to monitor performance, resources, and
standards of conduct, compliance and control, whilst
providing support to executive management in developing
the Group.
responsibilities are
The Board has established a Group Audit, Risk and
Compliance Committee
“Committee”), a
Remuneration Committee and a Nominations Committee
with formally delegated duties and responsibilities. Sir James
Mellon chairs both
the Remuneration
the ARCC and
Committee.
(“ARCC” or
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
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.
the appointment or
the members)
Remuneration Committee
The Remuneration Committee meets at least twice a year
and comprises two Non-executive Directors. It is chaired by
Sir James Mellon and is responsible for determining the
the Company
remuneration of
the management.
Secretary and other members of
Committee members do not
in discussions
concerning their own remuneration.
the Executive Director,
take part
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.
12
Webis Holdings plc
Corporate Governance Statement continued
the assessment of
Appointments to the Board
The principal purpose of the Nomination Committee is to
the balance of skills,
undertake
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.
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
to be alerted when
updated, and users can register
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 28
November 2022 and signed on its behalf by:
Board and committee attendance
The number of formal scheduled Board and committee
meetings held and attended by Directors during the year was
as follows: -
Denham Eke
Non-executive Chairman
28 November 2022
Board Audit Remuneration Nomination
Denham
Eke
Sir
James
Mellon
Ed
Comins
Richard
Roberts
5/5
2/2
2/2
5/5
2/2
2/2
5/5
1/2
5/5
1/2
-
-
-
-
-
-
13
Webis Holdings plc
Audit, Risk and Compliance Committee Report
The Directors have agreed to comply with the provisions of
the Quoted Companies Alliance 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 in relation to its Group Audit, Risk and Compliance
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
financial
experience and the expertise to resource and fulfil its
responsibilities effectively, including those relating to risk and
controls.
relevant
recent
Meetings
The Committee meets two times a year, including the review
of the interim and full year results. Other Directors and
representatives
the external auditors attend by
invitation.
from
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
reviewing significant
issues and
judgements which they contain.
financial reporting
relating
▪ Reviews and challenges
the consistency of
the
information presented within the financial statements,
compliance with stock exchange or other
legal
requirements, 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
on
www.webisholdingsplc.com - the Company’s website.
available
copy
this
of
is
a
▪
2021 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
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.
itself
that
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 external auditor
The Committee has reviewed and discussed together with
management and
the Company’s
financial statements for the year ended 31 May 2022 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.
Denham Eke
Non-executive Chairman
28 November 2022
14
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
law and
in accordance with applicable
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 UK Adopted – International Accounting
Standards post Brexit 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;
• make judgements and estimates that are reasonable,
relevant and reliable;
•
•
•
state whether they have been prepared in accordance
with UK Adopted – International Accounting Standards
post Brexit;
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.
responsible
The Directors are
for keeping adequate
accounting records that are sufficient to show and explain
the 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.
Signed on behalf of the Board.
Denham Eke
Non-executive Chairman
28 November 2022
15
Webis Holdings plc
Report of the Remuneration Committee
Directors’ Remuneration Report
Isle of Man registered company
is no
As an
requirement to produce a Directors’ Remuneration Report.
However, the Board follows best practice and therefore has
prepared such a report.
there
The Directors have agreed to comply with the provisions of
the Quoted Companies Alliance 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 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
the
Executive Director through salary and other benefits.
the reward of
for
Executive Director’s Emoluments
The remuneration for the Executive Director reflects their
to
responsibilities.
participate in an annual bonus scheme when
is
considered appropriate, private healthcare and share option
incentives.
It comprises basic salary, eligibility
this
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
in comparable e-gaming organisations,
responsibilities
Emoluments — salaries, bonuses and taxable benefits
— fees
market conditions generally and
competition in view of the Group’s geographical position.
local employment
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
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.
is not subject
to
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
is
responsible
two Non-
The Remuneration Committee, comprising
executive Directors,
the
remuneration of the Executive Director and is chaired by Sir
James Mellon. Committee members do not take part in
discussions 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.
for setting
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
this Group report. An analysis of Directors’
endorse
emoluments is as follows:
2022
US$000
2021
US$000
345
96
441
366
73
439
16
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
2022
Total
US$000
2021
Total
US$000
320
—
—
—
—
320
—
27
—
21
48
96
—
—
—
—
—
—
—
—
—
—
—
—
25
—
—
—
—
25
345
366
27
—
21
48
26
20
20
7
441
439
Executive
Ed Comins
Non-executive
Denham Eke*
Nigel Caine
Sir James Mellon
Richard Roberts
Aggregate emoluments
* Paid to Burnbrae Limited.
Details of the options outstanding at 31 May 2022 are as follows:
Name of Director
31 May
2021
Granted /
(lapsed) in
year
31 May
2022
Exercise
price
Date
from which
exercisable
Expiry
date
Ed Comins - 2016 Share Option Plan
14,000,000
— 14,000,000
1p 3 March 2019 3 March 2026
14,000,000
— 14,000,000
The market price of the shares at 31 May 2022 was 2.70p. The range during the year was 5.00p to 2.02p.
Approval
The report was approved by the Board of Directors and signed on behalf of the Board.
Denham Eke
Non-executive Chairman
28 November 2022
17
Webis Holdings plc
Independent Auditor’s Report to the Members of Webis Holdings plc
1. Our opinion is unmodified
We have audited the consolidated financial statements of Webis Holdings plc (the “Company”) and its subsidiaries (together, the
"Group"), which comprise the consolidated and Company statement of financial position as at 31 May 2022, the consolidated
statements of profit or loss and other comprehensive income, changes in equity and cash flows for the year then ended, and notes,
comprising significant accounting policies and other explanatory information.
In our opinion, the accompanying consolidated financial statements:
•
•
•
give a true and fair view of the state of the Group's and of the Company's affairs as at 31 May 2022 and of the
Group's loss for the year then ended;
have been properly prepared in accordance with UK Adopted – International Accounting Standards post Brexit; and
have been properly prepared in accordance with the requirements of the Companies Acts 1931 to 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 Company and
Group in accordance with, UK ethical requirements including the FRC Ethical Standard as applied to public interest entities. We
believe that the audit evidence we have obtained is a sufficient and appropriate basis for our opinion.
2. Key audit matters: our assessment of the risks of material misstatement
Key audit matters are those matters that, in our professional judgment, were of most significance in the audit of the consolidated
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 consolidated
financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. In
arriving at our audit opinion above, the other key audit matters were as follows:
18
Webis Holdings plc
Independent Auditor’s Report to the Members of Webis Holdings plc continued
2. Key audit matters: our assessment of the risks of material misstatement continued
The risk
Our response
Revenue recognition (Group key audit
matter)
of
Consolidated
Comprehensive
Income: Revenue
US$53,612,000 (2021: US$55,668,000)
Statement
Refer to note 1.2 (Accounting Policy for
Revenue) and note 2
(Operating
Segments)
Revenue recognition - occurrence
Our audit procedures included:
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 customer facing systems through
to the financial information systems and
that unauthorised changes may be made
to any of these systems, which may result
in the misstatement of revenue.
There is also the risk that revenue is
materially misstated in order to boost the
Group’s earnings position and
future
outlook may be induced by a number of
factors. This may include the Company’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.
the
Considering
factors above we
identified the occurrence of revenue as a
significant risk due to fraud and error.
Outsourcing controls:
• We evaluated the control environment
of
the service organisations by
obtaining and inspecting the latest
System and Organisation Controls
(SOC) reports upon whose system
infrastructure and applications are
relied on by the Group.
• We tested the operating effectiveness
of controls by obtaining and inspecting
SOC
service
from
reports
organisations.
the
• We also
tested
the operating
effectiveness of controls which are
performed at the user entity level.
• We
the
assessed
objectivity,
competence and the nature of work
performed by the Independent Service
Auditor who provides
the SOC
reports.
Tests of details:
• 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 the
third party service organisation’s
system.
• We tested 100 per cent of the other
directly related expenses by tracing
amounts
supplier
invoices.
recorded
to
• We recalculated net gaming revenue
subtracting total payouts and other
directly
from
revenue.
expenses
related
year met
• We have performed cut-off test to
ensure that revenue recorded during
the
for
recognition during the year and that
revenue earned post year end has not
been recorded incorrectly in the year
under audit.
criteria
the
• We inspected post year end journals
for reversals in revenue.
• We compared FX rates used
translating revenue to market rates.
in
19
Webis Holdings plc
Independent Auditor’s Report to the Members of Webis Holdings plc continued
2. Key audit matters: our assessment of the risks of material misstatement continued
The risk
Our response
Going Concern (Group and Company
key audit matter)
Refer to basis of preparation note 1.1
Disclosure quality
The financial statements explain how the
Board has formed a judgement that it is
appropriate to adopt the going concern
basis of preparation for the Group and
Company.
That judgement is based on an evaluation
of the inherent risks to the Group and
Company’s business model and how those
the Group and
risks might affect
Company’s financial resources or ability to
continue operations over a period of at
least a year from the date of approval of
the financial statements.
The risks most likely to adversely affect the
Group and Company’s available financial
resources over this period were:
•
•
the ability to continue to generate
positive cash flows; and
the ability of a related entity to provide
funding to the Group and Company.
There is also less predictable but realistic
second order impact, such as the impact of
Coronavirus, which could result in a rapid
reduction of available financial resources.
The risk for our audit was whether or not
those risks were such that they amounted
to a material uncertainty that may have
cast significant doubt about the ability to
continue as a going concern. Had they
been such, then that fact would have been
required to have been disclosed.
We considered whether these risks could
plausibly affect the liquidity in the going
concern period by assessing the Directors’
sensitivities over
level of available
the
financial resources indicated by the Group
and Company’s financial forecasts taking
account of severe, but plausible, adverse
effects that could arise from these risks
individually and collectively.
Our procedures also included:
dependency
Key
assessment: We
inspected a letter received by the Directors
indicating the related entity’s intention to
provide financial support, held discussions
to assess its ability to provide this support
over
the Group and
Company’s going concern assessment, and
assessed the business reasons why the
related entity may or may not choose to
provide this support.
the period of
assumptions:
Benchmarking
Critically
assessing assumptions in the cash flows
included in the approved budgets based on
our knowledge of the Group and Company
and the sector in which it operates.
the
Historical comparisons: Assessing
reasonableness
by
budgets
of
comparing to actual results and considering
the
previous
forecasts.
accuracy of
historical
the
Considering
analysis:
Sensitivity
sensitivities over
level of available
the
financial resources indicated by the Group
and Company’s financial forecasts taking
into account plausible but not unrealistic
adverse effects that could arise from these
risks individually and collectively.
Evaluating Directors’ intent: We evaluated
the achievability of the actions the Directors
consider they would take to improve the
position should the risks materialise.
Considering
transparency:
Assessing
whether the going concern disclosure in
note 1.1 to the financial statements gives a
full and accurate description of
the
Directors’ assessment of going concern
including the identified risks, dependencies
and related sensitivities.
20
Webis Holdings plc
Independent Auditor’s Report to the Members of Webis Holdings plc continued
3. Our application of materiality and an overview of the scope of our audit
Materiality for the consolidated financial statements as a whole was set at US$42,000, determined with reference to a benchmark
of group net gaming revenue of US$5,049,231, of which it represents approximately 0.9% (2021: 0.9%). Materiality for the
Company financial statements as a whole was set at US$36,000 (2021: US$23,000).
In line with our audit methodology, our procedures on individual account balances and disclosures were performed to a lower
threshold, performance materiality, so as to reduce to an acceptable level the risk that individually immaterial misstatements in
individual account balances add up to a material amount across the financial statements as a whole. Performance materiality for
the Group was set at 75% (2021: 75%) of materiality for the financial statements as a whole, which equates to US$33,000 (2021:
US$39,000) for the Group and US$27,000 (US$17,000) for the Company. We applied this percentage in our determination of
performance materiality because we did not identify any factors indicating an elevated level of risk.
We reported to the Audit Committee any corrected or uncorrected identified misstatements exceeding US$2,200 for the Group and
US$1,800 for the Company, in addition to other identified misstatements that warranted reporting on qualitative grounds.
Our audit of the Group was undertaken to the materiality level specified above, which has informed our identification of significant
risks of material misstatement and the associated audit procedures performed in those areas as detailed above.
The group team performed the audit of the Group as if it was a single aggregated set of financial information. The audit was
performed using the materiality level set out above and covered 100% of total group revenue, total group loss before tax, and total
group assets and liabilities.
4. Going concern
The Directors have prepared the consolidated financial statements on the going concern basis as they do not intend to liquidate the
Group or the Company or to cease their operations, and as they have concluded that the Group and the Company's financial
position means that this is realistic. They have also concluded that there are no material uncertainties that could have cast
significant doubt over their ability to continue as a going concern for at least a year from the date of approval of the consolidated
financial statements (the “going concern period").
An explanation of how we evaluated management’s assessment of going concern is set out in the related key audit matter in the
key audit matters section of this report.
Our conclusions based on this work:
• we consider that the Directors' use of the going concern basis of accounting in the preparation of the consolidated
financial statements is appropriate;
• we have not identified, and concur with the Directors' assessment that there is not, a material uncertainty related to events
or conditions that, individually or collectively, may cast significant doubt on the Group and the Company's ability to
continue as a going concern for the going concern period; and
• we found the going concern disclosure in the notes to the consolidated financial statements to be acceptable.
However, as we cannot predict all future events or conditions and as subsequent events may result in outcomes that are
inconsistent with judgements that were reasonable at the time they were made, the above conclusions are not a guarantee that the
Group and the Company will continue in operation.
5. Fraud and breaches of laws and regulations – ability to detect
Identifying and responding to risks of material misstatement due to fraud
To identify risks of material misstatement due to fraud (“fraud risks”) we assessed events or conditions that could indicate an
incentive or pressure to commit fraud or provide an opportunity to commit fraud. Our risk assessment procedures included:
•
•
•
enquiring of management as to the Group and Company’s policies and procedures to prevent and detect fraud as well as
enquiring whether management have knowledge of any actual, suspected or alleged fraud;
reading minutes of meetings of those charged with governance; and
using analytical procedures to identify any unusual or unexpected relationships.
21
Webis Holdings plc
Independent Auditor’s Report to the Members of Webis Holdings plc continued
5. Fraud and breaches of laws and regulations – ability to detect continued
Identifying and responding to risks of material misstatement due to fraud continued
As required by auditing standards, we perform procedures to address the risk of management override of controls, in particular the
risk that management may be in a position to make inappropriate accounting entries. On this audit we do not believe there is a
fraud risk related to revenue recognition because the Group and Company’s revenue streams are simple in nature with respect to
accounting policy choice and are easily verifiable to external data sources or agreements with little or no requirement for estimation
from management. We did not identify any additional fraud risks.
We performed procedures including:
•
•
identifying journal entries and other adjustments to test based on risk criteria and comparing any identified entries to
supporting documentation; and
incorporating an element of unpredictability in our audit procedures.
Identifying and responding to risks of material misstatement due to non-compliance with laws and regulations
We identified areas of laws and regulations that could reasonably be expected to have a material effect on the consolidated
financial statements from our sector experience and through discussion with management (as required by auditing standards), and
from inspection of the Group’s regulatory and legal correspondence, if any, and discussed with management the policies and
procedures regarding compliance with laws and regulations. As the Group is regulated, our assessment of risks involved gaining an
understanding of the control environment including the entity’s procedures for complying with regulatory requirements.
The Group is subject to laws and regulations that directly affect the consolidated financial statements including financial reporting
legislation and taxation legislation and we assessed the extent of compliance with these laws and regulations as part of our
procedures on the related financial statement items.
The Group is subject to other laws and regulations where the consequences of non-compliance could have a material effect on
amounts or disclosures in the consolidated financial statements, for instance through the imposition of fines or litigation or impacts
on the Group and the Company’s ability to operate. We identified financial services regulation as being the area most likely to have
such an effect, recognising the regulated nature of the Group’s activities and its legal form. Auditing standards limit the required
audit procedures to identify non-compliance with these laws and regulations to enquiry of management and inspection of regulatory
and legal correspondence, if any. Therefore, if a breach of operational regulations is not disclosed to us or evident from relevant
correspondence, an audit will not detect that breach.
Context of the ability of the audit to detect fraud or breaches of law or regulation
Owing to the inherent limitations of an audit, there is an unavoidable risk that we may not have detected some material
misstatements in the consolidated financial statements, even though we have properly planned and performed our audit in
accordance with auditing standards. For example, the further removed non-compliance with laws and regulations is from the events
and transactions reflected in the consolidated financial statements, the less likely the inherently limited procedures required by
auditing standards would identify it.
In addition, as with any audit, there remains a higher risk of non-detection of fraud, as this may involve collusion, forgery, intentional
omissions, misrepresentations, or the override of internal controls. Our audit procedures are designed to detect material
misstatement. We are not responsible for preventing non-compliance or fraud and cannot be expected to detect non-compliance
with all laws and regulations.
6. Other information
The Directors are responsible for the other information, which comprises the strategic report, the Directors’ report and the ither
information included in the annual report but does not include the consolidated financial statements and our auditor's report
thereon. Our opinion on the consolidated 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 the other information is materially inconsistent
with the consolidated financial statements or our knowledge obtained in the audit, or otherwise appears to be materially
misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we
are required to report that fact. We have nothing to report in this regard.
22
Webis Holdings plc
Independent Auditor’s Report to the Members of Webis Holdings plc continued
7. Matters on which we are required to report by exception
Under the Companies Acts 1931 to 2004, we are required to report to you if, in our opinion:
•
adequate accounting records have not been kept, 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.
8. Respective responsibilities
Directors' responsibilities
As explained more fully in their statement set out on page 15, the Directors are responsible for: the preparation of the consolidated
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 consolidated financial statements that are free from material misstatement, whether due to
fraud or error; assessing the Group and 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 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 consolidated 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 consolidated financial
statements.
A fuller description of our responsibilities is provided on the FRC’s website at www.frc.org.uk/auditorsresponsibilities.
9. 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 its members, as a body, for our audit work, for this report, or for the opinions we have formed.
Russell Kelly
For and on behalf of KPMG Audit LLC
Chartered Accountants
Isle of Man
28 November 2022
23
Webis Holdings plc
Consolidated Statement of Comprehensive Income
For the year ended 31 May 2022
Amounts wagered
Revenue
Cost of sales
Betting duty paid
Gross profit
Operating costs
Loss allowance on trade receivables
Other gains
Government grant
Other income
Operating (loss) / profit
Finance costs
(Loss) / profit before income tax
Income tax expense
(Loss) / profit for the year
Total comprehensive (loss) / profit for the year
Basic earnings per share for (loss) / profit attributable to the equity holders of the
Company during the year (cents)
Diluted earnings per share for (loss) / profit attributable to the equity holders of the
Company during the year (cents)
The notes on pages 28 to 52 form part of these financial statements.
Note
2022
US$000
2021
US$000
120,140
132,149
1.2
1.2
21
15
3
4
6
7
7
53,612
55,668
(48,462)
(49,757)
(101)
(114)
5,049
5,797
(5,604)
(5,314)
11
20
(48)
324
(248)
(126)
(374)
—
(374)
(374)
7
2
272
185
949
(125)
824
—
824
824
(0.10)
0.21
(0.09)
0.20
24
Webis Holdings plc
Statements of Financial Position
As at 31 May 2022
Note
31.05.22
Group
US$000
31.05.22
Company
US$000
31.05.21
Group
US$000
31.05.21
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
Cash, cash equivalents and restricted cash
Trade and other receivables
Total current assets
Total assets
Equity
Called up share capital
Share option reserve
Retained losses
Total equity
Current liabilities
Trade and other payables
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
12
13
17
17
14
16
16
11
724
—
100
835
883
4,139
1,190
6,212
7,047
6,334
42
—
3
3
—
6
—
1,266
821
2,087
2,093
12
380
—
101
493
882
5,083
1,896
7,861
8,354
—
6
3
—
9
—
2,142
150
2,292
2,301
6,334
6,334
6,334
42
42
42
(5,058)
(5,711)
(4,684)
(5,516)
1,318
665
1,692
860
3,640
109
3,749
1,980
1,980
5,729
7,047
78
—
78
1,350
1,350
1,428
2,093
4,995
572
5,567
1,095
1,095
6,662
8,354
91
500
591
850
850
1,441
2,301
The notes on pages 28 to 52 form part of these financial statements.
The financial statements were approved by the Board of Directors on 28 November 2022.
Denham Eke
Non-executive Chairman
25
Webis Holdings plc
Statements of Changes in Equity
For the year ended 31 May 2022
Group
Called up
share capital
US$000
Share option
reserve
US$000
Retained
earnings
US$000
Total
equity
US$000
Balance as at 31 May 2020
6,334
42
(5,508)
868
Total comprehensive loss for the year:
Profit for the year
Balance as at 31 May 2021
Total comprehensive profit for the year:
Loss for the year
Balance as at 31 May 2022
—
6,334
—
6,334
—
42
—
42
824
(4,684)
(374)
(5,058)
824
1,692
(374)
1,318
Company
Called up
share capital
US$000
Share option
reserve
US$000
Retained
earnings
US$000
Total
equity
US$000
Balance as at 31 May 2020
6,334
42
(5,526)
850
Total comprehensive loss for the year:
Profit for the year
Balance as at 31 May 2021
Total comprehensive profit for the year:
Loss for the year
Balance as at 31 May 2022
—
6,334
—
6,334
—
42
—
42
10
(5,516)
(195)
(5,711)
10
860
(195)
665
The notes on pages 28 to 52 form part of these financial statements.
26
Webis Holdings plc
Consolidated Statement of Cash Flows
For the year ended 31 May 2022
Cash flows from operating activities
(Loss) / profit before income tax
Adjustments for:
- Depreciation of property, equipment and motor vehicles
- Amortisation of intangible assets
- Rent concessions received
- Loan interest paid
- Re-recognition of PPP loan
- Government grant utilised
- Decrease / (increase) in movement of restricted cash*
- Increase in lease liabilities
- Other foreign exchange movements
Changes in working capital:
- Decrease / (increase) in receivables
- (Decrease) / increase in payables
Net cash (used in) / generated from 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
Loan interest paid
Payment of lease liabilities - principal
Payment of lease liabilities - interest
Rent concessions received
Repayment of loans and borrowings
Net cash used in financing activities
Net (decrease) / increase in cash and cash equivalents
Cash and cash equivalents at beginning of year
Exchange gains / (losses) on cash and cash equivalents
Cash and cash equivalents at end of year
The notes on pages 28 to 52 form part of these financial statements.
Note
2022
US$000
2021
US$000
(374)
824
9
8
19
15
8
9
19
19
19
16
128
7
(2)
101
48
—
768
25
(66)
706
(1,355)
(14)
(6)
—
(6)
119
26
(5)
101
—
(272)
(375)
24
222
(640)
1,246
1,270
(8)
(84)
(92)
(101)
(101)
(92)
(25)
2
(6)
(222)
(242)
3,238
66
(92)
(24)
5
(5)
(217)
961
2,499
(222)
12
3,062
3,238
*Decrease / (increase) in movement of restricted cash, has been reclassified to Operating activities from Cash and cash
equivalents. The reclassification has been made to achieve better presentation, as the restricted cash relates to player liabilities,
which is part of the operating activity of the Group. The impact of this reclassification on net cash (used in) / generated from
operating activities is a decrease of USD 375k on the total as previously reported of USD 1,645k.
27
Webis Holdings plc
Notes to the Financial Statements
For the year ended 31 May 2022
1 Reporting entity
Webis Holdings plc (the “Company”) 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 2022 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 UK Adopted – International Accounting
Standards post Brexit.
The Group has consistently applied the accounting policies as set out in note 1.2 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 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 UK Adopted – International Accounting Standards post
Brexit 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 estimate area to be as follows:
• 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 incurred a net loss in the current year of US$374,000
(2021: profit of US$824,000) and due to that, net assets reduced from US$1,692,000 to US$1,318,000.
2020/21 results benefitted from the horseracing industry continuing to operate during the lockdown period of the Covid
pandemic in 2020, which allowed the industry to attract higher player numbers and wagering volumes, which resulted in
improved performance and increased Group profitability during that financial year. While there has been an expected reduction
in retail customer numbers as other sports and wagering opportunities opened again, overall, there has still been an
improvement in net results when compared to years prior to 2020/21. 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 Group has maintained sufficient operational cash to allow it to continue to meet its liabilities for the foreseeable future.
28
Webis Holdings plc
Notes to the Financial Statements continued
1.1 Basis of preparation continued
Going concern continued
In order to help achieve and maintain its goal of profitability and maintaining adequate liquidity in order to continue its operations
the Directors are continuing to pursue 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 have, in previous years, received financial support from Galloway Limited (related entity) and
Galloway Limited has expressed its willingness to continue to make funds available as and when needed by the Group and
Company. The loans from Galloway Limited stand at US$1,350,000 as at 31 May 2022.
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.
Based on these indications, (namely cashflow projections and commitment of support from the related entity), along with the
current cash position, the Directors believe that it remains appropriate to prepare the financial statements on a going concern
basis.
1.2 Summary of 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 2021. No adoptions had a material effect on the accounting policies of the Group.
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.
29
Webis Holdings plc
Notes to the Financial Statements continued
1.2 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’). As the primary activities of the Group and the
primary transactional currency of the Group’s customers are carried out in US Dollars, the consolidated financial statements
have been presented in US Dollars. The determination of the presentation currency does not involve significant judgement as
the primary activities of the Group are in US Dollars.
(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. Where the
Group acts as a principal, the entire wager is recognised as revenue and where it is an agent the wagering commission the
Group retains is recognised as revenue.
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.
Cost of sales
The Group recognises cost of sales related to the Racetrack operations in which it is the race host. The cost of sales includes
direct costs such as purses, hub fees, import fees, pay-outs, and other statutory distributions.
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.
30
Webis Holdings plc
Notes to the Financial Statements continued
1.2 Summary of significant accounting policies continued
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.
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. Renewal costs are expensed in the year they relate to.
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.
31
Webis Holdings plc
Notes to the Financial Statements continued
1.2 Summary of significant accounting policies continued
Intangible assets — other continued
(b) Website design and development costs
Costs associated with maintaining websites are recognised as an expense as incurred. Development costs that are directly
attributable to the design and testing of identifiable and unique websites controlled by the Group are recognised as intangible
assets when the following criteria are met:
• it is technically feasible to complete the website so that it will be available for use;
• management intends to complete the website and use it;
• there is an ability to use the website;
• it can be demonstrated how the website will generate probable future economic benefits;
• adequate technical, financial and other resources to complete the development and to use the website are available; and
• the expenditure attributable to the website during its development can be reliably measured.
Directly attributable costs that are capitalised as part of the website include the website employee costs and an appropriate
portion of relevant overheads.
Other development expenditures that do not meet these criteria are recognised as an expense as incurred. Development costs
previously recognised as an expense are not recognised as an asset in a subsequent period.
Website development costs recognised as assets are amortised over their estimated useful lives, which do not exceed three
years.
Property, equipment and motor vehicles
Items of property, equipment and motor vehicles are stated at historical cost less accumulated depreciation (see below) and
impairment losses. Historical cost includes expenditure that is directly attributable to the acquisition of the items.
Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only when it is
probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured
reliably. The carrying amount of the replaced part is derecognised. All other repairs and maintenance are charged to the income
statement during the financial period in which they are incurred.
The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at the financial position date. An asset’s
carrying amount is written down immediately to its recoverable amount if the asset’s carrying amount is greater than its
estimated recoverable amount. Depreciation is calculated using the straight-line method to allocate the cost of property,
equipment and motor vehicles over their estimated useful lives.
The estimated useful lives of property, equipment and motor vehicles for current and comparative periods are as follows:
Plant and equipment
3 years
Motor vehicles
3 years Fixtures and fittings
5 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.
32
Webis Holdings plc
Notes to the Financial Statements continued
1.2 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 share capital.
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.
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’). Any financial asset that had been outstanding for greater than 90 days would be
assessed on an individual basis to determine if it qualified as a significant increase in credit risk. 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.
33
Webis Holdings plc
Notes to the Financial Statements continued
1.2 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.
Leases
At inception of a contract, the Group assesses whether a contract is, or contains, a lease. A contract is, or contains, a lease if
the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration.
i. As a lessee
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.
The Group receives rent concessions on its racetrack lease when, due to external factors, the number of days raced in a
season is lower than the actual number of days scheduled to be raced.
The Group determines its incremental borrowing rate by obtaining interest rates from various external financing sources and
makes certain adjustments to reflect the terms of the lease and the type of the asset leased.
Lease payments included in the measurement of the lease liability comprise the following:
- Fixed payments, including in-substance fixed payments;
34
Webis Holdings plc
Notes to the Financial Statements continued
1.2 Summary of significant accounting policies continued
Leases continued
i. As a lessee continued
- Variable lease payments that depend on an index or a rate, initially measured using the index or rate as at the
commencement date;
- Amounts expected to be payable under a residual value guarantee; and
- The exercise price under a purchase option that the Group is reasonably certain to exercise, lease payments in an optional
renewal period if the Group is reasonably certain to exercise an extension option, and penalties for early termination of a lease
unless the Group is reasonably certain not to terminate early.
The lease liability is measured at amortised cost using the effective interest method. It is remeasured when there is a change in
future lease payments arising from a change in an index or rate, if there is a change in the Group’s estimate of the amount
expected to be payable under a residual value guarantee, if the Group changes its assessment of whether it will exercise a
purchase, extension or termination option or if there is a revised in-substance fixed lease payment.
When the lease liability is remeasured in this way, a corresponding adjustment is made to the carrying amount of the right-of-
use asset or is recorded in profit or loss if the carrying amount of the right-of-use asset has been reduced to zero.
The Group presents right-of-use assets that do not meet the definition of investment property in ‘property, equipment and motor
vehicles’ and lease liabilities in ‘loans, borrowings and lease liabilities’ in the statement of financial position.
Short-term leases and leases of low-value assets
The Group has elected not to 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.
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. Any recognised liability
would be settled within 12 months of the year end.
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. The Directors do not expect the adoption of the standards and
interpretations to have a material impact on the Group’s financial statements in the period of initial application.
Standards
Onerous Contracts – Cost of Fulfilling a Contract (Amendments to IAS 37)
2022 Annual Improvements to IFRS Standards 2018 – 2020
Property, Plant and Equipment: Proceeds before Intended Use (Amendments to IAS 16)
Reference to the Conceptual Framework (Amendments to IFRS 3)
IFRS 17 Insurance Contracts
Classification of liabilities as current or non-current (Amendments to IAS 1)
Amendments to IFRS 17
Disclosure of Accounting Policies (Amendments to IAS1 and IFRS Practice Statement 2)
Definition of Accounting Estimate (Amendments to IFRS 8)
Deferred Tax related Asset and Liabilities Arising from a Single Transaction – Amendments to IAS
12 Income Taxes
Sale or Contribution of Assets between an Investor and its Associate or Joint Ventures
(Amendments to FRS 10 and IAS 28)
Effective date
(accounting periods
commencing on or
after)
1 January 2022
1 January 2023
35
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 movement on trade receivables
Segment assets
Segment liabilities
External revenues
Segment revenue
Segment profit before tax
Interest expense
Depreciation and amortisation
Other material non-cash items:
-
Impairment movement on trade receivables
Segment assets
Segment liabilities
Reportable segments
Racetrack
2022
US$000
51,225
51,225
259
(22)
(88)
–
2,324
1,522
Corporate
operating
costs
2022
US$000
ADW
2022
US$000
2,387
2,387
(438)
(6)
(44)
11
3,387
2,779
–
–
(195)
(98)
(3)
–
1,336
1,428
Reportable segments
Racetrack
2021
US$000
52,640
52,640
390
(23)
(79)
–
2,138
1,409
Corporate
operating
costs
2021
US$000
ADW
2021
US$000
3,028
3,028
424
(4)
(66)
7
3,915
3,812
–
–
10
(98)
–
–
2,301
1,441
Total
2022
US$000
53,612
53,612
(374)
(126)
(135)
11
7,047
5,729
Total
2021
US$000
55,668
55,668
824
(125)
(145)
7
8,354
6,662
36
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) / profit before tax
Total (loss) / profit before tax for reportable segments
(Loss) / profit before tax for other segments
Consolidated (loss) / profit 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 movement on trade receivables
2022
US$000
2021
US$000
53,612
53,612
55,668
55,668
(179)
(195)
(374)
5,711
1,336
7,047
4,301
1,428
5,729
(126)
(135)
11
814
10
824
6,053
2,301
8,354
5,221
1,441
6,662
(125)
(145)
7
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
2022
US$000
2021
US$000
North America
51,225
52,640
North America
1,833
2,294
British Isles
Caribbean
527
27
734
–
53,612
55,668
37
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 the Group’s assets.
United States of America
Isle of Man
Non-current assets exclude financial instruments.
3 Operating (loss) / profit
Operating (loss) / profit is stated after charging:
Auditors’ remuneration — audit
Depreciation of property, equipment and motor vehicles
Amortisation of intangible assets
Exchange losses / (gains)
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
2022
US$000
2021
US$000
731
4
735
386
6
392
2022
US$000
2021
US$000
153
128
7
7
96
136
119
26
(2)
73
2022
US$000
2021
US$000
(126)
(126)
(125)
(125)
2022
2021
52
52
2022
US$000
2021
US$000
1,707
127
1,834
1,676
116
1,792
38
Webis Holdings plc
Notes to the Financial Statements continued
6
Income tax expense
(a) Current and Deferred Tax Expenses
The current and deferred tax expenses for the year were US$Nil (2021: 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) / profit before tax
Tax charge at IOM standard rate (0%)
Adjusted for:
Tax credit for US tax (losses) gains (at 21%)
Add back deferred tax losses / (gains) not recognised
Tax charge for the year
2022
US$000
2021
US$000
(374)
–
(91)
91
–
824
–
118
(118)
–
The maximum deferred tax asset that could be recognised at year end is approximately US$985,000 (2021: US$894,000). The
Group has not recognised any asset as it might not be recoverable within the allowed period.
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
profit per share, as the effect would have been anti-dilutive.
(Loss) / profit 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)
2022
US$000
(374)
No.
2021
US$000
824
No.
393,338,310
393,338,310
14,000,000
14,000,000
407,338,310
407,338,310
(0.10)
(0.09)
0.21
0.20
The earnings applied are the same for both basic and diluted earnings calculations per share as there are no dilutive effects to
be applied.
39
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 2020
Additions during the year
Balance at 31 May 2021
Balance at 1 June 2021
Additions during the year
Balance at 31 May 2022
Amortisation and Impairment
Balance at 1 June 2020
Amortisation for the year
Balance at 31 May 2021
Balance at 1 June 2021
Amortisation for the year
Balance at 31 May 2022
Carrying amounts
At 1 June 2020
At 31 May 2021
At 31 May 2022
177
–
177
177
–
177
177
–
177
177
–
177
–
–
–
598
8
606
606
6
612
568
26
594
594
7
601
30
12
11
15
–
15
15
–
15
15
–
15
15
–
15
–
–
–
775
8
783
783
6
789
745
26
771
771
7
778
30
12
11
15
–
15
15
–
15
15
–
15
15
–
15
–
–
–
The Group reviews intangible assets annually for impairment or more frequently if there are indications that the intangible
assets may be impaired (see note 1).
.
40
Webis Holdings plc
Notes to the Financial Statements continued
9 Property, equipment and motor vehicles
Group
Cost
Balance at 1 June 2020
Additions during the year
Balance at 31 May 2021
Balance at 1 June 2021
Additions during the year
Balance at 31 May 2022
Depreciation
Balance at 1 June 2020
Charge for the year
Balance at 31 May 2021
Balance at 1 June 2021
Charge for the year
Balance at 31 May 2022
Carrying amounts
At 1 June 2020
At 31 May 2021
At 31 May 2022
Company
Cost
Balance at 1 June 2020
Additions during the year
Balance at 31 May 2021
Balance at 1 June 2021
Additions during the year
Balance at 31 May 2022
Computer
Equipment
US$000
Fixtures,
Fittings &
Track
Equipment
US$000
Motor
Vehicles
US$000
Right-of-
use Assets
US$000
Total
US$000
162
4
166
166
–
166
155
5
160
160
3
163
7
6
3
241
80
321
321
–
321
241
9
250
250
18
268
–
71
53
50
–
50
50
–
50
17
7
24
24
7
31
33
26
19
473
–
926
84
473
1,010
473
1,010
472
945
472
1,482
98
98
196
196
100
296
375
277
649
511
119
630
630
128
758
415
380
724
Computer
Equipment
US$000
Fixtures &
Fittings
US$000
Total
US$000
33
4
37
37
–
37
80
–
80
80
–
80
113
4
117
117
–
117
41
Webis Holdings plc
Notes to the Financial Statements continued
9 Property, equipment and motor vehicles continued
Company
Depreciation
Balance at 1 June 2020
Charge for the year
Balance at 31 May 2021
Balance at 1 June 2021
Charge for the year
Balance at 31 May 2022
Carrying amounts
At 1 June 2020
At 31 May 2021
At 31 May 2022
10 Investments
Computer
Equipment
US$000
Fixtures &
Fittings
US$000
Total
US$000
26
5
31
31
3
34
7
6
3
80
–
80
80
–
80
–
–
–
106
5
111
111
3
114
7
6
3
Investments in subsidiaries are held at cost. Details of investments at 31 May 2022 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
Isle of Man
Dormant
Dormant
100
100
100
100
Technical Facilities & Services Limited was dissolved after the year end. A wholly owned subsidiary, B. E. Global Services Ltd
was dissolved in May 2022.
11 Bonds and deposits
Group
Company
2022
US$000
2021
US$000
2022
US$000
2021
US$000
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
883
–
100
983
882
–
101
983
–
–
–
–
–
–
–
–
42
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 (2021:
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 8 years (2021: 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$8,227 (2021: US$8,315). These deposits are repayable upon completion of the relevant lease term, under the terms
of legally binding agreements. The fair value of the bonds and deposits approximates to the carrying value.
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
2022
US$000
2021
US$000
2022
US$000
2021
US$000
3,062
1,077
4,139
3,238
1,845
5,083
189
1,077
312
1,830
1,266
2,142
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
2022
US$000
2021
US$000
2022
US$000
2021
US$000
395
–
795
907
–
989
1,190
1,896
–
757
64
821
–
98
52
150
Included within trade receivables are impairment provisions of US$67,293 (see note 21), (2021: US$78,002).
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
2022
US$000
2021
US$000
2022
US$000
2021
US$000
659
2,037
16
928
3,640
686
2,968
15
1,326
4,995
7
–
2
69
78
33
–
2
56
91
43
Webis Holdings plc
Notes to the Financial Statements continued
15 Deferred income (Government Grant)
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 allowed 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 had ascertained reasonable assurance that the loan should be forgiven in its entirety
and the application for forgiveness was submitted in June 2021, with the application agreed by the lending bank. The grant was
recognised in profit or loss in the periods that the relevant expenses were recognised. After final review by the Small Business
Administration, it was determined that the lending bank had calculated and advanced a loan amount greater than it should
have. The resultant difference of US$48,427 is a recognised as a loan (financial liability) at year end (see note 16).
16 Loans, borrowings and lease liabilities
Current liabilities
Unsecured loans (current portion)
Lease liabilities (current portion)
Secured loans – Galloway Limited
Non-current liabilities
Unsecured loans (non-current portion)
Lease liabilities (non-current portion)
Secured loans – Galloway Limited
Terms and repayment schedule
Unsecured loans
Lease liabilities
Secured loan – Galloway Limited*
Secured loan – Galloway Limited*
Secured loan – Galloway Limited*
Total loans and borrowings
Group
Company
2022
US$000
2021
US$000
2022
US$000
2021
US$000
20
89
–
109
6
66
500
572
–
–
–
–
–
–
500
500
Group
Company
2022
US$000
2021
US$000
2022
US$000
2021
US$000
47
583
1,350
1,980
19
226
850
1,095
–
–
1,350
1,350
–
–
850
850
Nominal
interest rate
Year of
maturity
1.00-8.90%
2025
6.00-9.50%
2023-30
7.75%
7.00%
7.00%
2027
2024
2025
2022
Total
US$000
2021
Total
US$000
67
672
500
350
500
25
292
500
350
500
2,089
1,667
The Group received an unsecured Paycheck Protection Program (“PPP”) loan for US$48,427, which matures on 7 May 2025
and attracts interest at 1% per annum (see note 15).
The secured loans from Galloway Limited are secured over the unencumbered assets of the Group.
*Based on current interest rates, the estimated fair value of the Galloway Limited loans is US$1.315m.
44
Webis Holdings plc
Notes to the Financial Statements continued
16 Loans, borrowings and lease liabilities continued
Reconciliation of movements of liabilities to cash flows arising from financing activities
Balance at 1 June 2020
Changes from financing cash flows
Proceeds from loans, borrowings and lease liabilities
Repayment of borrowings
Payment of lease liabilities
Interest paid
Total changes from financing cash flows
Other changes
Liability-related
Rent concession received
Interest expense
Total liability-related other changes
Balance at 31 May 2021
Other loans and
borrowings
US$000
Lease liabilities
US$000
Total
US$000
1,380
384
1,764
–
(5)
–
(101)
(106)
–
101
101
1,375
24
–
(111)
(24)
(111)
(5)
24
19
292
24
(5)
(111)
(125)
(217)
(5)
125
120
1,667
Balance at 1 June 2021
1,375
292
1,667
Changes from financing cash flows
Proceeds from loans, borrowings and lease liabilities
Repayment of borrowings
Payment of lease liabilities
Interest paid
Total changes from financing cash flows
Other changes
Liability-related
New leases
Rent concession received
Interest expense
Total liability-related other changes
Balance at 31 May 2022
48
(6)
–
(101)
(59)
–
–
101
101
1,417
25
–
(115)
(25)
(115)
472
(2)
25
495
672
73
(6)
(115)
(126)
(174)
472
(2)
126
596
2,089
45
Webis Holdings plc
Notes to the Financial Statements continued
17 Share capital
No.
2022
US$000
2021
US$000
Allotted, issued and fully paid
At beginning and close of year: ordinary shares of 1p each
393,338,310
6,334
6,334
At 31 May: ordinary shares of 1p each
393,338,310
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 (2021:
US$9,619,000 divided into 600,000,000 ordinary shares of £0.01 each).
Options
Movements in share options during the year ended 31 May 2022 were as follows:
At 31 May 2021 – 1p ordinary shares
Options granted
Options lapsed
Options exercised
At 31 May 2022 – 1p ordinary shares
No.
14,000,000
–
–
–
14,000,000
During 2016 the Group established an equity-settled share-based option program. The fair value of options granted is
recognised as an expense, with a corresponding increase in equity. The fair value is measured at grant date using a Black-
Scholes model and is spread over the vesting period. The amount recognised in equity is adjusted to reflect the actual number
of share options which are expected to vest. By taking into consideration the volatility of the shares over the 3 years prior to
granting, the volatility of the options is calculated at 75%, with a risk-free interest rate of 0.86%.
The options were issued on 3 March 2016 to Ed Comins, Managing Director of the Group. The fair value of each option on the
grant date was estimated as being £0.0022. The share options vested on 3 March 2019 after Ed Comins had remained in the
employment of the Group for 3 years from when the options were granted. The options are able to be exercised from 3 March
2019 and expire on 2 March 2026. The weighted average exercise price of all options is £0.01.
The charge for share options recorded in profit and loss for the year was US$Nil (2021: US$Nil). Since the grant date, the total
charge in relation to the share options was US$42,126.
18 Capital commitments
As at 31 May 2022, the Group had no capital commitments (2021: US$Nil).
19 Leases
A. Leases as lessee
The Group leases office and racetrack facilities. The office facility is leased until May 2023, with an average length of renewal
of between two to three years. The racetrack facility is leased until May 2030, with extensions or renewals typically ranging
between three to five years.
The Group also leases additional office facilities with contract terms of no more than one year. These leases are short-term and
the Group has elected not to recognise right-of-use assets and lease liabilities for these leases.
Information about leases for which the Group is a lessee is presented below.
i. Right-of-use assets
Right-of-use assets related to leased properties that do not meet the definition of investment property are presented within
property, equipment and motor vehicles.
46
Webis Holdings plc
Notes to the Financial Statements continued
19 Leases continued
A. Leases as lessee continued
i. Right of use assets continued
Group
Cost
Balance at 1 June 2020
Additions during the year
Balance at 31 May 2021
Balance at 1 June 2021
Additions during the year
Balance at 31 May 2022
Depreciation
Balance at 1 June 2020
Charge for the year
Balance at 31 May 2021
Balance at 1 June 2021
Charge for the year
Balance at 31 May 2022
Carrying amounts
At 1 June 2020
At 31 May 2021
At 31 May 2022
ii. Amounts recognised in profit or loss
Interest on lease liabilities
Depreciation expense
Rent concessions received
Expenses relating to short-term leases
iii. Amounts recognised in statement of cash flows
Payment of lease liabilities - principal
Payment of lease liabilities - interest
Rent concessions received
Property
US$000
Total
US$000
473
–
473
473
472
945
98
98
196
196
100
296
375
277
649
473
–
473
473
472
945
98
98
196
196
100
296
375
277
649
2022
US$000
2021
US$000
25
100
(2)
71
24
98
(5)
69
2022
US$000
2021
US$000
(92)
(25)
2
(92)
(24)
5
47
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$46,914 (2021: US$45,652) and Directors’ fees of US$27,193 (2021: US$26,461) 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 (2021: US$1,350,000) from Galloway Limited, a company related to Burnbrae Limited by common ownership
and Directors (note 16).
Transactions with key management personnel
The total amounts for Directors’ remuneration were as follows:
Emoluments — salaries, bonuses and taxable benefits
— fees
2022
US$000
2021
US$000
345
96
441
366
73
439
Directors’ Emoluments
Executive
Ed Comins
Non-executive
Denham Eke*
Nigel Caine
Sir James Mellon
Richard Roberts
Aggregate emoluments
* Paid to Burnbrae Limited.
Basic
salary
US$000
Fees
US$000
Bonus
US$000
Termination
payments
US$000
Benefits
US$000
2022
Total
US$000
2021
Total
US$000
320
—
—
—
—
320
—
27
—
21
48
96
—
—
—
—
—
—
—
—
—
—
—
—
25
—
—
—
—
25
345
366
27
—
21
48
26
20
20
7
441
439
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
2022
US$000
2021
US$000
3,062
3,238
(1,417)
(1,375)
1,645
1,863
(1,318)
(1,692)
327
171
48
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 maintain sufficient cash flow in the
forthcoming period, to meet its immediate financial obligations.
The following are the contractual maturities of financial liabilities:
2022
Financial liabilities
Carrying
amount
US$000
Contractual
cash flow
US$000
6 months
or less
US$000
Up to
1 year
US$000
1–5
years
US$000
5+
years
US$000
Trade payables
(659)
(659)
(659)
Amounts due to customers
(2,037)
(2,037)
(2,037)
Other payables and loans
Lease liabilities
(1,899)
(2,214)
(673)
(952)
(541)
(26)
–
–
–
–
(58)
(1,615)
–
–
–
(121)
(460)
(345)
(5,268)
(5,862)
(3,263)
(179)
(2,075)
(345)
2021
Financial liabilities
Trade payables
Amounts due to customers
Other payables and loans
Lease liabilities
Carrying
amount
US$000
Contractual
cash flow
US$000
6 months
or less
US$000
Up to
1 year
US$000
1–5
years
US$000
5+
years
US$000
(686)
(686)
(686)
(2,968)
(2,968)
(2,968)
(2,269)
(2,507)
(292)
(338)
(947)
(13)
(6,215)
(6,499)
(4,614)
–
–
(893)
(72)
(965)
–
–
(667)
(253)
(920)
–
–
–
–
–
49
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
2022
US$000
2021
US$000
5
62
67
16
62
78
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, state laws and so on, all of which may affect their liquidity and ability to operate.
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 at least the
last six years show that of the current trade receivable balance, greater than 99% would be expected to be received.
In addition, the majority 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.
The Group has continued to take a conservative approach to the assessment of the Weighted Average Loss Rate and
maintained rates that are considered to reflect the 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 2022:
2022
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
2021
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
(%)
1.00%
2.00%
5.00%
7.00%
10.00%
100.00%
Gross
Carrying
Amount
US$000
374
9
16
(1)
2
62
462
Loss
Allowance
US$000
(4)
(0)
(1)
(0)
(0)
(62)
(67)
Net
Carrying
Amount
US$000
370
9
15
(1)
2
—
395
Credit
Impaired
No
No
No
No
No
Yes
Weighted
Average Loss
Rate (%)
1.00%
2.00%
5.00%
7.00%
10.00%
100.00%
Gross Carrying
Amount
US$000
479
406
10
20
8
62
985
Loss Allowance
US$000
(5)
(8)
(1)
(1)
(1)
(62)
(78)
Net Carrying
Amount
US$000
474
398
9
19
7
—
907
Credit Impaired
No
No
No
No
No
Yes
50
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
2022
US$000
2021
US$000
3,062
983
1,063
5,108
3,238
983
1,766
5,987
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
2022
US$000
2021
US$000
1,063
1,766
Of the above receivables, US$395,000 (2021: US$907,000) 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:
2022
Current assets
Current liabilities
Short-term exposure
USD
US$000
GBP
US$000
EUR
US$000
HKD
US$000
Total
US$000
5,197
(2,705)
2,492
236
(317)
(81)
85
(69)
16
568
6,086
(642)
(3,733)
(74)
2,353
51
Webis Holdings plc
Notes to the Financial Statements continued
21 Financial risk management continued
Foreign currency risks continued
2021
Current assets
Current liabilities
Short-term exposure
USD
US$000
GBP
US$000
EUR
US$000
HKD
US$000
Total
US$000
6,710
(4,778)
1,932
283
(339)
(56)
78
(85)
(7)
659
7,730
(700)
(5,902)
(41)
1,828
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 2022 would have increased / (decreased) equity
and profit and loss by the amounts shown below:
2022
Current assets
Current liabilities
Net assets
2021
Current assets
Current liabilities
Net assets
GBP
US$000
EUR
US$000
HKD
US$000
Total
US$000
12
(16)
(4)
4
(3)
1
28
(32)
(4)
44
(51)
(7)
GBP
US$000
EUR
US$000
HKD
US$000
Total
US$000
14
(17)
(3)
4
(4)
–
33
(35)
(2)
51
(56)
(5)
A 5% strengthening of the US Dollar against the above currencies would have had the equal but opposite effect on the above
currencies to the amounts shown above on the basis that all other variables remain constant.
22 Controlling party and ultimate controlling party
The Directors consider the ultimate controlling party to be Burnbrae Limited and its beneficial owner Jim Mellon by virtue of their
combined shareholding of 63.10%.
23 Subsequent events
To the knowledge of the Directors, there have been no other material events since the end of the reporting period that require
disclosure in the accounts.
52
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 30 January 2023 at 10 am for the purpose of
transacting the below business.
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 at the registered office or by email
to ir@webisholdingsplc.com prior to the meeting and as early
as possible.
Ordinary Business
1 To receive and adopt the report of the Directors and the
accounts for the year ended 31 May 2022.
2 To re-elect as a director Denham Eke who retires by
rotation and, being eligible, offers himself for re-election
in accordance with
the Company’s Articles of
Association.
3 To re-elect as a director Katie Errock who retires at the
date of the first general meeting following appointment
and, being eligible, offers herself for re-election in
accordance with the Company’s Articles of Association.
4 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
5 That the authority granted by special resolution to the
Directors of the Company to allot relevant securities up to
an amount equal to but not exceeding the authorised but
unissued share capital of the Company for the time being
which was passed at the Annual General Meeting of the
Company held on 9 December 2002 be renewed
pursuant to the power provided by Article 6(C) of the
Company’s Articles of Association, that such renewal of
authority be for the exercise of that power generally and
unconditionally and in all respects in the same terms as
originally granted, and that such authority shall expire at
the conclusion of the next Annual General Meeting of the
Company after the date of passing of this resolution
unless renewed, varied or revoked by the Company in
General Meeting.
As a Special Resolution
6 The Directors of the Company be and they are hereby
empowered pursuant to Article 8 of the Company’s
Articles of Association (the “Articles”) to allot equity
securities (as defined in Article 7(H) of the Articles)
pursuant to the authority conferred on the Directors to
allot relevant securities by Resolution 4 above as if
Article 7(A) of the Articles did not apply to such allotment
PROVIDED THAT this power shall be limited to:
(i) the allotment of equity securities in connection with a
rights issue in favour of ordinary shareholders where
the equity securities are issued proportionally (or as
nearly as may be) to the respective number of
ordinary shares held by such shareholders (but
subject to such exclusions or other arrangements as
the Directors may deem necessary or expedient to
deal with issues arising under the laws of any territory
or the requirements of any regulatory body or any
stock exchange in any territory or the fixing of
exchange rates applicable
to any such equity
securities where such equity securities are to be
issued to shareholders in more than one territory, or
legal or practical problems in respect of overseas
shareholders, fractional entitlements or otherwise
howsoever);
(ii) the allotment of equity securities to holders of any
options under any share option scheme of the
Company for the time being in force, on the exercise
by them of any such options; and
(iii) the allotment (otherwise than pursuant to paragraphs
(i) or (ii) above) of equity securities up to a maximum
aggregate nominal value equal to 50% of the issued
ordinary share capital of the Company for the time
being.
The power hereby conferred shall expire at
the
conclusion of the next Annual General Meeting of the
Company after the date of passing of this resolution
unless such power shall be renewed in accordance with
and subject to the provisions of the said Article 8 of the
Articles, 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
7 That in accordance with Article 12 of the Company’s
Articles of Association and with Section 13 of the
Companies Act 1992 the Company be generally and
unconditionally authorised to make market purchases (as
defined by Section 13(2) of the Companies Act 1992) of
ordinary shares of 1 pence each in its capital, provided
that:
(a) the maximum number of shares that may be acquired
is 39,333,831;
(b) the minimum price that may be paid for the shares is
1 pence;
(c) the maximum price that may be paid is, for a share
the Company contracts to purchase on any day, a
sum equal to 105% of the average of the upper and
lower quotations on the Daily Official List of the
London Stock Exchange for the ordinary shares of the
Company on the five business days immediately
preceding that day; and
(d) the authority conferred by this resolution shall expire
at the conclusion of the next Annual General Meeting
of the Company after the date of the passing of this
resolution unless renewed, varied or revoked by the
Company in General Meeting, but not so as to
prejudice the completion of a purchase contracted
before that date.
53
Webis Holdings plc
Notice of Meeting continued
As Ordinary Resolutions continued
8 That the Report of the Remuneration Committee be
received and adopted.
By order of the Board
Katie Errock
Company Secretary
28 November 2022
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.
than one proxy you may
To appoint more
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
in
to act as your proxy
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.
(which,
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 following postal address
of the Company’s registrars, PXS 1, Link Group, Unit 10,
Central Square, 29 Wellington Street, Leeds, LS1 4DL 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 10
a.m. on 26 January 2023 shall be entitled to attend and
vote at the meeting. Changes to the register after 10 a.m.
on 26 January 2023 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.
54
Webis Holdings plc
55
Webis Holdings plc
Nominated Adviser and Broker
Beaumont Cornish Limited
Building 3, Chiswick Park
566 Chiswick High Road
London
W4 5YA
Legal Advisors
Long & Co Limited
Eyreton
Quarterbridge Road
Douglas
Isle of Man
IM2 3RF
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
Independent Non-Executive Director
Richard Roberts
Independent Non-Executive Director
Katie Errock
Non-Executive Director
Company Secretary
Katie Errock
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
56
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
57